Nora Lustig is Samuel Z. Stone Professor of Latin American Economics and Director of the Commitment to Equity Institute (CEQ) at Tulane University. Professor Lustig's research focuses on economic development, poverty and inequality, and social policies in developing countries. She has published more than seventy articles and fifteen edited volumes and books. Her current research is centered on assessing the impact of taxation and social spending on inequality and poverty in low and middle income countries, and on the determinants of income distribution in Latin America. Prof. Lustig in a founding member and past president of the Latin American and Caribbean Economic Association (LACEA) and was a co-director of the World Bank's World Development Report 2000/1, Attacking Poverty. She is the editor of the Journal of Economic Inequality Forum and a member of the Inter-American Dialogue, the Center of Global Development's Advisory Board, ECINEQ's Executive Council, PEP's Board of Directors, and the World Economic Forum's Economic Growth and Social Inclusion Stewardship Board. She is also a Nonresident Fellow at the Center for Global Development and the Inter-American Dialogue. Prof. Lustig has served on the Atkinson Commission on Poverty and on the Stiglitz et all. Commission on Measuring Economic Performance and Social Progress. She received her doctorate in Economics from the University of California, Berkeley. Phone: 504-862-8347 Address: Tulane University Department of Economics 6823 St. Charles Avenue 204 Tilton Hall New Orleans, Louisiana 70118 USA
Oxford Research Encyclopedia of Economics and Finance, 2020
Taxation and public spending are key policy levers the state has in its power to change the distr... more Taxation and public spending are key policy levers the state has in its power to change the distribution of income determined both by market forces and institutions and the prevailing distribution of wealth and property. One of the most commonly used methods to measure the distributional impact of a country’s taxes and public spending is fiscal incidence analysis. Rooted in the field of public finance, fiscal incidence analysis is designed to measure who bears the burden of taxes and who receives the benefits of government spending, and who are the gainers and losers of particular tax reforms or changes to welfare programs.
Fiscal incidence analysis can be used to assess the redistributive impact of a fiscal system as a whole or changes of specific fiscal instruments. In particular, fiscal incidence analysis is used to address the following questions: Who bears the burden of taxation and who receives the benefits of public spending? How much income redistribution is being accomplished through taxation and public spending? What is the impact of taxation and public spending on poverty and the poor? How equalizing are specific taxes and government welfare programs? How progressive are spending on education and health? How effective are taxes and government spending in reducing inequality and poverty? Who are the losers and winners of tax and welfare programs reforms? A sample of key indicators meant to address these questions are discussed here. Real time analysis of winners and losers plays an important role in shaping the policy debate in a number of countries.
In practice, fiscal incidence analysis is the method utilized to allocate taxes and public spending to households so that one can compare incomes before taxes and transfers with incomes after them. Standard fiscal incidence analysis just looks at what is paid and what is received without assessing the behavioral responses that taxes and public spending may trigger on individuals or households. This is often referred to as the “accounting approach.” Although the theory is quite straightforward, its application can be fraught with complications. The salient ones are discussed here. While ignoring behavioral responses and general equilibrium effects is a limitation of the accounting approach, the effects calculated with this method are considered a reasonable approximation of the short-run welfare impact. Fiscal incidence analysis, however, can be designed to include behavioral responses as well as general equilibrium and intertemporal effects. This article focuses on the implementation of fiscal incidence analysis using the accounting approach.
Chapter in John Cockburn and Marin Valdivia, eds., Reaching the MDGs: An International Perspectiv... more Chapter in John Cockburn and Marin Valdivia, eds., Reaching the MDGs: An International Perspective- Processing from a Researcher- Stakeholder Forum
The Poverty and Economic Policy (PEP) Network promotes the monitoring and measurement of poverty in its multiple dimensions. The causes and consequences of poverty are also analyzed in order to provide an empirical basis for policymakers to design and implement appropriate policies to combat poverty. For a more thorough analysis, the PEP Network supports research on the impact of past policies and those considered for the future. PEP researchers expand the frontiers of knowledge by developing new concepts and innovative methodologies to analyze poverty. In pursuing this vision, the PEP Network provides a sophisticated program of scientific and financial support that systematically removes obstacles to state of the art research in developing countries. First of all, PEP addresses the lack of funding for research in developing countries, which leads the best and brightest local researchers all too often to move to developed countries. However, solving the funding issue is not always enough to convince local experts to pursue their research activities in their country, and it is in this regard that the PEP Network innovates in the support it provides. Indeed, a comprehensive scientific support strategy ensures that local researchers have access to advanced training and ongoing advice from and interaction with peers in both the South and North to remedy the lack of research infrastructure in their countries. The PEP Network also makes available the documentation and software necessary for the best possible analysis.
Chapter in Crecimiento económico y equidad
ste libro forma parte de una colección de 16 volúmen... more Chapter in Crecimiento económico y equidad
ste libro forma parte de una colección de 16 volúmenes en los cuales se analizan los grandes problemas de México al comenzar el siglo xxi y se sugieren algunas ideas acerca de las tendencias de su desarrollo en el futuro cercano. La realización de este proyecto ha sido posible gracias a la colaboración de un grupo de investi- gadores, quienes con su experiencia académica enriquecen el co- nocimiento en torno a la situación actual de nuestro país. Los te- mas que se abordan son: población, desarrollo urbano y regional, migraciones internacionales, medio ambiente, desigualdad social, movimientos sociales, educación, relaciones de género, econo- mía, relaciones internacionales, políticas públicas, instituciones y procesos políticos, seguridad nacional y seguridad interior, y cul- turas e identidades. El Colegio de México continúa así su tradi- ción de publicar obras colectivas y multidisciplinarias para com- prender mejor la sociedad mexicana y los problemas que enfrenta hoy día. Ésta es nuestra manera de participar, desde el ámbito académico, en la conmemoración del bicentenario de la Indepen- dencia y el centenario de la Revolución. Agradecemos a la Secre- taría de Educación Pública el apoyo para la realización de este proyecto.
Chapter in 6 in Declining Inequality in Latin America: A Decade of Progress?
Latin America is ... more Chapter in 6 in Declining Inequality in Latin America: A Decade of Progress?
Latin America is often singled out for its high and persistent income inequality. Toward the end of the 1990s, however, income concentration began to fall across the region. Of the seventeen countries for which comparable data are available, twelve have experienced a decline, particularly since 2000. This book is among the first efforts to understand what happened in these countries and why.
Led by editors Felipe López-Calva and Nora Lustig, a panel of distinguished economists undertakes in-depth analyses of Argentina, Brazil, Mexico, and Peru. In addition, they provide essential background in the form of overviews of the relationship between markets and inequality, the political economy of redistribution, and the evolution of income inequality in the advanced industrialized economies. Two factors account for much of the decline in inequality: a decrease in the wage gap between skilled and low-skilled labor, and an increase in government transfers targeted to the poor.
Thanks to the timeliness and sophistication of these essays, Declining Inequality in Latin America is likely to become a standard reference in its field.
Chapter in Declining Inequality in Latin America: A Decade of Progress?
Latin America is often s... more Chapter in Declining Inequality in Latin America: A Decade of Progress?
Latin America is often singled out for its high and persistent income inequality. Toward the end of the 1990s, however, income concentration began to fall across the region. Of the seventeen countries for which comparable data are available, twelve have experienced a decline, particularly since 2000. This book is among the first efforts to understand what happened in these countries and why.
Led by editors Felipe López-Calva and Nora Lustig, a panel of distinguished economists undertakes in-depth analyses of Argentina, Brazil, Mexico, and Peru. In addition, they provide essential background in the form of overviews of the relationship between markets and inequality, the political economy of redistribution, and the evolution of income inequality in the advanced industrialized economies. Two factors account for much of the decline in inequality: a decrease in the wage gap between skilled and low-skilled labor, and an increase in government transfers targeted to the poor.
Thanks to the timeliness and sophistication of these essays, Declining Inequality in Latin America is likely to become a standard reference in its field.
Chapter in Perspectivas sobre el Desarrollo: Hacia un mejor Estado en América Latina.
Este núm... more Chapter in Perspectivas sobre el Desarrollo: Hacia un mejor Estado en América Latina.
Este número de Perspectivas sobre el desarrollo contribuye con el debate de la participación del Estado en los procesos de desarrollo de los países, a partir de cuatro documentos que se complementan entre sí. En el pasado reciente, América Latina ha experimentado un importante incremento en el tamaño de sus Estados tanto en términos de gasto como en materia de impuestos. Frente a esta tendencia, la discusión en torno a las finanzas públicas en la región y su papel como promotor del desarrollo, se hace oportuna y crucial.
