Abstract

This paper reviews the principal neo-liberal 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 measures 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
neo-liberal 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 are likely to be of overriding importance – 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.

JEL Classification: F62; F66; O11.