Chapter 15 addresses economic inequality and its impact on democracy in contemporary Latin America. It illustrates the significance of inequality with discussions of Brazil and Chile, and shows that wealth and income are unequally distributed and that certain categories of citizens (rural dwellers, indigenous people, informal workers) are among the poorest Latin Americans. It stresses that it is paradoxical that several decades after Latin America achieved democracy – a political system based on the idea that citizens are political equals – social inequality remains deep and pervasive. Yet it accounts for the difficulty faced by democratic governments in reducing economic inequality through redistributive policies in terms of the structural and instrumental power of economic elites, the control of the media by economic elites, and the actions of politicians and state agents. The chapter also stresses that persistent economic inequality has negative consequences on democracy and shows how recent political developments in Chile – for decades seen as the poster child of political and economic success in the region – are a warning sign against complacency with economic inequality.

In this chapter, we study how the CPSU legacy affects the levels of income inequality in Russian regions. Equality is one of the key elements of the Communist ideology; yet after the collapse of the USSR former Communists were relatively successful in adjusting to the new market economy, which could make them less willing to support redistribution. Our analysis shows that, controlling for the differences in income per capita, the CPSU legacy is associated with lower levels of inequality. However, these differences are not driven by public redistribution or by charitable activity. We hypothesize that the effects of the CPSU legacy are connected to the development of informal networks in regional societies, which could serve as a redistribution device.