Chapter 28 in Oxford Handbook of Latin American Economics
Latin America has been central to the... more Chapter 28 in Oxford Handbook of Latin American Economics
Latin America has been central to the main debates on development economics, ranging from the relationships between income inequality and economic growth, and the importance of geography versus institutions in development, to debates on the effects of trade, trade openness, and protection on growth and income distribution. Despite increasing interest in the region, there are few English language books on Latin American economics. This Handbook, organized into five parts, aims to fill this gap. Part I looks at long-term issues, including the institutional roots of Latin America's underdevelopment; the political economy of policy making; the rise, decline, and re-emergence of alternative paradigms; and the environmental sustainability of the development pattern. Part II considers macroeconomic topics, including the management of capital account booms and busts, the evolution and performance of exchange rate regimes, the advances and challenges of monetary policies and financial development, and the major fiscal policy issues confronting the region, including a comparison of Latin American fiscal accounts with those of the OECD. Part III analyses the region's economies in global context, particularly the role of Latin America in the world trade system, and the effects of dependence on natural resources (characteristic of many countries of the region) on growth and human development. It reviews the trends of foreign direct investment, and the opportunities and challenges raised by the emergence of China as buyer of the region's commodities and competitor in the world market
Chapter in Perspectivas sobre el Desarrollo: Hacia un mejor estado en América Latina
El objetivo... more Chapter in Perspectivas sobre el Desarrollo: Hacia un mejor estado en América Latina
El objetivo de esta publicación es divulgar el resultado de trabajos de investigación realizados por investigadores CAF e investigadores auspiciados por el Programa de Apoyo a la Investigación o por otros programas de la Institución. Perspectivas busca acercar al sector académico al debate sobre las políticas públicas en la región, por lo que cuenta con la colaboración de actores de los sectores público, privado y académico de sus países, quienes participan en la discusión de los trabajos sobre los problemas de América Latina.
Chapter in Rutledge Handbook of Latin American Politics
Latin America has been one of the criti... more Chapter in Rutledge Handbook of Latin American Politics
Latin America has been one of the critical areas in the study of comparative politics. The region’s experiments with installing and deepening democracy and promoting alternative modes of economic development have generated intriguing and enduring empirical puzzles. In turn, Latin America’s challenges continue to spawn original and vital work on central questions in comparative politics: about the origins of democracy; about the relationship between state and society; about the nature of citizenship; about the balance between state and market.
Chapter in América Latina en los Albores del Siglo XXI: 1 Aspectos Económicos
Este volumen repa... more Chapter in América Latina en los Albores del Siglo XXI: 1 Aspectos Económicos
Este volumen repasa las estrategias de desarrollo económico seguidas en la región durante las últimas seis décadas, para después concentrarse en el análisis de temas como las ventajas y desventajas de las estrategias de industrialización por medio de la sustitución de importaciones y de reformas promercado; los distintos tipos de estrategias de integración regional; la lucha por abatir la desigualdad y la pobreza de ingreso; o el crecimiento económico y su relación con el deterioro ambiental, entre otros. Una obra excepcional en cuanto al análisis de la compleja y contradictoria realidad latinoamericana
Chapter 1, Poverty Reduction in a Changing Climate
Poverty reduction challenges in the twenty-f... more Chapter 1, Poverty Reduction in a Changing Climate
Poverty reduction challenges in the twenty-first century are not the same as those from the previous century. The shift is due in no small part to climate change and climate-related weather disasters, such as extreme flood and drought. The magnitude and frequency of such events are only expected to increase in the coming decades, affecting more and more impoverished people across the globe.
Chapter in Inequality on the Rise, A Current History Anthology
Inequality is stirring controver... more Chapter in Inequality on the Rise, A Current History Anthology
Inequality is stirring controversy in developing and advanced economies. Perceptions of unfair disparities in incomes and opportunities can undermine the legitimacy of both authoritarian and democratic governments. Yet the problem is more complex than many on the right or left care to admit. Once it reaches certain levels, income inequality impedes economic growth; at other times it seems an unavoidable trade-off in the pursuit of growth. Finding the proper balance is more than a question of economic theory; it’s a moral and political dilemma.
The eight essays collected in this e-book appeared in Current History from 2012 to 2013 in a monthly series on inequality around the world. Together they form a useful guide to the topic that benefits from Current History’s region-by-region approach. Contributors include Uri Dadush and Kemal Derviş, who provide a global overview; Martin King Whyte on China; Daniel Treisman on Russia; Ahmed Galal on the Middle East; Nora Lustig on Latin America; Jason Beckfield on Europe; Roberto Zagha on India; and Luc Christiaensen and Shantayanan Devarajan on Africa. As their essays show, each of the world’s regions has struggled with the economics and politics of income distribution. Yet, as Dadush and Derviş note, “There is no secret to the recipes that governments can use to mitigate inequality.” The key ingredient may be political will.
Chapter 10 in Inequality in Asia and the Pacific. Trends, Drivers and Policy Implications.
Asia... more Chapter 10 in Inequality in Asia and the Pacific. Trends, Drivers and Policy Implications.
Asia’s rapid economic growth has led to a significant reduction in extreme poverty, but accompanied by rising inequality. This book deals with three questions: What have been the trends of inequality in Asia and the Pacific? What are the key drivers of rising inequality in the region? How should Asian countries respond to the rising inequality?
Chapter 17 in Falling Inequality in Latin America: Policy Changes and Lessons
WIDER Studies in D... more Chapter 17 in Falling Inequality in Latin America: Policy Changes and Lessons WIDER Studies in Development Economics
Analyzes a new and positive economic trend Provides a rigorous explanation of this trend on the basis of two methodological approaches Looks at macroeconomics, foreign trade, taxation, labour market, human capital formation, and social assistance Shows how the 'open economy policy model' can decrease inequality Places the economic and econometric analysis within the context of the political changes that have taken place in the region since the early 1990s and in particular since 1998
Chapter in América Latina en una era de globalización. Ensayos en honor de Enrique V. Iglesias
... more Chapter in América Latina en una era de globalización. Ensayos en honor de Enrique V. Iglesias
Una descripción de la información y las lecciones extraídas de la interacción entre las ideas y la práctica en las cuestiones relacionadas con el desarrollo, tras largos años de trabajo del autor en roles de liderazgo de alto nivel tanto para su gobierno como para organizaciones internacionales. Esto incluye, el gobierno de Uruguay (praxis nacional), la Comisión Económica de las Naciones Unidas para América Latina y el Caribe (ideas a nivel regional e internacional), el Banco Interamericano de Desarrollo (praxis regional e internacional) y la Cumbre Iberoamericana (ideas y praxis interregional e internacional).
Chapter in Latin American Development in an Age of Globalization: Essays in Honor of Enrique V. I... more Chapter in Latin American Development in an Age of Globalization: Essays in Honor of Enrique V. Iglesias
A description of the insights and lessons learned from the interplay among ideas and praxis on development issues following the author’s long years working in high level leadership roles for his national government and international organizations. This includes in the government of Uruguay (national level praxis), the UN Economic Commission for Latin America and the Caribbean (regional and international ideas), the Inter-American Development Bank (regional and international praxis) and the Ibero-American Summit process (interregional and international ideas and praxis).
Chapter in Building Bridges: Scholars, Policymakers and International Affairs
Scholars, Policym... more Chapter in Building Bridges: Scholars, Policymakers and International Affairs
Scholars, Policymakers, and International Affairs shows how to build mutually beneficial connections between the worlds of ideas and action, analysis and policy. Drawing on contributions from top international scholars with policy experience in the United States, Europe, Asia, Canada, and Latin America, as well as senior policymakers throughout the Americas, Abraham F. Lowenthal and Mariano E. Bertucci make the case that scholars can both strengthen their research and contribute to improved policies while protecting academia from the risks of active participation in the policy process.
Many scholars believe that policymakers are more interested in processes and outcomes than in understanding causality. Many policymakers believe that scholars are absorbed in abstract and self-referential debates and that they are primarily interested in crafting theories (and impressing other scholars) rather than developing solutions to pressing policy issues.
The contributors to this book confront this gap head-on. They do not deny the obstacles to fruitful interaction between scholars and policymakers, but, drawing on their own experience, discuss how these obstacles can be and have been overcome. They present case studies that illustrate how scholars have helped reduce income inequality, promote democratic governance, improve gender equity, target international financial sanctions, manage the Mexico–U.S. border, and enhance inter-American cooperation. These success stories are balanced by studies on why academic analysts have failed to achieve much positive impact on counternarcotics and citizen security policies. The editors’ astute conclusion identifies best practices and provides concrete recommendations to government agencies, international institutions, nongovernmental organizations, and funding sources, as well as to senior university officials, academic departments and centers, think tanks, established scholars, junior faculty, and graduate students.
Clearly written and thoughtfully organized, this innovative book provides analytic insights and practical wisdom for those who want to understand how to build more effective connections between the worlds of thought and action.
Chapter- Latin America's Emerging Middle Class
Politicians, business leaders and citizens look w... more Chapter- Latin America's Emerging Middle Class
Politicians, business leaders and citizens look with hope to the Latin American middle class for political stability and purchasing power, but the economic position of the middle class remains vulnerable. The contributors document the remarkable emergence of this middle group in Latin America, whose measurement turns out not to be an easy task.
Chapter 7 - In it Together: Why Less Inequality Benefits.
The gap between rich and poor keeps ... more Chapter 7 - In it Together: Why Less Inequality Benefits.
