CEPAL Review - Volume 1998, Issue 65, 1998

Great social inequality has long been a frustrating feature of Latin American economic development. Not in vain has Latin America been described as the region of the world with the highest levels of inequality of income distribution. Although the prevailing levels of poverty are lower than those typical of other parts of the developing world, they are still extremely high and, taking the region as a whole, are higher now than they were before the debt crisis.

Public military expenditure (PME) has been analysed very little in the region, mainly for political reasons, which have also limited access to the relevant information. Because of various events, however, it is beginning to be the subject of economic analysis both by governments and by multilateral bodies, especially with regard to its appropriate level (how much is enough?), its opportunity cost (what are its direct and indirect economic impacts?), and its cost-effectiveness as a system of acquiring arms (what is its effect per monetary unit?).

After more than a decade of economic reform and structural adjustment in the developing countries, there is increased recognition that economic growth and social equity must go hand in hand. This article starts by asking what is meant by “social equity". It notes that reduction of poverty and improvement of income distribution are two perfectly complementary policy objectives, since less inequality can help both to reduce poverty and to speed up economic growth. It reviews the main elements of the modem theory of distributive justice, covering the ethical and economic dimensions of inequality.

Is the degree of competitiveness of countries independent of their degree of inequality? Is competitiveness only a question of microeconomic and sectoral efficiency, of the real exchange rate, or is it also a social question? So far, the specialized literature has ignored the problem of equity in the determination of countries’ competitiveness. It has then not been able to fully explain the observed competitiveness, however. In this article, equity is incorporated into the production function and also into investors’ decisions in a world of perfect mobility of capital.

In the economic history of Latin America, a growing population demanded jobs; creating more jobs required industrialization; and industrialization made it necessary to cover a productivity differential. There were two feasible options for this purpose: i) to preserve allocative efficiency and generate a major regressive income redistribution process; or ii) to lose allocative efficiency but leave the distribution of income largely unchanged. Governments chose the latter and built in lasting distortions in the foreign exchange market. Import substitution industrialization ended in stagnation. Increased pressure in the labour market could have driven wages sharply downward, but instead the informal market arose and, thanks to its monopolistically competitive structure, segmented the goods markets and ensured a minimally acceptable form of income distribution.

This article analyses the relations between the competitiveness of an economy and the labour regulations in force in it. It is argued that economic theory is not conclusive regarding the impact of labour regulations on competitiveness, since different schools of thought maintain opposing positions in many respects. Moreover, empirical research has shown that the information provided with respect to these assumed linkages is not very relevant Various policy consequences follow from this: countries have a variety of strategies at their disposal and greater leeway that is usually suggested, since many policies aimed at improving equity do not necessarily involve any restrictions on competitiveness.

The structure, functions and everyday practices of families have changed considerably due to the impact of the demographic, social and economic transformations which have taken place in Latin America. This article begins by describing the complexity and diversity of urban families, on the basis of quantitative data. It then analyses the material conditions through which families have passed and the new approach to these changes. Particular emphasis is placed on such matters as female heads of household and poverty, intra-family violence, and the economic contributions of women and children to the household and to society.

This article analyses the relations between economic integration processes, employment and equality of opportunities between men and women. To this end, the case of Chile is considered, where simultaneous processes of internationalization of the economy, the pursuit of economic integration agreements and the growing incorporation of women into the labour force are taking place. The relation between integration agreements and the labour situation of women derives from three factors. Firstly, the new trade flows affect employment and wages, and there may be a differential effect by sex if the female labour force is concentrated in particular, sectors of production.

This article looks at macroeconomic trends in Paraguay since 1989: a critical date, because it marks the return to democracy and a move towards liberalization of the economy. The stabilization process embarked upon at that time resulted in favourable evolution of the monetary variables, but not of investment or of growth of the product. The combination of heavy inflows of capital and an excessive increase in aggregate demand gave rise to a growing external imbalance reflected in a domestic consumption bubble.

Almost 60% of the biggest non-financial groups in Mexico carry on at least two types of activities in transnational markets. This article describes and analyses the various internationalization paths and strategies of Mexican firms. This drive for internationalization is taking place against the background of an open export-oriented economy and growing integration with the United States and Canada. There are various national and international factors, as well as others specific to the firms themselves, which influence the strategies chosen and their results.

Ever since the 1970s, the governm ents of the region have been transferring public com panies and other State institutions to the private sector in one m anner or another. Privatization has now spread to all sectors of the economy, including drinking water supply and sanitation services. Private sector involvement in the provision of these services offers potentially significant efficiency gains, but it will not, in itself, guarantee lasting welfare improvement unless these services are provided in a competitive market.

Hie author aims to demonstrate the importance of quality issues in national strategies for increased productivity and competitiveness in Latin America. Quality is an important factor in today’s increasingly globalized and liberalized markets, and the application of quality management techniques is therefore considered to make a positive contribution to the competitive performance of countries, economic sectors and individual organizations. Since competitiveness contributes to sustainable development, the widespread diffusion and implementation of quality management seems desirable from a national point of view.