Democracy and Poverty in Latin America: Which One Will Win or can they coexist

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Democracy and Poverty in Latin America Which One
Will Win? (or can they co-exist?)

• Christopher Sabatini
• Senior Director of Policy/Editor-in-Chief,
  Americas Quarterly
• Americas Society and Council of the Americas

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The Match Up

• Poverty VS. Democracy
• Democracy VS. Poverty

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Introduction

• Status of Democracy in the Region
• Levels of Poverty and Inequality in the Region
• Three (Relative) Success Stories
• Comparison of Democracy with Poverty, Inequality,
  GDP per Capita and Economic Growth
• Democratic Governance and Poverty Alleviation
  the Comparative Track Record

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Democratic Improvements and Limitations Elections

• The UNDP Index of Electoral Democracy

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Poverty and Economic Growth
Source Guillermo E. Perry, Omar S. Arias, J.
Humbeto López, William F. Maloney and Luis
Servén, Poverty Reduction and Growth Virtuous
and Vicious Circles, (Washington, DC The World
Bank), 2006
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Poverty By Country
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Income Inequality
Gini Coefficient Late 1990s to Early 2000s
Source David De Ferranti, Guillermo E. Perry,
Francisco H. G. Ferreira, Michael Walton,
Inequality in Latin America. Breaking with
History, (Washington, DC The World Bank), 2004.
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Poverty Alleviation
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Democracys Effects on Poverty and Inequality

• Higher levels of democracy are associated with
  higher quality of governance, an improved
  investment profile and increased government
  effectiveness.
• Democracy is positively correlated with reduction
  in poverty insofar as it improves governance
• But good governance does not ensure policies that
  are particularly pro poor

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Democracys Effects (continued)

• Democracy can lead to a reduction in poverty but
  the gains are weaker in the reduction of
  inequality
• Gains wash out in situations of ethnic and social
  fragmentation
• In highly fractionalized countries, democracy can
  actually lead to greater inequality and lower
  human development outcomes

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Conclusions (continued)

• Theoretical arguments about democracy and the
  alleviation of poverty assume effective,
  institutionalized channels to include citizens in
  the process. The reality in the region is far
  different
• Overcoming the deficit in representation is key
  to more balanced and effective anti-poverty
  programs. Failing to build institutional
  channels for inclusion will breed greater
  polarization
• Growing levels of polarization in countries like
  Bolivia and Venezuela are inimical to long-term
  reduction of poverty and inequality.

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Conclusions

• Beyond the poorest countries (Bolivia, Ecuador,
  Nicaragua, Guatemala, Paraguay and Haiti) there
  is not a perfect correlation between poverty and
  challenges to democracy (FH)
• Democracy has continued to endure despite
  difficult conditions
• Democracy, like economic growth, is necessary but
  not sufficient for alleviating poverty and
  addressing inequality