Policy Brief
Falling Inequality in Latin America

Policy Changes and Lessons

This policy brief examines the determinants of the recent decline of income inequality in Latin America. Since the beginning of the twenty-first century the region has enhanced its growth performance, reduced social polarization, and improved macroeconomic stability. The most striking change consisted in a sizeable drop in income inequality benefitting both the poor and the middle class. The recent Latin American experience constitutes an important blueprint for other developing countries moving from authoritarian to democratic regimes, opening up to the market, and emerging from severe crises.