Declining Inequality in Latin America: Some Economics, Some Politics

31 Pages Posted: 19 Jul 2011 Last revised: 20 Jul 2011

See all articles by Nancy Birdsall

Nancy Birdsall

Center for Global Development

Nora Lustig

Tulane University

Darryl McLeod

Fordham University

Date Written: May 19, 2011


Latin America is known to have income inequality among the highest in the world. That inequality has been invoked to explain low growth, poor education, macroeconomic volatility, and political instability. But new research shows that inequality in the region is falling.

In this paper, we summarize recent findings on the decline in inequality across the region, analyze how the type of political regime (populist, social democratic, right of center) matters to the sustainability of the decline, and investigate the relationship between changes in inequality and changes in the size of the middle class in the region. We conclude with some questions about whether and how changes in income distribution and in middle-class economic power will affect the politics of distribution in the future.

Keywords: inequality, Latin America, middle class, political regime

JEL Classification: F30, D63

Suggested Citation

Birdsall, Nancy and Lustig, Nora Claudia and McLeod, Darryl, Declining Inequality in Latin America: Some Economics, Some Politics (May 19, 2011). Center for Global Development Working Paper No. 251. Available at SSRN: or

Nancy Birdsall (Contact Author)

Center for Global Development ( email )

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Nora Claudia Lustig

Tulane University ( email )

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Darryl McLeod

Fordham University ( email )

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7188173816 (Fax)

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