Document 2847140

Alicia Bárcena
Executive Secretary
Antonio Prado
Deputy Executive Secretary
Luis Beccaria
Chief of the Social Statistics Unit in the
Statistics and Economic Projections
Susana Malchik
Documents and Publications Division
This document was prepared under the supervision of
Juan Carlos Feres, Chief of the Social Statistics Unit
in the Statistics and Economic Projections Division
of the Economic Commission for Latin America and
the Caribbean (ECLAC), and Marta Lagos, Director of
Latinobarómetro Corporation. They also participated in
the drafting of the document, together with Alejandro
Moreno and Pablo Villatoro. Contributions were made
to the work by Marcelo Miño and Patricio Olivera, and
valuable comments and suggestions were received
from Juan Pablo Corlazzoli, Martín Hopenhayn, Carlos
Huneeus, Ana López, Nieves Rico, Víctor Rico, Ana
María San Juan, Carlos Vergara and Daniel Zovatto.
The document was prepared using resources from the
regular budget of ECLAC and financing from the Spanish
International Cooperation Agency for Development
(AECID). ECLAC is grateful for the financial assistance
that made the preparation and publication of this
document possible.
This document has not undergone formal editorial revision.
LC/G.2419 • April 2010
© United Nations
Latin America in the mirror. Objective and subjective dimensions of social inequity and well-being in the region
Contents
Foreword
11
Introduction 13
Chapter I
Economy and perceptions of well-being 25
A. Preliminary concepts 25
B. Context: economic trends in Latin America 30
C. Perceptions of economic conditions
1. Growth and the level of concern about economic problems 2. Impact of social gaps 3. Evaluation of current economic conditions
4. Expectations about future economic conditions
D. Economic sentiment index 46
E. Employment insecurity and subjective income 56
1. Employment insecurity and unemployment 57
2. Subjective income and inflation 60
F. Economic optimism and pessimism 62
1. Optimism/pessimism by social gap 64
2. Optimism/pessimism by occupational type 69
G. Conclusions 72
34
35
38
40
44
5
Contents
Chapter II
Social gaps and perceptions of inequality 75
A. Preliminary concepts 75
B. Context: inequality and poverty trends in Latin America 77
C. Perceptions of distributive inequality and conflict between rich and poor 82
D. Ethnicity-based perceptions of discrimination and tension 96
E. Perceptions of gender equity and tension between men and women 105
F. Violence, perceptions of insecurity and social gaps 116
G. The financing of policies: facts and perceptions 125
H. Conclusions 136
Bibliography 143
Tables, figures and boxes
Table I.1
Concepts and variables used in chapter I
Table I.2
Latin America (1996-2008): impact of annual variation in
per capita gdp on the economic sentiment index,
ordinary least squares regression 49
Table I.3 Latin America (1996-2008): percentage of optimists and
pessimists in the economic sentiment index according
to social gaps in the countries 49
Table I.4 Latin America (1996-2008): impact of gdp on the economic
sentiment index according to social gap, ordinary least
squares regression Table I.5 Latin America (1996-2007): factor analysis: subjective
economic variables 63
Table II.1
Latin America (2000): infanta and child mortality rates 78
Table II.2 Actual and perceived tax burden Latin America, 2003, 2005 and 2007 130
Figure I.1
Latin America (1995-2008): economic performance 30
Figure I.2 Latin America (1995-2008): unemployment rate and annual
variation in CPI
31
Figure I.3 Latin America and the Caribbean (18 countries): variation in total
and food CPI in the 22 months to September 2008 32
Figure I.4 Latin America (1995-2008): main problem in the country 33
Figure I.5 Latin America (1995-2008): main problem in the country 34
Figure I.6 Latin America (1996-2008): economic problems and annual
variation in per capita GDP 36
Figure I.7 Countries with narrow social gaps (1996-2008): evaluation of the
country’s economy and variation in per capita GDP
6
28
50
41
Latin America in the mirror. Objective and subjective dimensions of social inequity and well-being in the region
Figure I.8
Countries with average social gaps (1996-2008): evaluation of the
country’s economy and variation in per capita GDP 42
Figure I.9 Countries with wide social gaps (1996-2008): evaluation of the
country’s economy and variation in per capita GDP 42
Figure I.10 Countries with narrow social gaps (1996-2008): economic
expectations and variation in per capita GDP 45
Figure I.11 Countries with average social gaps (1996-2008): economic
expectations and variation in per capita GDP 45
Figure I.12 Countries with wide social gaps (1996-2008): economic
expectations and variation in per capita GDP 46
Figure I.13 Latin America (1995-2008): correlation between economic
sentiment and GDP variation 48
Figure I.14 Latin America (1996-2008): economic sentiment index
and variation in per capita GDP
