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Trading Inequality? Insights from the Two Globalizations in Latin America

Trade flows among countries have increased dramatically during the last globalization episode creating new winners and losers between and within countries. This paper revisits the contested topic of the impact of globalization on within-country inequality in Latin America from a historical perspective. By comparing the two globalization waves (1870–1914, 1970–present) we look at the link between globalization and inequality. Many Latin American countries are still dependent on exporting raw materials, lack an efficient manufacturing sector, and exhibit the highest inequality rates in the world. One hundred years ago, several decades after independence, the region was also highly unequal, specialized in a handful of commodity exports, and had not made the transition to industrialization. The results indicate that the effect of globalization on inequality operates mainly inducing changes in factor endowments while the adoption of labor-saving technologies appears influential in both periods.
Publisher:
UNU-WIDER
Series:
WIDER Research Paper
Volume:
2009/44
Title:
Trading Inequality? Insights from the Two Globalizations in Latin America
Authors:
A. Leticia Arroyo Abad and Amelia U. Santos-Paulino
Publication date:
September 2009
ISSN Web:
1810-2611
ISBN Web:
9789292302214
Copyright holder:
© UNU-WIDER
Copyright year:
2009
Keywords:
income inequality, economic history, globalisation, terms of trade, Latin America
JEL:
D3, F1, N36, N7, O0
Project:
Southern Engines of Global Growth
Sponsor:
UNU-WIDER gratefully acknowledges the financial contribution from the governments of Denmark (Royal Ministry of Foreign Affairs), Finland (Ministry for Foreign Affairs), Sweden (Swedish International Development Cooperation Agency—Sida) and the United Kingdom (Department for International Development).
Format:
online
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