The gap between rich and poor keeps widening. Growth, if any, has disproportionally benefited higher income groups while lower income households have been left behind. This long-run increase in income inequality not only raises social and political concerns, but also economic ones. It tends to drag down GDP growth, due to the rising distance of the lower 40% from the rest of society. Lower income people have been prevented from realising their human capital potential, which is bad for the economy as a whole. This book highlights the key areas where inequalities are created and where new policies are required, including: the consequences of current consolidation policies; structural labour market changes with rising non-standard work and job polarization; persisting gender gaps; the challenge of high wealth concentration, and the role for redistribution policies
Chapter 16 - Inequality and Fiscal Policy
Here, I examine the level, redistributive impact and p... more Chapter 16 - Inequality and Fiscal Policy Here, I examine the level, redistributive impact and pro-poorness of government spending on education and health for thirteen developing countries from the Commitment to Equity project. Social spending as a share of total income is high by historical standards, and it rises with income per capita and income inequality. Spending on education and health lowers inequality and its marginal contribution to the overall decline in inequality is, on average, 69 percent. There appears to be no “Robin Hood Paradox:” redistribution increases with income inequality, even if one controls for per capita income. Concentration coefficients indicate that spending on pre-school, primary and secondary education is pro-poor in twelve countries. Spending on tertiary education is regressive and unequalizing in three countries, and progressive and equalizing (but not pro-poor) in ten. Health spending is pro-poor in five countries. Of the remaining eight, health spending per capita is roughly equal across the income distribution in three, and progressive and equalizing (but not pro-poor) in five.
Oxford Research Encyclopedia of Economics and Finance, 2020
Taxation and public spending are key policy levers the state has in its power to change the distr... more Taxation and public spending are key policy levers the state has in its power to change the distribution of income determined both by market forces and institutions and the prevailing distribution of wealth and property. One of the most commonly used methods to measure the distributional impact of a country’s taxes and public spending is fiscal incidence analysis. Rooted in the field of public finance, fiscal incidence analysis is designed to measure who bears the burden of taxes and who receives the benefits of government spending, and who are the gainers and losers of particular tax reforms or changes to welfare programs.
Fiscal incidence analysis can be used to assess the redistributive impact of a fiscal system as a whole or changes of specific fiscal instruments. In particular, fiscal incidence analysis is used to address the following questions: Who bears the burden of taxation and who receives the benefits of public spending? How much income redistribution is being accomplished through taxation and public spending? What is the impact of taxation and public spending on poverty and the poor? How equalizing are specific taxes and government welfare programs? How progressive are spending on education and health? How effective are taxes and government spending in reducing inequality and poverty? Who are the losers and winners of tax and welfare programs reforms? A sample of key indicators meant to address these questions are discussed here. Real time analysis of winners and losers plays an important role in shaping the policy debate in a number of countries.
In practice, fiscal incidence analysis is the method utilized to allocate taxes and public spending to households so that one can compare incomes before taxes and transfers with incomes after them. Standard fiscal incidence analysis just looks at what is paid and what is received without assessing the behavioral responses that taxes and public spending may trigger on individuals or households. This is often referred to as the “accounting approach.” Although the theory is quite straightforward, its application can be fraught with complications. The salient ones are discussed here. While ignoring behavioral responses and general equilibrium effects is a limitation of the accounting approach, the effects calculated with this method are considered a reasonable approximation of the short-run welfare impact. Fiscal incidence analysis, however, can be designed to include behavioral responses as well as general equilibrium and intertemporal effects. This article focuses on the implementation of fiscal incidence analysis using the accounting approach.
Chapter in John Cockburn and Marin Valdivia, eds., Reaching the MDGs: An International Perspectiv... more Chapter in John Cockburn and Marin Valdivia, eds., Reaching the MDGs: An International Perspective- Processing from a Researcher- Stakeholder Forum
The Poverty and Economic Policy (PEP) Network promotes the monitoring and measurement of poverty in its multiple dimensions. The causes and consequences of poverty are also analyzed in order to provide an empirical basis for policymakers to design and implement appropriate policies to combat poverty. For a more thorough analysis, the PEP Network supports research on the impact of past policies and those considered for the future. PEP researchers expand the frontiers of knowledge by developing new concepts and innovative methodologies to analyze poverty. In pursuing this vision, the PEP Network provides a sophisticated program of scientific and financial support that systematically removes obstacles to state of the art research in developing countries. First of all, PEP addresses the lack of funding for research in developing countries, which leads the best and brightest local researchers all too often to move to developed countries. However, solving the funding issue is not always enough to convince local experts to pursue their research activities in their country, and it is in this regard that the PEP Network innovates in the support it provides. Indeed, a comprehensive scientific support strategy ensures that local researchers have access to advanced training and ongoing advice from and interaction with peers in both the South and North to remedy the lack of research infrastructure in their countries. The PEP Network also makes available the documentation and software necessary for the best possible analysis.
Chapter in Crecimiento económico y equidad
ste libro forma parte de una colección de 16 volúmen... more Chapter in Crecimiento económico y equidad
ste libro forma parte de una colección de 16 volúmenes en los cuales se analizan los grandes problemas de México al comenzar el siglo xxi y se sugieren algunas ideas acerca de las tendencias de su desarrollo en el futuro cercano. La realización de este proyecto ha sido posible gracias a la colaboración de un grupo de investi- gadores, quienes con su experiencia académica enriquecen el co- nocimiento en torno a la situación actual de nuestro país. Los te- mas que se abordan son: población, desarrollo urbano y regional, migraciones internacionales, medio ambiente, desigualdad social, movimientos sociales, educación, relaciones de género, econo- mía, relaciones internacionales, políticas públicas, instituciones y procesos políticos, seguridad nacional y seguridad interior, y cul- turas e identidades. El Colegio de México continúa así su tradi- ción de publicar obras colectivas y multidisciplinarias para com- prender mejor la sociedad mexicana y los problemas que enfrenta hoy día. Ésta es nuestra manera de participar, desde el ámbito académico, en la conmemoración del bicentenario de la Indepen- dencia y el centenario de la Revolución. Agradecemos a la Secre- taría de Educación Pública el apoyo para la realización de este proyecto.
Chapter in 6 in Declining Inequality in Latin America: A Decade of Progress?
Latin America is ... more Chapter in 6 in Declining Inequality in Latin America: A Decade of Progress?
Latin America is often singled out for its high and persistent income inequality. Toward the end of the 1990s, however, income concentration began to fall across the region. Of the seventeen countries for which comparable data are available, twelve have experienced a decline, particularly since 2000. This book is among the first efforts to understand what happened in these countries and why.
Led by editors Felipe López-Calva and Nora Lustig, a panel of distinguished economists undertakes in-depth analyses of Argentina, Brazil, Mexico, and Peru. In addition, they provide essential background in the form of overviews of the relationship between markets and inequality, the political economy of redistribution, and the evolution of income inequality in the advanced industrialized economies. Two factors account for much of the decline in inequality: a decrease in the wage gap between skilled and low-skilled labor, and an increase in government transfers targeted to the poor.
Thanks to the timeliness and sophistication of these essays, Declining Inequality in Latin America is likely to become a standard reference in its field.
Chapter in Declining Inequality in Latin America: A Decade of Progress?
Latin America is often s... more Chapter in Declining Inequality in Latin America: A Decade of Progress?
Latin America is often singled out for its high and persistent income inequality. Toward the end of the 1990s, however, income concentration began to fall across the region. Of the seventeen countries for which comparable data are available, twelve have experienced a decline, particularly since 2000. This book is among the first efforts to understand what happened in these countries and why.
Led by editors Felipe López-Calva and Nora Lustig, a panel of distinguished economists undertakes in-depth analyses of Argentina, Brazil, Mexico, and Peru. In addition, they provide essential background in the form of overviews of the relationship between markets and inequality, the political economy of redistribution, and the evolution of income inequality in the advanced industrialized economies. Two factors account for much of the decline in inequality: a decrease in the wage gap between skilled and low-skilled labor, and an increase in government transfers targeted to the poor.
Thanks to the timeliness and sophistication of these essays, Declining Inequality in Latin America is likely to become a standard reference in its field.
Chapter in Perspectivas sobre el Desarrollo: Hacia un mejor Estado en América Latina.
Este núm... more Chapter in Perspectivas sobre el Desarrollo: Hacia un mejor Estado en América Latina.
Este número de Perspectivas sobre el desarrollo contribuye con el debate de la participación del Estado en los procesos de desarrollo de los países, a partir de cuatro documentos que se complementan entre sí. En el pasado reciente, América Latina ha experimentado un importante incremento en el tamaño de sus Estados tanto en términos de gasto como en materia de impuestos. Frente a esta tendencia, la discusión en torno a las finanzas públicas en la región y su papel como promotor del desarrollo, se hace oportuna y crucial.
Chapter 28 in Oxford Handbook of Latin American Economics
Latin America has been central to the... more Chapter 28 in Oxford Handbook of Latin American Economics
Latin America has been central to the main debates on development economics, ranging from the relationships between income inequality and economic growth, and the importance of geography versus institutions in development, to debates on the effects of trade, trade openness, and protection on growth and income distribution. Despite increasing interest in the region, there are few English language books on Latin American economics. This Handbook, organized into five parts, aims to fill this gap. Part I looks at long-term issues, including the institutional roots of Latin America's underdevelopment; the political economy of policy making; the rise, decline, and re-emergence of alternative paradigms; and the environmental sustainability of the development pattern. Part II considers macroeconomic topics, including the management of capital account booms and busts, the evolution and performance of exchange rate regimes, the advances and challenges of monetary policies and financial development, and the major fiscal policy issues confronting the region, including a comparison of Latin American fiscal accounts with those of the OECD. Part III analyses the region's economies in global context, particularly the role of Latin America in the world trade system, and the effects of dependence on natural resources (characteristic of many countries of the region) on growth and human development. It reviews the trends of foreign direct investment, and the opportunities and challenges raised by the emergence of China as buyer of the region's commodities and competitor in the world market
Chapter in Perspectivas sobre el Desarrollo: Hacia un mejor estado en América Latina
El objetivo... more Chapter in Perspectivas sobre el Desarrollo: Hacia un mejor estado en América Latina
El objetivo de esta publicación es divulgar el resultado de trabajos de investigación realizados por investigadores CAF e investigadores auspiciados por el Programa de Apoyo a la Investigación o por otros programas de la Institución. Perspectivas busca acercar al sector académico al debate sobre las políticas públicas en la región, por lo que cuenta con la colaboración de actores de los sectores público, privado y académico de sus países, quienes participan en la discusión de los trabajos sobre los problemas de América Latina.
