Latin America was already a region of sharp income inequality before the debt crisis and structural reforms of the 1980s and 1990s, when inequality rose in most countries. Around 2000, however, the rising trend not only came to a halt, but was reversed. According to the Socio-Economic Database for Latin America and the Caribbean (or SEDLAC, a project of the World Bank and the National University of La Plata), by 2010 income inequality had declined in all 17 Latin American countries for which comparable data exist. Most impressively, this decline has occurred even as inequality has risen elsewhere, including in China, India, South Africa, and most advanced countries.
Inequality in Latin America has always been linked to the capture of the state by predatory elites, capital market imperfections, lack of access to credit for the poor, inequality of opportunities (in particular, in terms of access to high-quality education), labor market segmentation, and discrimination against women and non-whites. This means that the observed fall in inequality is good news both in terms of fairness and overall economic efficiency.
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