Neoliberalism and income distribution in Latin America

This paper reviews the principal neoliberal policy measures instituted in Latin America in the last decade and their impact on equity. It first emphasizes the difficulty of separating the impact of liberalization measure from the necessary fiscal adjustments of the 1980s, and their transitional vs long-run effects, and then places the observed movements in distribution in global and historical context. The second part places several innovations of neoliberal regimes in historical perspective and argues that their overall impact is unlikely to be regressive, and that previous regimes were probably not especially progressive. Over the long run, developments in factor markets - the demand side, driven by reoriented industrial growth and the increasing importance of the service sector, interacting with the relative supplies of skilled and unskilled labor - are likely to be of overriding importance in determining the evolution of the distribution of income. (C) 1997 Elsevier Science Ltd.