Income distribution, poverty and social expenditure in Latin America

Great social inequality has long been a frustrating feature of the economic development of Latin America, which has rightly been described as the region of the world with the highest levels of inequality of income distribution. Although the prevailing levels of poverty are lower than those typical of other parts of the developing world, they are still extremely high and, taking the region as a whole, are higher now than they were before the debt crisis. These are the conditions now confronting the new elements which have changed the economic and social dynamics of the region. Special mention may be made of four of these elements: the structural reforms embarked upon in all the countries, the accompanying process of globalization, the resumption of economic growth, and the new reforms initiated in the area of social expenditure and social services as part of what have been called the "second generation" reforms. This article puts forward some hypotheses about the effects of these new events on poverty and inequality and analyses their implications for social policy.