Hostname: page-component-78c5997874-dh8gc Total loading time: 0 Render date: 2024-11-19T21:53:54.588Z Has data issue: false hasContentIssue false
  • English
  • Français

Trade Liberalization, Deindustrialization, and Inequality: Evidence from Middle-Income Latin American Countries

Published online by Cambridge University Press:  05 September 2022

Juan Ariel Bogliaccini
Juan Ariel Bogliaccini*
Affiliation:
University of North Carolina at Chapel Hill
Rights & Permissions [Opens in a new window]

Abstract

Core share and HTML view are not available for this content. However, as you have access to this content, a full PDF is available via the ‘Save PDF’ action button.

This article explores the relationship among trade liberalization, deindustrialization, and income inequality in the more industrially advanced Latin American countries. It argues that, among the most important liberal reforms implemented during the 1980s and 1990s, trade reform was especially detrimental to equality because it accelerated deindustrialization. The analysis provides evidence to support this mechanism. Therefore, as the liberalization of trade increased, the deindustrialization process produced an increase in inequality. In short, evidence shows how the process of economic integration to the global market, as it took place, produced an increase in inequality through the destruction of formal employment.

Resumo

Resumo

Este artículo explora la relación entre la liberalización del comercio, la desindustrialización y la desigualdad en el grupo de países con mayor desarrollo industrial relativo en América Latina. El artículo argumenta que, entre las reformas liberalizadoras más importantes llevadas a cabo en la región entre las décadas de 1980 y 1990, la liberalización del comercio fue especialmente nociva para la equidad de ingresos mediante la aceleración del proceso de desindustrialización. El análisis provee evidencia sobre este mecanismo. Entonces, mientras la liberalización del comercio avanzaba, el proceso de desindustrialización produjo un incremento en la desigualdad de ingreso. La evidencia sugiere que el proceso de integración al mercado global, del modo en que se llevó adelante, produjo un incremento en la desigualdad a través de la destrucción del empleo formal.

Type
Research Article
Information
Latin American Research Review , Volume 48 , Issue 2 , 2013 , pp. 79 - 105
Copyright
Copyright © 2013 by the Latin American Studies Association

Footnotes

I am thankful to Evelyne Huber, John D. Stephens, Jonathan Hartlyn, James Stimson, Lars Schoultz, Fernando Filgueira, Merike Blofield, Sarah Brooks, Juan Pablo Luna, Sara Niedzwiecki, Santiago Anria, Jan Rovny, Jon Kropko, Diego Hernández, Federico Rodríguez, Santiago Cardozo, Russell Bither-Terry, the late Pablo Alegre, and three anonymous LARR reviewers for their extremely useful comments on previous versions of this article. I also thank Lars Schoultz, David Schwartz, and Alicia Nin for their extensive editorial suggestions and corrections.