Chapter in Rutledge Handbook of Latin American Politics
Latin America has been one of the criti... more Chapter in Rutledge Handbook of Latin American Politics
Latin America has been one of the critical areas in the study of comparative politics. The region’s experiments with installing and deepening democracy and promoting alternative modes of economic development have generated intriguing and enduring empirical puzzles. In turn, Latin America’s challenges continue to spawn original and vital work on central questions in comparative politics: about the origins of democracy; about the relationship between state and society; about the nature of citizenship; about the balance between state and market.
Chapter in América Latina en los Albores del Siglo XXI: 1 Aspectos Económicos
Este volumen repa... more Chapter in América Latina en los Albores del Siglo XXI: 1 Aspectos Económicos
Este volumen repasa las estrategias de desarrollo económico seguidas en la región durante las últimas seis décadas, para después concentrarse en el análisis de temas como las ventajas y desventajas de las estrategias de industrialización por medio de la sustitución de importaciones y de reformas promercado; los distintos tipos de estrategias de integración regional; la lucha por abatir la desigualdad y la pobreza de ingreso; o el crecimiento económico y su relación con el deterioro ambiental, entre otros. Una obra excepcional en cuanto al análisis de la compleja y contradictoria realidad latinoamericana
Chapter 1, Poverty Reduction in a Changing Climate
Poverty reduction challenges in the twenty-f... more Chapter 1, Poverty Reduction in a Changing Climate
Poverty reduction challenges in the twenty-first century are not the same as those from the previous century. The shift is due in no small part to climate change and climate-related weather disasters, such as extreme flood and drought. The magnitude and frequency of such events are only expected to increase in the coming decades, affecting more and more impoverished people across the globe.
Chapter in Inequality on the Rise, A Current History Anthology
Inequality is stirring controver... more Chapter in Inequality on the Rise, A Current History Anthology
Inequality is stirring controversy in developing and advanced economies. Perceptions of unfair disparities in incomes and opportunities can undermine the legitimacy of both authoritarian and democratic governments. Yet the problem is more complex than many on the right or left care to admit. Once it reaches certain levels, income inequality impedes economic growth; at other times it seems an unavoidable trade-off in the pursuit of growth. Finding the proper balance is more than a question of economic theory; it’s a moral and political dilemma.
The eight essays collected in this e-book appeared in Current History from 2012 to 2013 in a monthly series on inequality around the world. Together they form a useful guide to the topic that benefits from Current History’s region-by-region approach. Contributors include Uri Dadush and Kemal Derviş, who provide a global overview; Martin King Whyte on China; Daniel Treisman on Russia; Ahmed Galal on the Middle East; Nora Lustig on Latin America; Jason Beckfield on Europe; Roberto Zagha on India; and Luc Christiaensen and Shantayanan Devarajan on Africa. As their essays show, each of the world’s regions has struggled with the economics and politics of income distribution. Yet, as Dadush and Derviş note, “There is no secret to the recipes that governments can use to mitigate inequality.” The key ingredient may be political will.
Chapter 10 in Inequality in Asia and the Pacific. Trends, Drivers and Policy Implications.
Asia... more Chapter 10 in Inequality in Asia and the Pacific. Trends, Drivers and Policy Implications.
Asia’s rapid economic growth has led to a significant reduction in extreme poverty, but accompanied by rising inequality. This book deals with three questions: What have been the trends of inequality in Asia and the Pacific? What are the key drivers of rising inequality in the region? How should Asian countries respond to the rising inequality?
Chapter 17 in Falling Inequality in Latin America: Policy Changes and Lessons
WIDER Studies in D... more Chapter 17 in Falling Inequality in Latin America: Policy Changes and Lessons WIDER Studies in Development Economics
Analyzes a new and positive economic trend Provides a rigorous explanation of this trend on the basis of two methodological approaches Looks at macroeconomics, foreign trade, taxation, labour market, human capital formation, and social assistance Shows how the 'open economy policy model' can decrease inequality Places the economic and econometric analysis within the context of the political changes that have taken place in the region since the early 1990s and in particular since 1998
Chapter in América Latina en una era de globalización. Ensayos en honor de Enrique V. Iglesias
... more Chapter in América Latina en una era de globalización. Ensayos en honor de Enrique V. Iglesias
Una descripción de la información y las lecciones extraídas de la interacción entre las ideas y la práctica en las cuestiones relacionadas con el desarrollo, tras largos años de trabajo del autor en roles de liderazgo de alto nivel tanto para su gobierno como para organizaciones internacionales. Esto incluye, el gobierno de Uruguay (praxis nacional), la Comisión Económica de las Naciones Unidas para América Latina y el Caribe (ideas a nivel regional e internacional), el Banco Interamericano de Desarrollo (praxis regional e internacional) y la Cumbre Iberoamericana (ideas y praxis interregional e internacional).
Chapter in Latin American Development in an Age of Globalization: Essays in Honor of Enrique V. I... more Chapter in Latin American Development in an Age of Globalization: Essays in Honor of Enrique V. Iglesias
A description of the insights and lessons learned from the interplay among ideas and praxis on development issues following the author’s long years working in high level leadership roles for his national government and international organizations. This includes in the government of Uruguay (national level praxis), the UN Economic Commission for Latin America and the Caribbean (regional and international ideas), the Inter-American Development Bank (regional and international praxis) and the Ibero-American Summit process (interregional and international ideas and praxis).
Chapter in Building Bridges: Scholars, Policymakers and International Affairs
Scholars, Policym... more Chapter in Building Bridges: Scholars, Policymakers and International Affairs
Scholars, Policymakers, and International Affairs shows how to build mutually beneficial connections between the worlds of ideas and action, analysis and policy. Drawing on contributions from top international scholars with policy experience in the United States, Europe, Asia, Canada, and Latin America, as well as senior policymakers throughout the Americas, Abraham F. Lowenthal and Mariano E. Bertucci make the case that scholars can both strengthen their research and contribute to improved policies while protecting academia from the risks of active participation in the policy process.
Many scholars believe that policymakers are more interested in processes and outcomes than in understanding causality. Many policymakers believe that scholars are absorbed in abstract and self-referential debates and that they are primarily interested in crafting theories (and impressing other scholars) rather than developing solutions to pressing policy issues.
The contributors to this book confront this gap head-on. They do not deny the obstacles to fruitful interaction between scholars and policymakers, but, drawing on their own experience, discuss how these obstacles can be and have been overcome. They present case studies that illustrate how scholars have helped reduce income inequality, promote democratic governance, improve gender equity, target international financial sanctions, manage the Mexico–U.S. border, and enhance inter-American cooperation. These success stories are balanced by studies on why academic analysts have failed to achieve much positive impact on counternarcotics and citizen security policies. The editors’ astute conclusion identifies best practices and provides concrete recommendations to government agencies, international institutions, nongovernmental organizations, and funding sources, as well as to senior university officials, academic departments and centers, think tanks, established scholars, junior faculty, and graduate students.
Clearly written and thoughtfully organized, this innovative book provides analytic insights and practical wisdom for those who want to understand how to build more effective connections between the worlds of thought and action.
Chapter- Latin America's Emerging Middle Class
Politicians, business leaders and citizens look w... more Chapter- Latin America's Emerging Middle Class
Politicians, business leaders and citizens look with hope to the Latin American middle class for political stability and purchasing power, but the economic position of the middle class remains vulnerable. The contributors document the remarkable emergence of this middle group in Latin America, whose measurement turns out not to be an easy task.
Chapter 7 - In it Together: Why Less Inequality Benefits.
The gap between rich and poor keeps ... more Chapter 7 - In it Together: Why Less Inequality Benefits.
The gap between rich and poor keeps widening. Growth, if any, has disproportionally benefited higher income groups while lower income households have been left behind. This long-run increase in income inequality not only raises social and political concerns, but also economic ones. It tends to drag down GDP growth, due to the rising distance of the lower 40% from the rest of society. Lower income people have been prevented from realising their human capital potential, which is bad for the economy as a whole. This book highlights the key areas where inequalities are created and where new policies are required, including: the consequences of current consolidation policies; structural labour market changes with rising non-standard work and job polarization; persisting gender gaps; the challenge of high wealth concentration, and the role for redistribution policies
Chapter 16 - Inequality and Fiscal Policy
Here, I examine the level, redistributive impact and p... more Chapter 16 - Inequality and Fiscal Policy Here, I examine the level, redistributive impact and pro-poorness of government spending on education and health for thirteen developing countries from the Commitment to Equity project. Social spending as a share of total income is high by historical standards, and it rises with income per capita and income inequality. Spending on education and health lowers inequality and its marginal contribution to the overall decline in inequality is, on average, 69 percent. There appears to be no “Robin Hood Paradox:” redistribution increases with income inequality, even if one controls for per capita income. Concentration coefficients indicate that spending on pre-school, primary and secondary education is pro-poor in twelve countries. Spending on tertiary education is regressive and unequalizing in three countries, and progressive and equalizing (but not pro-poor) in ten. Health spending is pro-poor in five countries. Of the remaining eight, health spending per capita is roughly equal across the income distribution in three, and progressive and equalizing (but not pro-poor) in five.
