How Can Latin American Governments Work to Sustain Falling Income Inequality?
Since 1980, the poverty rate in Latin America has fallen 30%, a third of the decline due to progressive shifts in the income distribution.1 In 2000, a quarter of the region (25 in every 100 Latin Americans) lived on less than $2.50 a day. Today, fewer than 14 in every 100 do.2 Since roughly 2002, falling income inequality is visible in the entirety of the heterogeneous region: among commodity driven economies such as Peru and manufacturing dominant ones such as Mexico. How can one explain the common outcome given the diversity of the region’s makeup?