ABSTRACT
On average, the countries of Latin America suffer from the greatest income inequality in the world. This chapter attempts to assemble the available evidence on inequality, expand it with special statistical information, and use it systematically to test a wide range of potential explanations and remedies. It identifies five development trends in particular whose effects on inequality follow just such a tortuous path: capital accumulation, urbanization, formalization of the workforce, education, and the demographic transition. In each case, Latin American countries are either close to or on the crest of the development wave, suffering the transitional effects of greater inequality but poised for the long-term rewards. The chapter reviews the policies aimed at furthering the five key development trends, promoting their mutual reinforcement, and converting the region's characteristic impediments to equitable growth into viable assets for reconciling development and equality.
