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The Impact of Inequality in Latin America

  • Patricia Justino

    ()

    (Poverty Research Unit at Sussex, Department of Economics, University of Sussex)

  • Julie Litchfield

    ()

    (Poverty Research Unit at Sussex, Department of Economics, Universtity of Sussex)

  • Laurence Whitehead

    ()

    (Centre for Mexican Studies and Nuffield College, University of Oxford)

This paper examines the impact of inequality on poor people in Latin America. It is argued that development policies in Latin America and other developing regions should focus not only on eliminating poverty and deprivation but also on preventing and reducing inequality. By inequality we refer not only to differences in income or consumption between population groups but also to divergences in the access to social and political rights (education, health care, voting, and so on). Although conceptually related, poverty and inequality are two distinct phenomena and it is possible that falls in poverty may be accompanied by increases in inequality and vice-versa. In fact, many Latin America countries have experienced the former in recent years. In the long-term, however, persistent inequalities as those observed in the Latin America region will undermine efforts to reduce poverty and destitution due to the emergence of poverty traps caused by the impossibility of economic and social mobility of certain population groups. This will have important consequences for the challenge of achieving the Millennium Development Goal of halving poverty worldwide by 2015. In addition, persistently high inequalities will also impact negatively on crucial economic, social and political variables and will thus seriously undermine the success of any development strategies.

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File URL: http://www.sussex.ac.uk/Units/PRU/wps/wp21.pdf
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Paper provided by Department of Economics, University of Sussex in its series Working Paper Series with number 21.

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Length: 86 pages
Date of creation: Apr 2003
Date of revision:
Handle: RePEc:pru:wpaper:21
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  1. Patricia Justino & Arnab Acharya, 2003. "Inequality in Latin America: Processes and Inputs," PRUS Working Papers 22, Poverty Research Unit at Sussex, University of Sussex.
  2. Datt, Gaurav & Ravallion, Martin, 1992. "Growth and redistribution components of changes in poverty measures : A decomposition with applications to Brazil and India in the 1980s," Journal of Development Economics, Elsevier, vol. 38(2), pages 275-295, April.
  3. Harrison, Elizabeth & Seidl, Christian, 1994. " Perceptional Inequality and Preferential Judgements: An Empirical Examination of Distributional Axioms," Public Choice, Springer, vol. 79(1-2), pages 61-81, April.
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  15. S. M. Ravi Kanbur, 1987. "Measurement and Alleviation of Poverty: With an Application to the Effects of Macroeconomic Adjustment (Evaluation quantitative de la pauvreté et remèdes possibles: analyse des effets d'un ajustemen," IMF Staff Papers, Palgrave Macmillan, vol. 34(1), pages 60-85, March.
  16. Galor, Oded & Zeira, Joseph, 1988. "Income Distribution and Macroeconomics," MPRA Paper 51644, University Library of Munich, Germany, revised 01 Sep 1989.
  17. Kevin M. Murphy & Andrei Shleifer & Robert Vishny, 1988. "Income Distribution, Market Size, and Industrialization," NBER Working Papers 2709, National Bureau of Economic Research, Inc.
  18. Glewwe, Paul & Hall, Gillette, 1998. "Are some groups more vulnerable to macroeconomic shocks than others? Hypothesis tests based on panel data from Peru," Journal of Development Economics, Elsevier, vol. 56(1), pages 181-206, June.
  19. Lucia Hanmer & Niek De Jong & Rachel Kurian & Jos Mooij, 1999. "Are the DAC targets achievable? Poverty and human development in the year 2015," Journal of International Development, John Wiley & Sons, Ltd., vol. 11(4), pages 547-563.
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