Figure I.15 Argentina (narrow gap), 1995-2008: economic sentiment
index and variation in per capita GDP 52
Figure I.16
Uruguay (narrow gap), 1995-2008: economic sentiment
index and variation in per capita GDP 53
Figure I.17 Colombia (average gap), 1996-2008: economic sentiment
index and variation in per capita GDP 54
Figure I.18
Mexico (average gap), 1996-2008: economic sentiment
index and variation in per capita GDP 54
Figure I.19
Plurinational State of Bolivia (wide gap), 1996-2008: economic
sentiment index and variation in per capita GDP 55
Figure I.20 Guatemala (wide gap), 1996-2008: economic sentiment index
and variation in per capita GDP 55
Figure I.21 Latin America (1996-2008): labour insecurity and unemployment rate 57
Figure I.22 Uruguay (1995-2008): labour insecurity and unemployment rate Figure I.23 Latin America (2000-2007): correlation between labour insecurity
and unemployment 58
Figure I.24 Latin America (1995-2008): perception that income
“is not enough” and total inflation
61
Figure I.25 Brazil (1995-2008): perception that income “is not enough”
and total inflation 61
Figure I.26 Latin America (2000-2007): correlation between perception
that income is “not enough” and inflation 62
Figure I.27
Latin America (1996-2008): economic sentiment index
by social gaps in the countries 65
Figure I.28
Countries with narrow social gaps (1996-2008): economic
sentiment index and variation in per capita GDP 65
Figure I.29 Countries with average social gaps (1996-2008): economic
sentiment index and variation in per capita GDP 66
51
58
7
Contents
Figure I.30 Countries with wide social gaps (1996-2008): economic
sentiment index and variation in per capita GDP 66
Figure I.31 Latin America (1996-2008): Position of countries as
regards attitudinal factors (optimism-pessimism) by social gap Figure I.32 Latin America (1996-2008): Relative position of types
of occupation in economic perceptual dimensions 69
Figure I.33
Latin America (1996-2008): relative position of the active
population in economic perceptual dimensions, by social gap 68
71
Figure II.1
Latin America and other regions (around 2007a): Gini coefficientb 76
Figure II.2
Latin America (1997-2007): inequality 76
Figure II.3
Latin America (1997 and 2007): poverty and indigence rates 78
Figure II.4 Latin America (1997-2007): indigencea among indigenous
or Afro-descendent populations and the rest of the population 79
Figure II.5 Latin America (2000): illiteracy ratea and average schooling
of the indigenous and non-indigenous population Figure II.6
Latin America (1997-2007): femininity indexa of poverty by country 80
Figure II.7
Latin America (1995-2007): economic participation ratea
of the urban population, by sex Figure II.8 Latin America (1997 and 2006): ratio of women’s to men’s urban wages 81
Figure II.9 Latin America (1997-2007): perceived fairness of income distribution
Figure II.10 Latin America (1997-2007): perceived fairness of income distribution
and self-placement on the poor-rich scale 84
Figure II.11 Latin America (2007): perceived fairness of income distribution and
self-placement on the poor-rich scale, by social gaps in the countriesa 85
Figure II.12 Latin America (1997-2007): proportion of people who view income
distribution as very unfair, by subjective assessment of income
position and social gaps in the countries 86
Figure II.13 Latin America (1997 and 2007): changes in the population who
think that income distribution is fair or very fair and Gini coefficients 88
Figure II.14 Latin America (1997-2007): proportion of people who view income
distribution as very unfaira, by subjective assessment of income
positionb and social gaps in the countries 91
Figure II.15 Latin America, Eastern Europe and Western Europe (2003-2007):
perceptions of tensiona between social groups 93
Figure II.16 Latin America (2007): perceptions of high tension between rich
and poor and the Gini coefficient 96
Figure II.17 Latin America (2001 and 2008): perception of the most discriminated
against social groups and ethnolinguistic fractionalization 98
Figure II.18 Latin America (2001 and 2008): perception of the most discriminated
against social groups by self-identification of ethnicity and
ethnolinguistic fractionalizationa
Figure II.19 Latin America (2008): perception of high tension between different
races and ethnic fractionalizationa of the country 102
8
80
81
a
83
100
Latin America in the mirror. Objective and subjective dimensions of social inequity and well-being in the region
Figure II.20 Latin America (2008): perception of high tension between different
races by self-identification of ethnicity and ethnic fractionalization
of the country 102
Figure II.21 Latin America (2008): perception of discrimination in the labour
market against non-white persons, by city size and ethnic
fractionalization of the country 103
Figure II.22 Latin America (2007 and 2008): perception of high tension between
different men and women, by sex and gender equity in the countriesa 107