References

Aedo, C., and Lagos, L. 1984 “Protección efectiva en Chile, 1974–1979.” Documento de Trabajo No. 94, Instituto de Economía, Universidad Católica de Chile, Santiago.Google Scholar
Alderson, Arthur S., and Nielsen, François 1999 “Income Inequality, Development, and Dependence: A Reconsideration.” American Sociological Review 64 (4): 606–631.CrossRefGoogle Scholar
Appel, Hilary 2000 “The Ideological Determinants of Liberal Economic Reform: The Case of Privatization.” World Politics 52 (4): 520–549.CrossRefGoogle Scholar
Beck, Nathaniel, and Katz, Jonathan N. 1995 “What To Do (and Not To Do) with Time-Series Cross-Section Data.” American Political Science Review 89 (3): 634–647.CrossRefGoogle Scholar
Beck, Nathaniel, and Katz, Jonathan N. 1996 “Nuisance vs. Substance: Specifying and Estimating Time-Series Cross-Section Models.” Political Analysis 6 (July): 1–37.CrossRefGoogle Scholar
Beyer, Harald, Rojas, Patricio, and Vergara, Rodrigo 1999 “Trade Liberalization and Wage Inequality.” Journal of Development Economics 59 (1): 103–123.CrossRefGoogle Scholar
Bhagwati, Jagdish, and Martin, Ricardo 1980 “Un enfoque sobre estrategias de comercio internacional y sus incidencias sobre el empleo y el crecimiento económico.” In ¿Se puede superar la pobreza? Realidad y perspectivas en América Latina. Santiago, Chile: Comisión Económica para América Latina and Programa de las Naciones Unidas para el Desarrollo.Google Scholar
Bogliaccini, Juan Ariel, and Filgueira, Fernando 2011 “Capitalismo en el Cono Sur de América Latin luego del final del Consenso de Washington: ¿notas sin partitura?” Revista del CLAD Reforme y Democracia 51:24–56.Google Scholar
Brady, David, Kaya, Yunus, and Gereffi, Gary 2011 “Stagnating Industrial Employment in Latin America.” Work and Occupations 38 (2): 179–220.CrossRefGoogle Scholar
Brambor, Thomas, Clark, William Roberts, and Golder, Matt 2005 “Understanding Interaction Models: Improving Empirical Analyses.” Political Analysis 14 (1): 63–82.CrossRefGoogle Scholar
Brune, Nancy, Garrett, Geoffrey, and Kogut, Bruce 2004 “The International Monetary Fund and the Global Spread of Privatization.” International Monetary Fund Staff Papers 51 (2): 195–219.Google Scholar
Bulmer-Thomas, Victor, ed. 1996 The New Economic Model in Latin America and Its Impact on Income Distribution and Poverty. London: Institute of Latin American Studies, University of London.CrossRefGoogle Scholar
Cardoso, Fernando Henrique, and Faletto, Enzo 1979 Dependency and Development in Latin America. Berkeley: University of California Press.CrossRefGoogle Scholar
Chinn, Menzie D., and Ito, Hiro 2008 “A New Measure of Financial Openness.” Journal of Comparative Policy Analysis 10 (3): 309–322.Google Scholar
Collier, Ruth Berins, and Collier, David 1991 Shaping the Political Arena: Critical Junctures, the Labor Movement, and Regime Dynamics in Latin America. Princeton, NJ: Princeton University Press.Google Scholar
De Boef, Suzanna, and Keele, Luke 2008 “Taking Time Seriously.” American Journal of Political Science 52 (1): 184–200.CrossRefGoogle Scholar
Díaz-Cayeros, Alberto, and Magaloni, Beatriz 2001 “Party Dominance and the Logic of Electoral Design in Mexico's Transition to Democracy.” Journal of Theoretical Politics 13 (3): 271–293.CrossRefGoogle Scholar
Drezner, Daniel W. 2001 “Globalization and Policy Convergence.” International Studies Review 3 (1): 53–78.CrossRefGoogle Scholar
Drezner, Daniel W. 2007 All Politics Is Global: Explaining International Regulatory Regimes. Princeton, NJ: Princeton University Press.Google Scholar
ECLAC (Economic Commission for Latin America and the Caribbean) 1993 Social Panorama of Latin America. Santiago, Chile: ECLAC.Google Scholar
ECLAC (Economic Commission for Latin America and the Caribbean) 2010 Social Panorama of Latin America. Santiago, Chile: ECLAC.Google Scholar
Enders, Walter 2004 Applied Econometric Time Series. Hoboken, NJ: Wiley.Google Scholar
Escaith, Hubert, and Paunovic, Igor 2004 “Reformas estructurales en América Latina y el Caribe en el periodo 1970–2000.” ECLAC. http://ssrn.com/abstract=1158491.Google Scholar
