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The Inefficiency of Inequality

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  • ECLAC

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Abstract

Consistently with the emphasis that the Economic Commission for Latin America and the Caribbean (ECLAC) has placed on equality since 2010, and in keeping with the purpose of leaving no one behind enshrined in the 2030 Agenda for Sustainable Development, this document examines the mechanisms by which inequality erodes dynamic inefficacy in the Latin American and Caribbean economies. It analyses and measures the productivity and income effects of unequal access to health and education, as well as the consequences of inequality of opportunities arising from gender-, race- or ethnicity-based discrimination. It also examines how these inequalities play out at the level of territory, infrastructure and urban dynamics, where their costs not only weigh on productivity, but also worsen energy inefficiencies and environmental degradation, thereby compromising the development possibilities of present and future generations. Inequality imposes constraints on innovation and creativity that are all the heavier because they are embedded within the culture of agents, which creates a culture of privilege in which many public goods and rights are not universal, but denied to much of the population. This weakens trust in social interactions and in democratic institutions. Here, ECLAC proposes strategic guidelines for increasing the dynamic efficiency of the Latin American and Caribbean economies on the basis of equality. Capacity-building and the construction of welfare States are at the heart of a new development paradigm that puts the technological revolution at the service of low-carbon, technology-intensive growth. In this regard, and in view of the rapid transformations and mounting uncertainties in the global economy, the region urgently needs stronger public and private investment revolving around an environmental big push in order to diversify its production structure and even out its structural disparities.

Suggested Citation

  • -, 2018. "The Inefficiency of Inequality," Libros y Documentos Institucionales, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL), number 43443 edited by Eclac.
  • Handle: RePEc:ecr:col016:43443
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    File URL: http://repositorio.cepal.org/handle/11362/43443
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    Citations

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    Cited by:

    1. Luis René Cáceres, 2021. "Youth Unemployment and Underdevelopment in Honduras," International Journal of Economics and Finance, Canadian Center of Science and Education, vol. 13(2), pages 1-61, February.
    2. Romero, João P. & Gramkow, Camila, 2021. "Economic complexity and greenhouse gas emissions," World Development, Elsevier, vol. 139(C).
    3. Espinoza-Delgado, José & Silber, Jacques, 2018. "Multi-dimensional poverty among adults in Central America and gender differences in the three I’s of poverty: Applying inequality sensitive poverty measures with ordinal variables," MPRA Paper 88750, University Library of Munich, Germany.
    4. -, 2021. "Building forward better: Action to strengthen the 2030 Agenda for Sustainable Development. Fourth report on regional progress and challenges in relation to the 2030 Agenda for Sustainable Development ," Libros y Documentos Institucionales, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL), number 46696 edited by Eclac.
    5. Irarrázaval, Andrés, 2020. "The fiscal origins of comparative inequality levels: an empirical and historical investigation," Economic History Working Papers 107491, London School of Economics and Political Science, Department of Economic History.
    6. Vladimir Hlasny & Paolo Verme, 2022. "On the ‘Arab Inequality Puzzle’: A Comment," Development and Change, International Institute of Social Studies, vol. 53(2), pages 448-458, March.
    7. Gilbert Achcar, 2020. "On the ‘Arab Inequality Puzzle’: The Case of Egypt," Development and Change, International Institute of Social Studies, vol. 51(3), pages 746-770, May.
    8. Gabriel Porcile & Diego Sanchez-Ancochea, 2021. "Institutional change and political conflict in a structuralist model [Paths to inclusive institutions]," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 45(6), pages 1269-1296.
    9. Carlos Mendez & Mitsuhiko Kataoka, 2021. "Disparities in regional productivity, capital accumulation, and efficiency across Indonesia: A club convergence approach," Review of Development Economics, Wiley Blackwell, vol. 25(2), pages 790-809, May.
    10. Mitsuhiko Kataoka, 2022. "Perspiration versus inspiration: sources of national and provincial output growth in Indonesia [1990–2015] using province-level non-parametric frontier analysis," Asia-Pacific Journal of Regional Science, Springer, vol. 6(1), pages 113-139, February.
    11. Irarrázaval, Andrés, 2020. "The fiscal origins of comparative inequality levels: an empirical and historical investigation," LSE Research Online Documents on Economics 107491, London School of Economics and Political Science, LSE Library.
    12. Diego Sanjurjo, 2020. "Taking the multiple streams framework for a walk in Latin America," Policy Sciences, Springer;Society of Policy Sciences, vol. 53(1), pages 205-221, March.
    13. Ragdad Cani Miranti, 2021. "Is regional poverty converging across Indonesian districts? A distribution dynamics and spatial econometric approach," Asia-Pacific Journal of Regional Science, Springer, vol. 5(3), pages 851-883, October.
    14. Bustos, Claudio & Candia Cid, Jessica & Martínez, David & Merino Escobar, José Manuel, 2021. "Inequality and social polarization in Chilean municipalities," Revista CEPAL, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL), April.
    15. -, 2022. "Innovation for development: The key to a transformative recovery in Latin America and the Caribbean," Libros y Documentos Institucionales, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL), number 47795 edited by Eclac.
    16. Carlos Mendez, 2020. "Regional efficiency convergence and efficiency clusters," Asia-Pacific Journal of Regional Science, Springer, vol. 4(2), pages 391-411, June.
    17. Mitsuhiko Kataoka, 2020. "Total factor productivity change in Indonesia’s provincial economies for 1990–2015: Malmquist productivity index approach," Letters in Spatial and Resource Sciences, Springer, vol. 13(3), pages 233-243, December.
    18. Mendez-Guerra, Carlos & Kataoka, Mitsuhiko, 2020. "Disparities in Regional Productivity, Capital Accumulation, and Efficiency across Indonesia: A Convergence Clubs Approach," MPRA Paper 99322, University Library of Munich, Germany.
    19. -, 2019. "Fiscal Panorama of Latin America and the Caribbean 2019: Tax policies for resource mobilization in the framework of the 2030 Agenda for Sustainable Development," Libros y Documentos Institucionales, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL), number 44517 edited by Eclac.
    20. Gilbert Achcar, 2022. "On the ‘Arab Inequality Puzzle’: A Rejoinder," Development and Change, International Institute of Social Studies, vol. 53(2), pages 459-466, March.

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