Figure II.23 Latin America (2007): level of social isolation, by goods in the home,
sex and social gaps in the countries 109
Figure II.24 Latin America (2008): population that agrees with the statement that
“Women should work only when their partner does not earn enough”,
by sex and gender equity in the countries 110
Figure II.25 Latin America (2008): population that agrees with the statement that
“Women should work only when their partner does not earn enough”,
by goods in the home and gender equity in the countries, 110
Figure II.26 Latin America (2008): perception of discrimination against women in the
labour market, by schooling, sex and gender equity in the countries 112
Figure II.27 Latin America (1996-2006): percentage of the population who agree with
the statement that “Women have less opportunities to earn the same
wages as men”, by schooling,a sex and gender equity in the countries 114
Figure II.28 Latin America and other regions (around 2004): homicide ratesa 118
Figure II.29 Latin America (around 2000 and 2006): homicide rates and social
gaps in countries 119
Figure II.30 Latin America (around 2000 and 2006): homicide rates 119
Figure II.31 Latin America (2008): perceptions of violence and homicide rates 121
Figure II.32 Latin America (2008): perceptions of violence, by perceptions of
inter-group tension and social gaps in countries 121
Figure II.33 Latin America (1996-2008): victimization rates, by access to basic
servicesa and social gaps in countries 124
Figure II.34 Latin America (2007): perception of insecurity, by victimization,
city size and number of goods in the home 125
Figure II.35 Latin America and other regions and countries (around 2007):
level and composition of the tax burdena as a proportion of GDP 127
Figure II.36 Latin America and other countries (around 2007): total
government revenues 127
Figure II.37 Latin America (2003, 2005 and 2007): perceptions of the tax burden 129
Figure II.38 Latin America (2003 and 2007): real and perceiveda variations
in the tax burden 131
Figure II.39 Latin America (2003-2007): population who believes that taxes
are very high and percentage of non-tax fiscal incomea 132
Figure II.40 Latin America (2003-2007): variation in the population who believes
that taxes are very high and growth in per capita GDPa 133
9
Contents
Figure II.41 Latin America (2003-2007): population who believes that taxes are
very high and subjective income assessmenta 134
Figure II.42 Latin America (2003 and 2005): population who believes that taxes are
very high, by confidence in tax spending and social gaps in countries 135
Figure II.43 Latin America (1998 and 2004): reasons for not paying taxes,
by social gaps in countries 137
Box 1 Latinobarómetro
20
Box 2 Typology of countries according to size of social gap
22
Box I.1 Social gaps
30
Box I.2 Climates of opinion and the influence of the media 38
Box I.3
Measuring economic sentiment 47
Box II.1
Theories about social identity 94
Box II.2
Fractionalization or polarization? 104
Box II.3
Typology of countries based on gender gaps 115
10
Latin America in the mirror. Objective and subjective dimensions of social inequity and well-being in the region
Foreword
This book, “Latin America in the Mirror: Objective and Subjective Dimensions
of Social Inequity and Well‑Being in the Region,” was prepared jointly by the
Economic Commission for Latin America and the Caribbean (ECLAC) and
Latinobarómetro, with support from the Spanish International Cooperation
Agency for Development (AECID).
ECLAC pursues a development agenda that emphasizes the linkages and
synergies between economic growth, social equity, democratic consolidation
and environmental sustainability, taking into account the productive
transformation requirements that the countries of Latin America face in
order to integrate into the global economy.
In addition to these elements, in recent years there has been growing
concern about the social cohesion of the countries in the region. ECLAC has
been strongly pushing a broader agenda of development processes, through
which it has emphasized the need for institutions to make efforts to reduce
wide social gaps and promote a sense of belonging to the national community,
with full respect for diversity. This new agenda includes proposals by ECLAC
for building social pacts that promote social protection, with the understanding
that all citizens, men and women alike, are equal in rights.
The collaboration between ECLAC and Latinobarómetro has
helped create this broader vision. Traditionally, our organization has used
household surveys as data sources to analyse the dynamics of economic
and social development in the countries in the region. The relationship with
Latinobarómetro has enabled us to use information from opinion surveys,
11
Foreword
which adds to an understanding of the principal equity and social cohesion
challenges facing Latin America and the Caribbean.
