Experts Analyse Policies for Overcoming Inequality in Latin America and the Caribbean

(17 December 2012) Why is Latin America and the Caribbean still the world's most unequal region, despite the fact that most of its countries are experiencing steady economic growth? The persistent inequality in the region and the apparent lack of specific policies aimed at reducing the income distribution gap are some of the issues tackled in the latest issue of the CEPAL Review, which is available online from today.

This issue (Nº 108) of the main academic publication of the Economic Commission for Latin America and the Caribbean (ECLAC) includes 10 articles on various economic and social topics in the region, written by renowned experts from various countries.

In the first article, entitled "Overcoming the ‘empty box syndrome'. Determinants of income distribution in Latin America", experts from the ECLAC Economic Development Division, Ivonne González and Ricardo Martner research the factors defining income distribution in Latin America.

The concept of the "empty box syndrome", which was coined by ECLAC economist Fernando Fajnzylber in 1990, suggests that Latin American countries did not simultaneously achieve growth and equity objectives during the 1980s (or 1990s).

Since then, income distribution has not improved significantly in the region, with the Gini coefficient (used internationally to measure levels of inequality in the population) going from an average of 0.55 in 1990 to 0.50 in 2010. According to the authors, empirical evidence demonstrates that this result is due to increases and improvements in public social spending, education, public investment and tax composition.

As well as reviving the role of the State and fiscal policy in achieving inclusive development, the experts conclude that the role of the private sector in this process is equally important (owing to its ability to boost investment and create jobs). 

In the article "Free trade agreements in Latin America since 1990: an evaluation of export diversification", Alfonso Dingemans and César Ross, researchers from the Institute of Advanced Studies (IDEA) of the University of Santiago, Chile, review whether free trade agreements (FTAs) signed by Latin American countries have enabled them to diversify their exports and increase the number of trading partners. The authors conclude that the agreements have tended to be fairly ineffective when it comes to promoting export diversification.

The experts emphasize that a free trade agreement alone will not change the production structure of an economy, and that it is therefore vital to research how to promote exports with greater added value and how to achieve more uniform distribution in terms of export structure and participation of trading partners.

In the article "Ecuador: defining and measuring multidimensional poverty, 2006-2010", expert Andrés Mideros, from the Maastricht Graduate School of Governance, presents new possibilities for understanding, measuring and analysing multidimensional poverty in Ecuador.

The author found that multidimensional poverty decreased between 2006 and 2010; however, the level of inequality remained unchanged, with higher levels of poverty for rural inhabitants, persistent inequalities among indigenous and Afro-Ecuadorian populations and higher poverty among women than among men (particularly in terms of education and work).

Other articles in CEPAL Review N° 108 tackle the biodiesel market and public policies in Argentina and Brazil, an analysis of the production structure of the services sector in countries with varying levels of development, the lessons of Keynesian ideas for economic policy in Brazil, enterprise creation and economic recovery in Rio Grande do Sul (Brazil) and lessons on the conflict between equivalence and solidarity in the Chilean health insurance market.

Any queries should be sent to the ECLAC Public Information and Web Services Section.

E-mail: prensa@cepal.org; Telephone: (56 2) 2210 2040.

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