Political Crises, Social Conflict and Economic Development
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Political Crises, Social Conflict and Economic Development

The Political Economy of the Andean Region

Edited by Andrés Solimano

The contributors to this authoritative volume analyze the impact of political crises and social conflict on economic performance in the Andean region of Latin America.
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Chapter 3: Poverty, inequality and public policy in the Andean region: a comparative perspective

Amanda Glassman and Sudhanshu Handa


Amanda Glassman and Sudhanshu Handa* INTRODUCTION Using a comparative perspective, this chapter describes trends in poverty and inequality in the Andean countries, and examines the relationships between these factors and economic growth, growth volatility, labor markets, human capital formation, governance and political economy issues. A second brief section reviews patterns in public social spending and programs intended to deal with some of the effects of poverty and inequality. Finally, a concluding section summarizes the stylized facts and sets out unanswered questions and policy issues. The chapter is not intended to exhaustively review the literature in each area, which is significant, but rather seeks to present key stylized facts important to understanding the country case studies included in the rest of the volume. 3.1 POVERTY AND INEQUALITY Poverty In 2000, approximately 35 per cent of the Latin America region1 lived in poverty, defined as less than $2 per day.2,3 While showing great dispersion within the Andean subregion and within nations, the Andean countries display a slighly higher ratio than the regional average, with nearly 38 per cent of the population under the $2 per day poverty line (see Figure 3.1). In absolute terms, of total world poor, 1.5 per cent live in the Andean region, which represents approximately 20 per cent of the total poor in the Latin American region. At the regional level, the IDB estimates that the incidence of poverty has stagnated during the 1990s (see Annex 3.1 to this chapter). While the 45 Solimano 01...

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