Esping-Andersen, G⊘sta 1990 The Three Worlds of Welfare Capitalism. Cambridge: Polity Press.Google Scholar
Feenstra, Robert C, and Hanson, Gordon H. 1997 “Foreign Direct Investment and Relative Wages: Evidence from Mexico's Maquiladoras.” Journal of International Economics 42 (3): 371–393.CrossRefGoogle Scholar
Filgueira, Carlos H., and Filgueira, Fernando 2002 “Models of Welfare and Models of Capitalism: The Limits of Transferability.” In Models of Capitalism: Lessons for Latin America, edited by Huber, Evelyne, 127–158. University Park: Pennsylvania State University Press.Google Scholar
Filgueira, Fernando, and Bogliaccini, Juan Ariel 2004 “Las reformas educacionales en Chile y Uruguay: Descentralización orientada al mercado versus centralismo estatista.” In Descentralización y políticas sociales en América Latina, edited by Gomà, Ricard and Jordana, Jacint, 297–348. Barcelona: Centre d'Estudis i Documentació Internacionais (CIDOB).Google Scholar
Gatica Barros, Jaime 1989 Deindustrialization in Chile. Boulder, CO: Westview Press.Google Scholar
Goldthorpe, John H., ed. 1984 Order and Conflict in Contemporary Capitalism. Oxford, UK: Clarendon Press.Google Scholar
Hanson, Gordon H., and Harrison, Ann 1999 “Trade Liberalization and Wage Inequality in Mexico.” Industrial and Labor Relations Review 52 (2): 271–288.CrossRefGoogle Scholar
Harvey, David 2005 A Brief History of Neoliberalism. New York: Oxford University Press.CrossRefGoogle Scholar
Heston, Alan, Summers, Robert, and Aten, Bettina 2009 Penn World Table Version 6.3. Center for International Comparisons of Production, Income and Prices at the University of Pennsylvania, August.Google Scholar
Honaker, James, and King, Gary 2007 “What to Do about Missing Values in Time Series Cross-Section Data.” http://gking.harvard.edu/files/pr.pdf.Google Scholar
Huber, Evelyne 1996 “Options for Social Policy in Latin America: Neoliberal versus Social Democratic Models.” In Welfare States in Transition: National Adaptations in Global Economies, edited by Esping-Andersen, G⊘sta, 141–191. London: Sage.Google Scholar
Huber, Evelyne 2002 Models of Capitalism: Lessons for Latin America. University Park: Pennsylvania State University Press.Google Scholar
Huber, Evelyne, Nielsen, François, Pribble, Jenny, and Stephens, John D. 2006 “Politics and Inequality in Latin America and the Caribbean.” American Sociological Review 71 (December): 943–963.CrossRefGoogle Scholar
Huber, Evelyne, and Stephens, John D. 2001 Development and Crisis of the Welfare State: Parties and Policies in Global Markets. Chicago: University of Chicago Press.CrossRefGoogle Scholar
ILO (International Labor Organization) 1998 Labor Panorama. Geneva: ILO.Google Scholar
ILO (International Labor Organization) 2010 Online Database on Labor Statistics (LABORSTA). http://laborsta.ilo.org.Google Scholar
IMF (International Monetary Fund) 2010a Government Finance Statistics Yearbook. New York: IMF.Google Scholar
IMF (International Monetary Fund) 2010b International Financial Statistics Yearbook. New York: IMF.Google Scholar
Iversen, Torben 2005 Capitalism, Democracy, and Welfare. New York: Cambridge University Press.CrossRefGoogle Scholar
Jensen, Nathan M., and Rosas, Guillermo 2007 “Foreign Direct Investment and Income Inequality in Mexico, 1990–2000.” International Organization 61 (2): 467–487.CrossRefGoogle Scholar
Kaufman, Robert R., and Segura-Ubiergo, Alex 2001 “Globalization, Domestic Politics, and Social Spending in Latin America: A Time-Series Cross-Section Analysis, 1973–97.” World Politics 53 (4): 553–587.CrossRefGoogle Scholar
Keohane, Robert 1984 “The World Political Economy and the Crisis of Embedded Liberalism.” In Order and Conflict in Contemporary Capitalism, edited by Goldthorpe, John H., 15–38. Oxford, UK: Clarendon Press.Google Scholar
Kuznets, Simon 1955 “Economic Growth and Income Inequality.” American Economic Review 45 (1): 1–28.Google Scholar
Maddala, G. S., and Wu, Shaowen 1999 “A Comparative Study of Unit Root Tests with Panel Data and a New Simple Test.” Oxford Bulletin of Economics and Statistics 61 (S1): 631–652.CrossRefGoogle Scholar
