Systematic Economic Change And Poverty Reduction

1736 Words Nov 3rd, 2015 7 Pages
James Stewart
Matias Bianchi
Systematic Economic Change and Poverty Reduction: The Effects of Governance on Inequality Liberalization is a term that has dominated the minds, and governments of Latin America from the advent of the region-encompassing debt-crisis of the 1980s. Many reforms, with the idea of opening up the market and reducing barriers to trade in order to increase growth, control inflation, and reduce social unrest, have taken hold in the region in notable countries such as Mexico. In, “Programs on Poverty and Inequality: Chile, Mexico, and Peru,” John Sheahan explores the reasons as to why liberalization programs have seemingly worked in some countries, and have had lackluster effects in others. Chile, for example, is often cited as the shining beacon of economic example in Latin America, and is also grouped in with the East Asian economies that developed to the level of Western Europe from the 1980s onwards. Conversely, Mexico has had disappointing growth that has never recovered to pre-1980s levels, along with social unrest and failures in governance. This paper will explore the questions: Why does poverty persist so much in some countries in the region e.g. Mexico, and Peru to a lesser extent, and why does it seem effectively controlled in other parts, such as in Chile? Sheahan argues that direct social programs are increasing in popularity as effective forms of controlling the negative effects of liberalization reforms, but that they…
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