`The key to reducing inequality in Latin America is institutional reform,' says Guillermo Perry, the bank's chief economist for Latin America and the Caribbean and co-author of the study. `To overcome the inequality that undermines their efforts to get out of poverty, poor people must gain influence within political and social institutions, including educational, health and public services institutions. To enable them to achieve such influence, the institutions must be truly open, transparent, democratic, participatory — and strong.'
The study concludes that success in `breaking with the long history of inequality in Latin America' depends on `strong leadership and broad coalitions' to achieve progress in the first area for action, to mobilise `the political agency of progressive governments and the poor.' As institutional reform proceeds, allowing poor people to gain purchase on decision-making, policies to reduce inequality, it suggests, are more likely to be adopted.
Three areas are identified as those where specific reforms would have most impact in reducing inequality: fiscal and financial institutions, public services and the region's `truncated, elitist welfare state'. The study offers some specific measures as illustrations of what is possible. For example, targeted income transfers conditioned on keeping children in school and attending health services. In making the case for expanded use of conditional cash transfers, the research team cites examples of successful programmes under way in Mexico, Brazil and Nicaragua.
Brazil is most unequal, Mexico mixed
Points made during the presentation of the study by the World Bank's regional vice-president, David de Ferranti, chief economist Guillermo Perry, poverty and human development adviser Michael Walton, and consultant Francisco Ferreira.
- Brazil is the most unequal country in the region, even though its tax revenues exceed those of Mexico. It spends more than Mexico, but the distribution is unequal.
- Mexic
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