ABSTRACT
Latin American countries have some of the highest levels of income inequality in the world with an average Gini coefficient1 above 0.50 since the 1960s (Table 2.1).2 Although there were significant reductions in income poverty in Latin America during the 1990s (Table 2.2 and Appendix B), income inequality hardly changed during the same period.3 High levels of inequality pose a serious threat to recent development undertakings, not only because inequalities may undermine efforts to eliminate poverty and destitution, but also because persistent inequalities waste financial and human resources, erode social cohesion and, consequently, pose serious constraints to the process of social and economic development.
