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Trade Liberalization, Deindustrialization, and Inequality: Evidence from Middle-Income Latin American Countries

Published online by Cambridge University Press:  05 September 2022

Juan Ariel Bogliaccini
Juan Ariel Bogliaccini*
Affiliation:
University of North Carolina at Chapel Hill
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Abstract

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This article explores the relationship among trade liberalization, deindustrialization, and income inequality in the more industrially advanced Latin American countries. It argues that, among the most important liberal reforms implemented during the 1980s and 1990s, trade reform was especially detrimental to equality because it accelerated deindustrialization. The analysis provides evidence to support this mechanism. Therefore, as the liberalization of trade increased, the deindustrialization process produced an increase in inequality. In short, evidence shows how the process of economic integration to the global market, as it took place, produced an increase in inequality through the destruction of formal employment.

Resumo

Resumo

Este artículo explora la relación entre la liberalización del comercio, la desindustrialización y la desigualdad en el grupo de países con mayor desarrollo industrial relativo en América Latina. El artículo argumenta que, entre las reformas liberalizadoras más importantes llevadas a cabo en la región entre las décadas de 1980 y 1990, la liberalización del comercio fue especialmente nociva para la equidad de ingresos mediante la aceleración del proceso de desindustrialización. El análisis provee evidencia sobre este mecanismo. Entonces, mientras la liberalización del comercio avanzaba, el proceso de desindustrialización produjo un incremento en la desigualdad de ingreso. La evidencia sugiere que el proceso de integración al mercado global, del modo en que se llevó adelante, produjo un incremento en la desigualdad a través de la destrucción del empleo formal.

Type
Research Article
Information
Latin American Research Review , Volume 48 , Issue 2 , 2013 , pp. 79 - 105
Copyright
Copyright © 2013 by the Latin American Studies Association

Footnotes

I am thankful to Evelyne Huber, John D. Stephens, Jonathan Hartlyn, James Stimson, Lars Schoultz, Fernando Filgueira, Merike Blofield, Sarah Brooks, Juan Pablo Luna, Sara Niedzwiecki, Santiago Anria, Jan Rovny, Jon Kropko, Diego Hernández, Federico Rodríguez, Santiago Cardozo, Russell Bither-Terry, the late Pablo Alegre, and three anonymous LARR reviewers for their extremely useful comments on previous versions of this article. I also thank Lars Schoultz, David Schwartz, and Alicia Nin for their extensive editorial suggestions and corrections.

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