Inequality in Latin America - Gini vs. Polarization
According to the statistical appendix of the 2005 World Bank report on inequality in Latin America, on average, inequality appears to be increasing between the early 1990s and the early 2000s (click here for graph). For Karl and Oxhorn, this development is especially negative considering their arguments about inequality in Latin America. For Oxhorn, civil rights and social rights lag behind political rights in Latin America, which precludes the civil society development needed to combat inequality and allay potential conflict. For Karl, the inequality in Latin America reinforces the traditional power structure that perpetuates low growth rates and poverty, and could “subvert democracy” (Karl, 137).
While the increase in inequality as indicated by the 2005 World Bank report is disheartening in light of the arguments by Karl and Oxhorn, other researchers make different arguments about the potential outcomes of inequality. For example, other scholars (such as Wolfson) argue that conflict is more likely to arise from inequality when it is coupled with polarization, whereby there is a large gap between the “have’s” and the “have not’s.” According to these arguments, the disparity between these groups is more likely to produce conflict because clear “battle lines” are drawn, as opposed a more linear distribution of inequality (where there are not clear-cut divisions between socioeconomic groups).
As such, it is interesting to compare the increase in the Gini coefficients of Latin American countries to other measures that assess polarization. For example, the World Bank report notes that with the exception of telephone service, the difference between the highest income quintile and the lowest income quintile in access to water, electricity, and hygienic restrooms has declined in most Latin American countries between 1990 and 2000 (click here for graph).
Similarly, with the exception of college enrollment, the difference between the top and bottom income quintiles in school enrollment rates for 3-17 year-olds decreased between 1990 and 2000 in almost every country in Latin America (click here for graph).
These statistics suggest a trend in the reversal of polarization in non-income related fields of inequality – that the quality of life between the very rich and the very poor became more equal from 1990 and 2000, albeit slowly and unevenly.
Finally, other statistics in the report point to other important gains that might decrease inequality in the future. First, the pay gap between men and women improved between the early 1990s and the early 2000s (click here for graph). Secondly, across almost all Latin American countries, the literacy rates improved between the earliest and latest periods under study (click here for graph).
Thus, while the increase in inequality as judged by Gini coefficients is clearly undesirable, improvements in other areas, especially between the richest and the poorest, might alleviate the negative consequences of inequality that Karl and Oxhorn feared.
Click here for the statistical appendix of the 2005 World Bank Inequality Report (.pdf).