The Income Distribution Problem in Latin America and the Caribbean

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This publication examines the impact of structural reform on income distribution in the nine countries of Latin America and the Caribbean. Distribution in the region is the most unequal in the world, and this publication identifies and discusses the contributing factors.




The clamour about income distribution in Latin America is increasing. The region’s distribution is the most unequal in the entire world, which has been true for as long as statistics have been kept. Too much of the fruits of economic growth in the region has gone to those who already had a high income, too little has trickled down to those who needed it. Many critics feel that the new economic model now being followed in Latin America is making the situation worse. Opening national borders to low-wage imports, freeing capital flows from government control, privatizing State enterprises and shifting away from progressive income tax systems to broad-based taxes on consumption: all of these reforms might reasonably be expected to shift the distribution of income toward the rich.


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