It is by now conventional wisdom to say that, while the countries of Latin America have improved their economic performance over the past few years, the majority of their populations have suffered a reversal in their standards of living compared to, let us say, 1980. After the protracted recession and acute macroeconomic disequilibria which was experienced by almost all the countries during the first half of the 1980s, many are staging a recovery in the 1990s. On the positive side, some of the indicators most frequently cited include the resumption of growth (albeit at moderate rates), greater financial stability, an increasingly diversified export sector, and political democratization. On the negative side, one finds inevitable mention of the following: inequitable distribution of income, a high incidence of absolute poverty, and the social tensions that tend to accompany them.

This paper considers the deep-seated roots of income inequality in the structure of Latin American economics. These include unequal distribution of land ownership, the “Kuznets effect” of rapid industrialization, regressive tax systems, and failure of governments to pursue aggressively income equalization policies. While examples are drawn from the experience of Brazil and Mexico, similar conclusions hold for other countries of the region.

Although the different phases of each country's development are far from being synchronous, in general Latin America's growth in the postwar period began to change pace and pattern around the mid- 1960s, then again following the oil crisis of 1973, which ushered in a slowdown of the world economy, only to plunge into crisis anew early in the 1980s.

As discussed in Altimir (1994a), during the 1950s and 1960s, growth — i.e., at substantial rates, greater than 2%per capita — was either unequal (as in Brazil or Chile in the 1960s) or else involved an increase in inequality in the 1950s that was followed by a phase of inequality that remained essentially unchanged throughout the 1960s (as in Argentina, Colombia or Mexico).

This article examines whether the free-market, open-economy model adopted by Chile's civilian, democratically elected administrations — of Patricio Aylwin (after March 1990) and Eduardo Frei (after March 1994) — has affected the country's distribution of income and degree of poverty and, if so, how. The free-market model was inherited from the military regime headed by General Pinochet (1973-1990) and adopted by his civilian successors almost without modification despite the fact that the post-1990 administrations were explicitly committed to making alleviation of poverty and reduction of inequalities in income a top priority. The article examines the extent to which the determinants of poverty and inequality have changed (if, indeed, they have changed at all) since the end of the military regime in 1990 — and if so, why.

This paper briefly discusses the economic reforms that have taken place in Jamaica for the past 15 years and argues that the reforms, at least so far, are mixed, particularly with regard to the elimination of poverty. The basic problems are (1) a slow response of exports to large, frequent adjustments in the exchange rate, which prohibits low-wage labor, in the informal sector, from being absorbed into the formal sector; and (2) the large budget deficit, with the associated demands for large cuts in expenditures, which primarily affects the rural poor. It is suggested that the principal reason that reforms have been slow is because of the political price to be paid for unpopular measures in a competitive democracy

The article discusses the quality of available statistics on income and land distribution in Haiti. It is demonstrated that some of the most widely quoted figures do not stand up to methodological scrutiny. Hence, no serious discussion of redistribution, let alone practical measures, can be based on these figures.

This paper raises the question whether the current wave of macro-economic and structural reforms in latin America should be viewed as a decisive change in the continent's long-term development strategy or as part of but another stop-and-go cycle, for which the continent has been known in the past. While no unambiguous answer is provided, the paper outlines what is still needed in the way of persistent micro-economic policy change if obstacles of political economy, including an abundance of natural resources and relatively easy access to foreign capital, are to be overcome.

Two facts stand out from even the most cursory inspection of income distribution data in Latin America. First, income is highly concentrated, making the region one of the most unequal in the world. Second, despite the fact that the region has now reached an intermediate position among the world's nations in terms of per capita income (some US$2,000 per year on average), a level which, by historical standards, would presuppose a more equitable distribution of income, this has not happened. In fact, the distribution of income in Latin America has become, if anything, more highly skewed than ever. The question then is: why is this so? The explanation forms the heart of this paper. Precisely because neither of these statements would hold if the countries to which they apply were either “average” or “well-behaved,” the explanation thatfollows assumesa “neostructuralist perspective” (Lustig, 1991) — i.e., one that ascribes causality to a number of regional charactristics related to its history and the interaction among its factor, cultural, and institutional endowments.

The production of inequality has been one of the most enduring features of Latin American economic and social systems, and one in which the institutional structure has perhaps exhibited the greatest consistency over time. In a very real sense, inequality is what the Mexican Revolution was all about, as was the Bolivian Revolution of the early 1950s. So, too, with the rise, in the middle decades of this century, of assorted populist political parties and movements. By the 1960s, participatory development had become almost a Zeitgeist, and distributional concerns had ostensibly come to suffuse many of the development programs launched during that first United Nations Development Decade, including the Alliance for Progress. It is relevant to recall that, quite early in the postwar flowering of development studies, Viner (1952) had suggested that the chief aim (and test) of development should be the reduction of mass poverty.

According to the present paper, absolute poverty and relative inequality have persisted in Latin America as a result of mutually reinforcing, and unfair, patterns of distribution of final private, broad, and total consumption and income. Furthermore, it is argued that the prevailing pattern, characterized by a vicious circle of distributive injustice in both consumption and income (production), can be broken only by mesoeconomic, sectoral constitutions and, thus, by public policies that uphold the principles of justice, freedom, and equality — on both the consumption and income (production) sides.