Achieving the new Sustainable Development Goals will depend in part on the ability of Governments... more Achieving the new Sustainable Development Goals will depend in part on the ability of Governments to improve their tax collection and enforcement systems. However, demand for investments into infrastructure and public services must be balanced against the competing need to protect low-income households that may otherwise be made worse off from misaligned tax and transfer policies.
Chapter in 6 in Declining Inequality in Latin America: A Decade of Progress? Latin America is oft... more Chapter in 6 in Declining Inequality in Latin America: A Decade of Progress? Latin America is often singled out for its high and persistent income inequality. Toward the end of the 1990s, however, income concentration began to fall across the region. Of the seventeen countries for which comparable data are available, twelve have experienced a decline, particularly since 2000. This book is among the first efforts to understand what happened in these countries and why. Led by editors Felipe López-Calva and Nora Lustig, a panel of distinguished economists undertakes in-depth analyses of Argentina, Brazil, Mexico, and Peru. In addition, they provide essential background in the form of overviews of the relationship between markets and inequality, the political economy of redistribution, and the evolution of income inequality in the advanced industrialized economies. Two factors account for much of the decline in inequality: a decrease in the wage gap between skilled and low-skilled labor, and an increase in government transfers targeted to the poor. Thanks to the timeliness and sophistication of these essays, Declining Inequality in Latin America is likely to become a standard reference in its field.
Rising food prices cause considerable policy dilemmas for developing country governments. Letting... more Rising food prices cause considerable policy dilemmas for developing country governments. Letting domestic prices adjust to reflect the full change in international prices generates inflationary pressures and causes severe hardship for poor households lacking access to social safety nets. Alternatively, governments can use food subsidies or export restrictions to stabilize domestic prices, yet this exacerbates global food price increases and undermines a rules-based trading system. The recent episode shows that many countries chose to shift the burden of adjustment back to international markets. The use of corn and oilseed for the production of biofuel will result in a recurrence of such episodes in the foreseeable future. The Center for Global Development is an independent, nonprofit policy research organization that is dedicated to reducing global poverty and inequality and to making globalization work for the poor. Use and dissemination of this Working Paper is encouraged; howeve...
A reduction in the wage premium for skilled labor –and a consistent reduction of overall wage ine... more A reduction in the wage premium for skilled labor –and a consistent reduction of overall wage inequality-has played an important role in explaining the fall of income inequality in Latin America during the 2000-2014 period. Consistent with that pattern, wage inequality declined in Mexico since 2000. This paper investigates the possible channels on why the wages of high-skilled workers have declined. Using data from Mexican labor surveys for the period between 2000 and 2014, we investigate if the decline was driven by wages declining more sharply for younger or older workers. We find that wages of older workers declined and the decline was more pronounced the older the cohort. This would seem to support the hypothesis that older workers’ skills became obsoleteUna reducción en la prima salarial del trabajo calificado -y una reducción constante de la desigualdad salarial global- ha jugado un papel importante en la explicación de la caída de la desigualdad del ingreso en América Latina ...
This report focuses on the dimensions of poverty, and how to create a better world, free of pover... more This report focuses on the dimensions of poverty, and how to create a better world, free of poverty. The analysis explores the nature, and evolution of poverty, and its causes, to present a framework for action. The opportunity for expanding poor people's assets is addressed, arguing that major reductions in human deprivation are indeed possible, that economic growth, inequality, and poverty reduction, can be harnessed through economic integration, and technological change, dependent not only on the evolvement of markets, but on the choices for public action at the global, national, and local levels. Actions to facilitate empowerment include state institutional responsiveness in building social institutions which will improve well-being, and health, to allow increased income-earning potential, access to education, and eventual removal of social barriers. Security aspects are enhanced, by assessing risk management towards reducing vulnerability to economic crises, and natural disasters. The report expands on the dimensions of human deprivation, to include powerlessness and voicelessness, vulnerability and fear. International dimensions are explored, through global actions to fight poverty, analyzing global trade, capital flows, and how to reform development assistance to forge change in the livelihoods of the poor.
We perform the first comprehensive fiscal incidence analyses in Brazil and the US, including dire... more We perform the first comprehensive fiscal incidence analyses in Brazil and the US, including direct cash and food transfers, targeted housing and heating subsidies, public spending on education and health, and personal income, payroll, corporate income, property, and expenditure taxes. In both countries, primary spending is close to 40 percent of GDP. The US achieves higher redistribution through direct taxes and transfers, primarily due to underutilization of the personal income tax in Brazil and the fact that Brazil’s highly progressive cash and food transfer programs are small while larger transfer programs are less progressive. However, when health and non-tertiary education spending are added to income using the government cost approach, the two countries achieve similar levels of redistribution. This result may be a reflection of better-off households in Brazil opting out of public services due to quality concerns rather than a result of government effort to make spending more equitable.
Chapter 10 in Inequality in Asia and the Pacific. Trends, Drivers and Policy Implications. Asia’s... more Chapter 10 in Inequality in Asia and the Pacific. Trends, Drivers and Policy Implications. Asia’s rapid economic growth has led to a significant reduction in extreme poverty, but accompanied by rising inequality. This book deals with three questions: What have been the trends of inequality in Asia and the Pacific? What are the key drivers of rising inequality in the region? How should Asian countries respond to the rising inequality?
This paper analyzes the effects of indirect and direct taxes, as well as monetary and in-kind tra... more This paper analyzes the effects of indirect and direct taxes, as well as monetary and in-kind transfers on the income distribution in nine Latin American countries applying the CEQ methodology and using household and expenditure microdata around 2010. In particular, we focus on the effect of fiscal policies on two groups of the emerging middle class: the vulnerable and the middle class. We find that while the vulnerable tend to be net receivers in fiscal terms, especially when including in-kind transfers, the middle class seems to be mainly a net payer. This might be aggravated by the perception of a relatively low quality of in-kind transfers, notably in education and health-care services. We provide some evidence based on subjective surveys pointing in this direction.
Only a few years ago, a proponent of a free trade agreement (FTA) between Mexico and the United S... more Only a few years ago, a proponent of a free trade agreement (FTA) between Mexico and the United States would have faced harsh criticism in Mexico, and indifference in the U.S.1 In Mexico, for decades the idea of explicitly promoting increased commercial ties with the United States, and taking part in a bargaining process with the "imperial power" to the North, was blatantly rejected in most political and academic circles. The U.S. administrations, acknowledging Mexico's feelings of distrust, probably did not consider an FTA between the two countries to be possible. Nor did the United States consider one to be desirable. Multilateralism was the prevalent trade strategy in the United States during the post-World War II period. Bilateral initiatives tended to be viewed as a diversion of institutional energies, and as counterproductive to the overall strategy.
Oxford Research Encyclopedia of Economics and Finance, 2020
Taxation and public spending are key policy levers the state has in its power to change the distr... more Taxation and public spending are key policy levers the state has in its power to change the distribution of income determined both by market forces and institutions and the prevailing distribution of wealth and property. One of the most commonly used methods to measure the distributional impact of a country’s taxes and public spending is fiscal incidence analysis. Rooted in the field of public finance, fiscal incidence analysis is designed to measure who bears the burden of taxes and who receives the benefits of government spending, and who are the gainers and losers of particular tax reforms or changes to welfare programs. Fiscal incidence analysis can be used to assess the redistributive impact of a fiscal system as a whole or changes of specific fiscal instruments. In particular, fiscal incidence analysis is used to address the following questions: Who bears the burden of taxation and who receives the benefits of public spending? How much income redistribution is being accomplish...
The results of in-depth analyses for Argentina, Brazil, and Mexico reveal two main factors that e... more The results of in-depth analyses for Argentina, Brazil, and Mexico reveal two main factors that explain this phenomenon: a fall in the premium that favors skilled over unskilled labor, and more progressive government transfers targeting the poor.
Chapter 7 - In it Together: Why Less Inequality Benefits. The gap between rich and poor keeps wid... more Chapter 7 - In it Together: Why Less Inequality Benefits. The gap between rich and poor keeps widening. Growth, if any, has disproportionally benefited higher income groups while lower income households have been left behind. This long-run increase in income inequality not only raises social and political concerns, but also economic ones. It tends to drag down GDP growth, due to the rising distance of the lower 40% from the rest of society. Lower income people have been prevented from realising their human capital potential, which is bad for the economy as a whole. This book highlights the key areas where inequalities are created and where new policies are required, including: the consequences of current consolidation policies; structural labour market changes with rising non-standard work and job polarization; persisting gender gaps; the challenge of high wealth concentration, and the role for redistribution policies
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Fiscal incidence analysis can be used to assess the redistributive impact of a fiscal system as a whole or changes of specific fiscal instruments. In particular, fiscal incidence analysis is used to address the following questions: Who bears the burden of taxation and who receives the benefits of public spending? How much income redistribution is being accomplished through taxation and public spending? What is the impact of taxation and public spending on poverty and the poor? How equalizing are specific taxes and government welfare programs? How progressive are spending on education and health? How effective are taxes and government spending in reducing inequality and poverty? Who are the losers and winners of tax and welfare programs reforms? A sample of key indicators meant to address these questions are discussed here. Real time analysis of winners and losers plays an important role in shaping the policy debate in a number of countries.
