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The Economies of Argentina and Brazil

The Economies of Argentina and Brazil

A Comparative Perspective

Edited by Werner Baer and David Fleischer

This book compares the successes and failures of the development and growth processes of Argentina and Brazil. It provides important insights into the different performances of these economies through a series of comparative essays written by Argentinian and Brazilian economists.

Chapter 12: Comments on Part IV

Adolfo Figueroa

Subjects: development studies, development economics, economics and finance, development economics


1 Adolfo Figueroa Chapters 10 and 11 are both descriptive. As their data base, both studies utilize the national household surveys conducted by the official statistical institutes. The periods covered are 1974–2006 for Argentina and 1992–2008 for Brazil. Both chapters present Gini coefficients for the period under examination, which indicate changes in the degree of inequality. The two chapters differ in the method of statistical analysis utilized. The Argentinean study analyzes inequality changes by examining the changes in the entire frequency distribution. The Brazilian study does it by using the method of decomposition of the Gini coefficient and by regression analysis. On decomposition, because the standard view is that the Gini coefficient is not meaningfully decomposable, this type of analysis is usually made using the Theil index; however, the author presents a theorem that justifies the use of this method of decomposition. The two chapters claim some empirical findings that can be summarized as follows. In Argentina, or more precisely in Greater Buenos Aires, inequality increased until 2003 and declined afterwards. An interesting empirical finding is that inequality is counter-cyclical: it increases in recessions and declines in recoveries; that is, inequality has declined in the recovery period of 2003–06. Another finding is that changes in Gini coefficients come mostly from shifts in the lower tail of the distribution, which implies that the poor have become a larger social group and more  homogeneous as well. We all know that the Gini coefficient is a summary measure and that...

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