Madrid, Raúl L. 2005 “Ideas, Economic Pressures, and Pension Privatization.” Latin American Politics and Society 47 (2): 23–50.CrossRefGoogle Scholar
Marjit, Sugata, and Acharyya, Rajat 2003 International Trade, Wage Inequality and the Developing Economy: A General Equilibrium Approach. New York: Physica-Verlag.CrossRefGoogle Scholar
Marjit, Sugata, Beladi, Hamid, and Chakrabarti, Avik 2004 “Trade and Wage Inequality in Developing Countries.” Economic Inquiry 42 (2): 295–303.CrossRefGoogle Scholar
Morley, Samuel A. 2001 The Income Distribution Problem in Latin America and the Caribbean. Santiago, Chile: United Nations Press.CrossRefGoogle Scholar
Morley, Samuel A., Machado, Roberto, and Pettinato, Stefano 1998 Indexes of Structural Reform in Latin America. Reformas Económicas No. 12. Santiago, Chile: United Nations Press.Google Scholar
Mosley, Layna, and Uno, Saika 2007 “Racing to the Bottom or Climbing to the Top? Economic Globalization and Collective Labor Rights.” Comparative Political Studies 40 (8): 923–948.CrossRefGoogle Scholar
Polanyi, Karl 1944 The Great Transformation. Boston: Beacon Press.Google Scholar
Pontusson, Jonas 2005 Inequality and Prosperity: Social Europe vs. Liberal America. Ithaca, NY: Cornell University Press.CrossRefGoogle Scholar
Portes, Alejandro, and Hoffman, Kelly 2003 “Latin American Class Structures: Their Composition and Change during the Neoliberal Era.” Latin American Research Review 38 (1): 41–82.CrossRefGoogle Scholar
Portes, Alejandro, and Roberts, Bryan R. 2005 “The Free-Market City: Latin American Urbanization in the Years of the Neoliberal Experiment.” Studies in Comparative Institutional Development 40 (1): 43–82.CrossRefGoogle Scholar
Prebisch, Raúl 1952 Problemas teóricos y prácticos del crecimiento económico. Santiago, Chile: Comisión Económica para América Latina y el Caribe. Reprinted in Cincuenta años de pensamiento de la CEPAL, vol. 1. Santiago, Chile: ECLAC and Fundación de Cultura Económica, 1998.Google Scholar
Rueschemeyer, Dietrich, Stephens, Evelyne Huber, and Stephens, John D. 1992 Capitalist Development and Democracy. Chicago: University of Chicago Press.Google Scholar
Schneider, Ben Ross, and Soskice, David 2009 “Inequality in Developed Countries and Latin America: Coordinated, Liberal and Hierarchical Systems.” Economy and Society 38 (1): 17–52.CrossRefGoogle Scholar
Segura-Ubiergo, Alex 2007 The Political Economy of the Welfare State in Latin America: Globalization, Democracy, and Development. New York: Cambridge University Press.CrossRefGoogle Scholar
Solt, Frederick 2009 “Standardizing the World Income Inequality Database.” Social Science Quarterly 90 (2): 231–242.CrossRefGoogle Scholar
Spilimbergo, Antonio, Londoño, Juan Luis, and Székely, Miguel 1999 “Income Distribution, Factor Endowments, and Trade Openness.” Journal of Development Economics 59 (1): 77–101.CrossRefGoogle Scholar
UN Conference on Trade and Development 2009 Online Statistics Database. http://unctad.org/en/Pages/Statistics.aspx.Google Scholar
United Nations Development Program 1995 Human Development Report. New York: UN Development Program.Google Scholar
Welsch, Roy E., and Kuh, Edwin 1977 “Linear Regression Diagnostics.” Working Paper No. 173, March 1977, National Bureau of Economic Research, Cambridge, MA.CrossRefGoogle Scholar
Wibbels, Erik 2006 “Dependency Revisited: International Markets, Business Cycles, and Social Spending in the Developing World.” International Organization 60 (2): 433–468.CrossRefGoogle Scholar
Williamson, Oliver E. 1985 The Economic Institutions of Capitalism: Firms, Markets, Relational Contracting. New York: Free Press.Google Scholar
Woods, Adrian 1997 “Openness and Wage Inequality in Developing Countries: The Latin American Challenge to East Asian Conventional Wisdom.” World Bank Economic Review 11 (1): 33–57.CrossRefGoogle Scholar
World Bank 2011 “World Development Indicators.” http://www.worldbank.org/data.Google Scholar
World Institute for Development Economics Research 2008 World Income Inequality database. World Institute for Development Economics Research, United Nations University. http://www.wider.unu.edu.Google Scholar