In practice, fiscal incidence analysis is the method utilized to allocate taxes and public spending to households so that one can compare incomes before taxes and transfers with incomes after them. Standard fiscal incidence analysis just looks at what is paid and what is received without assessing the behavioral responses that taxes and public spending may trigger on individuals or households. This is often referred to as the “accounting approach.” Although the theory is quite straightforward, its application can be fraught with complications. The salient ones are discussed here. While ignoring behavioral responses and general equilibrium effects is a limitation of the accounting approach, the effects calculated with this method are considered a reasonable approximation of the short-run welfare impact. Fiscal incidence analysis, however, can be designed to include behavioral responses as well as general equilibrium and intertemporal effects. This article focuses on the implementation of fiscal incidence analysis using the accounting approach.
The Poverty and Economic Policy (PEP) Network promotes the monitoring and measurement of poverty in its multiple dimensions. The causes and consequences of poverty are also analyzed in order to provide an empirical basis for policymakers to design and implement appropriate policies to combat poverty. For a more thorough analysis, the PEP Network supports research on the impact of past policies and those considered for the future. PEP researchers expand the frontiers of knowledge by developing new concepts and innovative methodologies to analyze poverty.
In pursuing this vision, the PEP Network provides a sophisticated program of scientific and financial support that systematically removes obstacles to state of the art research in developing countries. First of all, PEP addresses the lack of funding for research in developing countries, which leads the best and brightest local researchers all too often to move to developed countries. However, solving the funding issue is not always enough to convince local experts to pursue their research activities in their country, and it is in this regard that the PEP Network innovates in the support it provides. Indeed, a comprehensive scientific support strategy ensures that local researchers have access to advanced training and ongoing advice from and interaction with peers in both the South and North to remedy the lack of research infrastructure in their countries. The PEP Network also makes available the documentation and software necessary for the best possible analysis.
ste libro forma parte de una colección de 16 volúmenes en los cuales se analizan los grandes problemas de México al comenzar el siglo xxi y se sugieren algunas ideas acerca de las tendencias de su desarrollo en el futuro cercano. La realización de este proyecto ha sido posible gracias a la colaboración de un grupo de investi- gadores, quienes con su experiencia académica enriquecen el co- nocimiento en torno a la situación actual de nuestro país. Los te- mas que se abordan son: población, desarrollo urbano y regional, migraciones internacionales, medio ambiente, desigualdad social, movimientos sociales, educación, relaciones de género, econo- mía, relaciones internacionales, políticas públicas, instituciones y procesos políticos, seguridad nacional y seguridad interior, y cul- turas e identidades. El Colegio de México continúa así su tradi- ción de publicar obras colectivas y multidisciplinarias para com- prender mejor la sociedad mexicana y los problemas que enfrenta hoy día. Ésta es nuestra manera de participar, desde el ámbito académico, en la conmemoración del bicentenario de la Indepen- dencia y el centenario de la Revolución. Agradecemos a la Secre- taría de Educación Pública el apoyo para la realización de este proyecto.
Latin America is often singled out for its high and persistent income inequality. Toward the end of the 1990s, however, income concentration began to fall across the region. Of the seventeen countries for which comparable data are available, twelve have experienced a decline, particularly since 2000. This book is among the first efforts to understand what happened in these countries and why.
Led by editors Felipe López-Calva and Nora Lustig, a panel of distinguished economists undertakes in-depth analyses of Argentina, Brazil, Mexico, and Peru. In addition, they provide essential background in the form of overviews of the relationship between markets and inequality, the political economy of redistribution, and the evolution of income inequality in the advanced industrialized economies. Two factors account for much of the decline in inequality: a decrease in the wage gap between skilled and low-skilled labor, and an increase in government transfers targeted to the poor.
Thanks to the timeliness and sophistication of these essays, Declining Inequality in Latin America is likely to become a standard reference in its field.
Latin America is often singled out for its high and persistent income inequality. Toward the end of the 1990s, however, income concentration began to fall across the region. Of the seventeen countries for which comparable data are available, twelve have experienced a decline, particularly since 2000. This book is among the first efforts to understand what happened in these countries and why.
Led by editors Felipe López-Calva and Nora Lustig, a panel of distinguished economists undertakes in-depth analyses of Argentina, Brazil, Mexico, and Peru. In addition, they provide essential background in the form of overviews of the relationship between markets and inequality, the political economy of redistribution, and the evolution of income inequality in the advanced industrialized economies. Two factors account for much of the decline in inequality: a decrease in the wage gap between skilled and low-skilled labor, and an increase in government transfers targeted to the poor.
Thanks to the timeliness and sophistication of these essays, Declining Inequality in Latin America is likely to become a standard reference in its field.
Este número de Perspectivas sobre el desarrollo contribuye con el debate de la participación del Estado en los procesos de desarrollo de los países, a partir de cuatro documentos que se complementan entre sí. En el pasado reciente, América Latina ha experimentado un importante incremento en el tamaño de sus Estados tanto en términos de gasto como en materia de impuestos. Frente a esta tendencia, la discusión en torno a las finanzas públicas en la región y su papel como promotor del desarrollo, se hace oportuna y crucial.
Latin America has been central to the main debates on development economics, ranging from the relationships between income inequality and economic growth, and the importance of geography versus institutions in development, to debates on the effects of trade, trade openness, and protection on growth and income distribution. Despite increasing interest in the region, there are few English language books on Latin American economics. This Handbook, organized into five parts, aims to fill this gap. Part I looks at long-term issues, including the institutional roots of Latin America's underdevelopment; the political economy of policy making; the rise, decline, and re-emergence of alternative paradigms; and the environmental sustainability of the development pattern. Part II considers macroeconomic topics, including the management of capital account booms and busts, the evolution and performance of exchange rate regimes, the advances and challenges of monetary policies and financial development, and the major fiscal policy issues confronting the region, including a comparison of Latin American fiscal accounts with those of the OECD. Part III analyses the region's economies in global context, particularly the role of Latin America in the world trade system, and the effects of dependence on natural resources (characteristic of many countries of the region) on growth and human development. It reviews the trends of foreign direct investment, and the opportunities and challenges raised by the emergence of China as buyer of the region's commodities and competitor in the world market
El objetivo de esta publicación es divulgar el resultado de trabajos de investigación realizados por investigadores CAF e investigadores auspiciados por el Programa de Apoyo a la Investigación o por otros programas de la Institución. Perspectivas busca acercar al sector académico al debate sobre las políticas públicas en la región, por lo que cuenta con la colaboración de actores de los sectores público, privado y académico de sus países, quienes participan en la discusión de los trabajos sobre los problemas de América Latina.
Latin America has been one of the critical areas in the study of comparative politics. The region’s experiments with installing and deepening democracy and promoting alternative modes of economic development have generated intriguing and enduring empirical puzzles. In turn, Latin America’s challenges continue to spawn original and vital work on central questions in comparative politics: about the origins of democracy; about the relationship between state and society; about the nature of citizenship; about the balance between state and market.
Este volumen repasa las estrategias de desarrollo económico seguidas en la región durante las últimas seis décadas, para después concentrarse en el análisis de temas como las ventajas y desventajas de las estrategias de industrialización por medio de la sustitución de importaciones y de reformas promercado; los distintos tipos de estrategias de integración
regional; la lucha por abatir la desigualdad y la pobreza de ingreso; o el crecimiento económico y su relación con el deterioro ambiental, entre otros. Una obra excepcional en cuanto al análisis de la compleja y contradictoria realidad latinoamericana
Poverty reduction challenges in the twenty-first century are not the same as those from the previous century. The shift is due in no small part to climate change and climate-related weather disasters, such as extreme flood and drought. The magnitude and frequency of such events are only expected to increase in the coming decades, affecting more and more impoverished people across the globe.
Inequality is stirring controversy in developing and advanced economies. Perceptions of unfair disparities in incomes and opportunities can undermine the legitimacy of both authoritarian and democratic governments. Yet the problem is more complex than many on the right or left care to admit. Once it reaches certain levels, income inequality impedes economic growth; at other times it seems an unavoidable trade-off in the pursuit of growth. Finding the proper balance is more than a question of economic theory; it’s a moral and political dilemma.
The eight essays collected in this e-book appeared in Current History from 2012 to 2013 in a monthly series on inequality around the world. Together they form a useful guide to the topic that benefits from Current History’s region-by-region approach. Contributors include Uri Dadush and Kemal Derviş, who provide a global overview; Martin King Whyte on China; Daniel Treisman on Russia; Ahmed Galal on the Middle East; Nora Lustig on Latin America; Jason Beckfield on Europe; Roberto Zagha on India; and Luc Christiaensen and Shantayanan Devarajan on Africa. As their essays show, each of the world’s regions has struggled with the economics and politics of income distribution. Yet, as Dadush and Derviş note, “There is no secret to the recipes that governments can use to mitigate inequality.” The key ingredient may be political will.
Asia’s rapid economic growth has led to a significant reduction in extreme poverty, but accompanied by rising inequality. This book deals with three questions: What have been the trends of inequality in Asia and the Pacific? What are the key drivers of rising inequality in the region? How should Asian countries respond to the rising inequality?
