April 11, 2012, 8:22 am
Can policy make a difference to inequality? In particular, can governments reduce inequality without killing the economy? As part of class prep, I’ve been looking at a story that has received very little discussion here, as far as I can tell, but is very interesting, to say the least: the remarkable decline in inequality that has taken place in Latin America.
But wait — aren’t Latin nations extremely unequal? Yes, they are — still. But not as much as before. The region moved left politically circa 2000, partially turning its back on the Washington Consensus — and there has been a dramatic reversal in inequality trends:
What about economic performance? The study linked above divides regimes into three kinds: Social Democratic (e.g. Brazil), Left-populist (e.g. Venezuela), and non-LOC (left of center):
Lots to parse here, and of course many questions about the relevance to richer nations. But remember how the right exalted Chile’s privatized pension system a while back? (It turned out that the Chileans themselves didn’t share the enthusiasm). Well, maybe there’s a different lesson from our southern neighbors.