WIDER Studies in Development Economics
Analyzes a new and positive economic trend
Provides a rigorous explanation of this trend on the basis of two methodological approaches
Looks at macroeconomics, foreign trade, taxation, labour market, human capital formation, and social assistance
Shows how the 'open economy policy model' can decrease inequality
Places the economic and econometric analysis within the context of the political changes that have taken place in the region since the early 1990s and in particular since 1998
Una descripción de la información y las lecciones extraídas de la interacción entre las ideas y la práctica en las cuestiones relacionadas con el desarrollo, tras largos años de trabajo del autor en roles de liderazgo de alto nivel tanto para su gobierno como para organizaciones internacionales. Esto incluye, el gobierno de Uruguay (praxis nacional), la Comisión Económica de las Naciones Unidas para América Latina y el Caribe (ideas a nivel regional e internacional), el Banco Interamericano de Desarrollo (praxis regional e internacional) y la Cumbre Iberoamericana (ideas y praxis interregional e internacional).
A description of the insights and lessons learned from the interplay among ideas and praxis on development issues following the author’s long years working in high level leadership roles for his national government and international organizations. This includes in the government of Uruguay (national level praxis), the UN Economic Commission for Latin America and the Caribbean (regional and international ideas), the Inter-American Development Bank (regional and international praxis) and the Ibero-American Summit process (interregional and international ideas and praxis).
Scholars, Policymakers, and International Affairs shows how to build mutually beneficial connections between the worlds of ideas and action, analysis and policy. Drawing on contributions from top international scholars with policy experience in the United States, Europe, Asia, Canada, and Latin America, as well as senior policymakers throughout the Americas, Abraham F. Lowenthal and Mariano E. Bertucci make the case that scholars can both strengthen their research and contribute to improved policies while protecting academia from the risks of active participation in the policy process.
Many scholars believe that policymakers are more interested in processes and outcomes than in understanding causality. Many policymakers believe that scholars are absorbed in abstract and self-referential debates and that they are primarily interested in crafting theories (and impressing other scholars) rather than developing solutions to pressing policy issues.
The contributors to this book confront this gap head-on. They do not deny the obstacles to fruitful interaction between scholars and policymakers, but, drawing on their own experience, discuss how these obstacles can be and have been overcome. They present case studies that illustrate how scholars have helped reduce income inequality, promote democratic governance, improve gender equity, target international financial sanctions, manage the Mexico–U.S. border, and enhance inter-American cooperation. These success stories are balanced by studies on why academic analysts have failed to achieve much positive impact on counternarcotics and citizen security policies. The editors’ astute conclusion identifies best practices and provides concrete recommendations to government agencies, international institutions, nongovernmental organizations, and funding sources, as well as to senior university officials, academic departments and centers, think tanks, established scholars, junior faculty, and graduate students.
Clearly written and thoughtfully organized, this innovative book provides analytic insights and practical wisdom for those who want to understand how to build more effective connections between the worlds of thought and action.
Politicians, business leaders and citizens look with hope to the Latin American middle class for political stability and purchasing power, but the economic position of the middle class remains vulnerable. The contributors document the remarkable emergence of this middle group in Latin America, whose measurement turns out not to be an easy task.
The gap between rich and poor keeps widening. Growth, if any, has disproportionally benefited higher income groups while lower income households have been left behind. This long-run increase in income inequality not only raises social and political concerns, but also economic ones. It tends to drag down GDP growth, due to the rising distance of the lower 40% from the rest of society. Lower income people have been prevented from realising their human capital potential, which is bad for the economy as a whole. This book highlights the key areas where inequalities are created and where new policies are required, including: the consequences of current consolidation policies; structural labour market changes with rising non-standard work and job polarization; persisting gender gaps; the challenge of high wealth concentration, and the role for redistribution policies
Here, I examine the level, redistributive impact and pro-poorness of government spending on education and health for thirteen developing countries from the Commitment to Equity project. Social spending as a share of total income is high by historical standards, and it rises with income per capita and income inequality. Spending on education and health lowers inequality and its marginal contribution to the overall decline in inequality is, on average, 69 percent. There appears to be no “Robin Hood Paradox:” redistribution increases with income inequality, even if one controls for per capita income. Concentration coefficients indicate that spending on pre-school, primary and secondary education is pro-poor in twelve countries. Spending on tertiary education is regressive and unequalizing in three countries, and progressive and equalizing (but not pro-poor) in ten. Health spending is pro-poor in five countries. Of the remaining eight, health spending per capita is roughly equal across the income distribution in three, and progressive and equalizing (but not pro-poor) in five.
Fiscal incidence analysis can be used to assess the redistributive impact of a fiscal system as a whole or changes of specific fiscal instruments. In particular, fiscal incidence analysis is used to address the following questions: Who bears the burden of taxation and who receives the benefits of public spending? How much income redistribution is being accomplished through taxation and public spending? What is the impact of taxation and public spending on poverty and the poor? How equalizing are specific taxes and government welfare programs? How progressive are spending on education and health? How effective are taxes and government spending in reducing inequality and poverty? Who are the losers and winners of tax and welfare programs reforms? A sample of key indicators meant to address these questions are discussed here. Real time analysis of winners and losers plays an important role in shaping the policy debate in a number of countries.
In practice, fiscal incidence analysis is the method utilized to allocate taxes and public spending to households so that one can compare incomes before taxes and transfers with incomes after them. Standard fiscal incidence analysis just looks at what is paid and what is received without assessing the behavioral responses that taxes and public spending may trigger on individuals or households. This is often referred to as the “accounting approach.” Although the theory is quite straightforward, its application can be fraught with complications. The salient ones are discussed here. While ignoring behavioral responses and general equilibrium effects is a limitation of the accounting approach, the effects calculated with this method are considered a reasonable approximation of the short-run welfare impact. Fiscal incidence analysis, however, can be designed to include behavioral responses as well as general equilibrium and intertemporal effects. This article focuses on the implementation of fiscal incidence analysis using the accounting approach.
The Poverty and Economic Policy (PEP) Network promotes the monitoring and measurement of poverty in its multiple dimensions. The causes and consequences of poverty are also analyzed in order to provide an empirical basis for policymakers to design and implement appropriate policies to combat poverty. For a more thorough analysis, the PEP Network supports research on the impact of past policies and those considered for the future. PEP researchers expand the frontiers of knowledge by developing new concepts and innovative methodologies to analyze poverty.
In pursuing this vision, the PEP Network provides a sophisticated program of scientific and financial support that systematically removes obstacles to state of the art research in developing countries. First of all, PEP addresses the lack of funding for research in developing countries, which leads the best and brightest local researchers all too often to move to developed countries. However, solving the funding issue is not always enough to convince local experts to pursue their research activities in their country, and it is in this regard that the PEP Network innovates in the support it provides. Indeed, a comprehensive scientific support strategy ensures that local researchers have access to advanced training and ongoing advice from and interaction with peers in both the South and North to remedy the lack of research infrastructure in their countries. The PEP Network also makes available the documentation and software necessary for the best possible analysis.
ste libro forma parte de una colección de 16 volúmenes en los cuales se analizan los grandes problemas de México al comenzar el siglo xxi y se sugieren algunas ideas acerca de las tendencias de su desarrollo en el futuro cercano. La realización de este proyecto ha sido posible gracias a la colaboración de un grupo de investi- gadores, quienes con su experiencia académica enriquecen el co- nocimiento en torno a la situación actual de nuestro país. Los te- mas que se abordan son: población, desarrollo urbano y regional, migraciones internacionales, medio ambiente, desigualdad social, movimientos sociales, educación, relaciones de género, econo- mía, relaciones internacionales, políticas públicas, instituciones y procesos políticos, seguridad nacional y seguridad interior, y cul- turas e identidades. El Colegio de México continúa así su tradi- ción de publicar obras colectivas y multidisciplinarias para com- prender mejor la sociedad mexicana y los problemas que enfrenta hoy día. Ésta es nuestra manera de participar, desde el ámbito académico, en la conmemoración del bicentenario de la Indepen- dencia y el centenario de la Revolución. Agradecemos a la Secre- taría de Educación Pública el apoyo para la realización de este proyecto.
Latin America is often singled out for its high and persistent income inequality. Toward the end of the 1990s, however, income concentration began to fall across the region. Of the seventeen countries for which comparable data are available, twelve have experienced a decline, particularly since 2000. This book is among the first efforts to understand what happened in these countries and why.
Led by editors Felipe López-Calva and Nora Lustig, a panel of distinguished economists undertakes in-depth analyses of Argentina, Brazil, Mexico, and Peru. In addition, they provide essential background in the form of overviews of the relationship between markets and inequality, the political economy of redistribution, and the evolution of income inequality in the advanced industrialized economies. Two factors account for much of the decline in inequality: a decrease in the wage gap between skilled and low-skilled labor, and an increase in government transfers targeted to the poor.
Thanks to the timeliness and sophistication of these essays, Declining Inequality in Latin America is likely to become a standard reference in its field.
Latin America is often singled out for its high and persistent income inequality. Toward the end of the 1990s, however, income concentration began to fall across the region. Of the seventeen countries for which comparable data are available, twelve have experienced a decline, particularly since 2000. This book is among the first efforts to understand what happened in these countries and why.
Led by editors Felipe López-Calva and Nora Lustig, a panel of distinguished economists undertakes in-depth analyses of Argentina, Brazil, Mexico, and Peru. In addition, they provide essential background in the form of overviews of the relationship between markets and inequality, the political economy of redistribution, and the evolution of income inequality in the advanced industrialized economies. Two factors account for much of the decline in inequality: a decrease in the wage gap between skilled and low-skilled labor, and an increase in government transfers targeted to the poor.
Thanks to the timeliness and sophistication of these essays, Declining Inequality in Latin America is likely to become a standard reference in its field.
Este número de Perspectivas sobre el desarrollo contribuye con el debate de la participación del Estado en los procesos de desarrollo de los países, a partir de cuatro documentos que se complementan entre sí. En el pasado reciente, América Latina ha experimentado un importante incremento en el tamaño de sus Estados tanto en términos de gasto como en materia de impuestos. Frente a esta tendencia, la discusión en torno a las finanzas públicas en la región y su papel como promotor del desarrollo, se hace oportuna y crucial.
Latin America has been central to the main debates on development economics, ranging from the relationships between income inequality and economic growth, and the importance of geography versus institutions in development, to debates on the effects of trade, trade openness, and protection on growth and income distribution. Despite increasing interest in the region, there are few English language books on Latin American economics. This Handbook, organized into five parts, aims to fill this gap. Part I looks at long-term issues, including the institutional roots of Latin America's underdevelopment; the political economy of policy making; the rise, decline, and re-emergence of alternative paradigms; and the environmental sustainability of the development pattern. Part II considers macroeconomic topics, including the management of capital account booms and busts, the evolution and performance of exchange rate regimes, the advances and challenges of monetary policies and financial development, and the major fiscal policy issues confronting the region, including a comparison of Latin American fiscal accounts with those of the OECD. Part III analyses the region's economies in global context, particularly the role of Latin America in the world trade system, and the effects of dependence on natural resources (characteristic of many countries of the region) on growth and human development. It reviews the trends of foreign direct investment, and the opportunities and challenges raised by the emergence of China as buyer of the region's commodities and competitor in the world market
El objetivo de esta publicación es divulgar el resultado de trabajos de investigación realizados por investigadores CAF e investigadores auspiciados por el Programa de Apoyo a la Investigación o por otros programas de la Institución. Perspectivas busca acercar al sector académico al debate sobre las políticas públicas en la región, por lo que cuenta con la colaboración de actores de los sectores público, privado y académico de sus países, quienes participan en la discusión de los trabajos sobre los problemas de América Latina.
Latin America has been one of the critical areas in the study of comparative politics. The region’s experiments with installing and deepening democracy and promoting alternative modes of economic development have generated intriguing and enduring empirical puzzles. In turn, Latin America’s challenges continue to spawn original and vital work on central questions in comparative politics: about the origins of democracy; about the relationship between state and society; about the nature of citizenship; about the balance between state and market.
Este volumen repasa las estrategias de desarrollo económico seguidas en la región durante las últimas seis décadas, para después concentrarse en el análisis de temas como las ventajas y desventajas de las estrategias de industrialización por medio de la sustitución de importaciones y de reformas promercado; los distintos tipos de estrategias de integración
regional; la lucha por abatir la desigualdad y la pobreza de ingreso; o el crecimiento económico y su relación con el deterioro ambiental, entre otros. Una obra excepcional en cuanto al análisis de la compleja y contradictoria realidad latinoamericana
Poverty reduction challenges in the twenty-first century are not the same as those from the previous century. The shift is due in no small part to climate change and climate-related weather disasters, such as extreme flood and drought. The magnitude and frequency of such events are only expected to increase in the coming decades, affecting more and more impoverished people across the globe.
Inequality is stirring controversy in developing and advanced economies. Perceptions of unfair disparities in incomes and opportunities can undermine the legitimacy of both authoritarian and democratic governments. Yet the problem is more complex than many on the right or left care to admit. Once it reaches certain levels, income inequality impedes economic growth; at other times it seems an unavoidable trade-off in the pursuit of growth. Finding the proper balance is more than a question of economic theory; it’s a moral and political dilemma.
The eight essays collected in this e-book appeared in Current History from 2012 to 2013 in a monthly series on inequality around the world. Together they form a useful guide to the topic that benefits from Current History’s region-by-region approach. Contributors include Uri Dadush and Kemal Derviş, who provide a global overview; Martin King Whyte on China; Daniel Treisman on Russia; Ahmed Galal on the Middle East; Nora Lustig on Latin America; Jason Beckfield on Europe; Roberto Zagha on India; and Luc Christiaensen and Shantayanan Devarajan on Africa. As their essays show, each of the world’s regions has struggled with the economics and politics of income distribution. Yet, as Dadush and Derviş note, “There is no secret to the recipes that governments can use to mitigate inequality.” The key ingredient may be political will.
Asia’s rapid economic growth has led to a significant reduction in extreme poverty, but accompanied by rising inequality. This book deals with three questions: What have been the trends of inequality in Asia and the Pacific? What are the key drivers of rising inequality in the region? How should Asian countries respond to the rising inequality?
WIDER Studies in Development Economics
Analyzes a new and positive economic trend
Provides a rigorous explanation of this trend on the basis of two methodological approaches
Looks at macroeconomics, foreign trade, taxation, labour market, human capital formation, and social assistance
Shows how the 'open economy policy model' can decrease inequality
Places the economic and econometric analysis within the context of the political changes that have taken place in the region since the early 1990s and in particular since 1998
Una descripción de la información y las lecciones extraídas de la interacción entre las ideas y la práctica en las cuestiones relacionadas con el desarrollo, tras largos años de trabajo del autor en roles de liderazgo de alto nivel tanto para su gobierno como para organizaciones internacionales. Esto incluye, el gobierno de Uruguay (praxis nacional), la Comisión Económica de las Naciones Unidas para América Latina y el Caribe (ideas a nivel regional e internacional), el Banco Interamericano de Desarrollo (praxis regional e internacional) y la Cumbre Iberoamericana (ideas y praxis interregional e internacional).
A description of the insights and lessons learned from the interplay among ideas and praxis on development issues following the author’s long years working in high level leadership roles for his national government and international organizations. This includes in the government of Uruguay (national level praxis), the UN Economic Commission for Latin America and the Caribbean (regional and international ideas), the Inter-American Development Bank (regional and international praxis) and the Ibero-American Summit process (interregional and international ideas and praxis).
Scholars, Policymakers, and International Affairs shows how to build mutually beneficial connections between the worlds of ideas and action, analysis and policy. Drawing on contributions from top international scholars with policy experience in the United States, Europe, Asia, Canada, and Latin America, as well as senior policymakers throughout the Americas, Abraham F. Lowenthal and Mariano E. Bertucci make the case that scholars can both strengthen their research and contribute to improved policies while protecting academia from the risks of active participation in the policy process.
Many scholars believe that policymakers are more interested in processes and outcomes than in understanding causality. Many policymakers believe that scholars are absorbed in abstract and self-referential debates and that they are primarily interested in crafting theories (and impressing other scholars) rather than developing solutions to pressing policy issues.
The contributors to this book confront this gap head-on. They do not deny the obstacles to fruitful interaction between scholars and policymakers, but, drawing on their own experience, discuss how these obstacles can be and have been overcome. They present case studies that illustrate how scholars have helped reduce income inequality, promote democratic governance, improve gender equity, target international financial sanctions, manage the Mexico–U.S. border, and enhance inter-American cooperation. These success stories are balanced by studies on why academic analysts have failed to achieve much positive impact on counternarcotics and citizen security policies. The editors’ astute conclusion identifies best practices and provides concrete recommendations to government agencies, international institutions, nongovernmental organizations, and funding sources, as well as to senior university officials, academic departments and centers, think tanks, established scholars, junior faculty, and graduate students.
Clearly written and thoughtfully organized, this innovative book provides analytic insights and practical wisdom for those who want to understand how to build more effective connections between the worlds of thought and action.
Politicians, business leaders and citizens look with hope to the Latin American middle class for political stability and purchasing power, but the economic position of the middle class remains vulnerable. The contributors document the remarkable emergence of this middle group in Latin America, whose measurement turns out not to be an easy task.
The gap between rich and poor keeps widening. Growth, if any, has disproportionally benefited higher income groups while lower income households have been left behind. This long-run increase in income inequality not only raises social and political concerns, but also economic ones. It tends to drag down GDP growth, due to the rising distance of the lower 40% from the rest of society. Lower income people have been prevented from realising their human capital potential, which is bad for the economy as a whole. This book highlights the key areas where inequalities are created and where new policies are required, including: the consequences of current consolidation policies; structural labour market changes with rising non-standard work and job polarization; persisting gender gaps; the challenge of high wealth concentration, and the role for redistribution policies
Here, I examine the level, redistributive impact and pro-poorness of government spending on education and health for thirteen developing countries from the Commitment to Equity project. Social spending as a share of total income is high by historical standards, and it rises with income per capita and income inequality. Spending on education and health lowers inequality and its marginal contribution to the overall decline in inequality is, on average, 69 percent. There appears to be no “Robin Hood Paradox:” redistribution increases with income inequality, even if one controls for per capita income. Concentration coefficients indicate that spending on pre-school, primary and secondary education is pro-poor in twelve countries. Spending on tertiary education is regressive and unequalizing in three countries, and progressive and equalizing (but not pro-poor) in ten. Health spending is pro-poor in five countries. Of the remaining eight, health spending per capita is roughly equal across the income distribution in three, and progressive and equalizing (but not pro-poor) in five.