This publication is the fruit of collaborative efforts between ECLAC and
Latinobarómetro and a contribution on the road to preparing a broader vision
of development processes. This book illustrates the efforts of both institutions
to build a joint vision with respect to the relationships between indicators
from household surveys and indicators generated from opinion studies. As
the reader will appreciate upon perusing the pages of this book, this exercise
was not without its complexities, owing to the lack of suitable conceptual
frameworks, the peculiarities associated with differences between the countries
and the methodological problems entailed in establishing relationships
between information that was not produced for these purposes.
This book seeks to contribute to the creation of a more comprehensive
understanding of objective living conditions and well‑being, a challenge the
cuts across the different regions of the planet. I am convinced that the lessons
obtained from this experience can be useful for similar efforts made in other
regions of the world.
Alicia Bárcena
Executive Secretary
Economic Commission
for Latin America
and the Caribbean (ECLAC)
12
Latin America in the mirror. Objective and subjective dimensions of social inequity and well-being in the region
Introduction
This book incorporates into ECLAC’s vision, which links economic growth
with social equity, a crucial aspect for public policies: the perceptions and
opinions of the people. Public policies, along with other factors such as
economic growth, can alter the objective circumstances of countries, but
also could shape the points of view that people have about these objective
circumstances. For example, the years of sustained economic growth that the
region experienced prior to the outbreak of the global economic crisis in 2008
bestowed favourable circumstances on most countries, a departure from the
prevailing conditions prior to that five-year economic boom. But did Latin
Americans perceive it as such? Did economic growth have a positive impact
on people’s perceptions? Did the closing of social gaps observed between
2003 and 2008 translate into a reduction in the perceptions of inequality and
social conflict?
This paper presents the main findings of an exercise placing objective
data, which reflect the social and economic conditions of the countries
of Latin America, in relation to subjective data that represent the public’s
perceptions about those conditions. It should be noted that the idea of linking
objective and subjective data is not new. In fact, it was proposed over 40 years
ago by Almond and Verba, when they conducted the first comparative study
of opinion in their book The Civic Culture. Thus, the main innovation of this
book lies in putting this idea into practice, as systematically as possible, in
a comparative analysis of the Latin American reality. It should be further
noted that much of this exercise is exploratory in nature, owing to the lack
of suitable theories and the limitations in terms of data that were collected
for purposes other than this study.
13
Introduction
Beyond its academic value, one of the practical purposes of this analysis
is to contribute to the development of a broader approach to the design
and evaluation of public policies that integrates objective and subjective
elements. Generally, there is an implicit assumption in public policies that
an improvement in the material living conditions of the population should
be reflected in higher levels of subjective well-being. At this point in time
for ECLAC, all elements of public opinion that could promote or impede
the negotiation of civic agreements and pacts to institute social protections,
which work to close the wide social gaps that affect the region’s countries,
assumes special importance. This paper provides information to answer
both questions.
In this study, the objective data on the countries that tend to be recorded
in the form of their national statistics, both economic and social, are accepted
as the parameter of the “state of things.” These are indicators that differentiate
the countries by their level of development, growth, social gaps (poverty
and inequality) and the degree of violence, to mention some expressions
of material reality. In contrast, the subjective data, which come from public
opinion surveys, represent the prevailing perceptions in the population about
that “state of things.” This is another perspective, from another series of
indicators, that has not generally been sufficiently considered in the design
and evaluation of public policies.
There is greater awareness among decision-makers nowadays that socioeconomic statistics should be complemented by public opinion. One example
of this is the recent creation by the French government of the Commission on
the Measurement of Economic Performance and Social Progress (see Stiglitz,
Sen and Fitoussi, 2009). This initiative is based on the premise that per capita
GDP is insufficient to measure levels of well-being in societies because once
certain material needs have been met, an increase in economic growth does
not necessarily generate equivalent increases in well-being (OECD, 2007).
With this in mind, information about the public’s perceptions, in conjunction
with economic statistics, can lead to a better understanding of well-being
phenomena in the population.
By linking objective and subjective data, we expect to find relationships
between the economy and perceptions of well-being. This is because, in
terms of meeting basic needs, the region’s countries are still far from the level
observed in the most developed countries, which suggests that the “ceiling
effect” detected for these countries (for more information, see OECD,
2007) may not take place in Latin America. In cases in which the relationship
between objective and subjective aspects is weak, the disconnection may be
explained by inequality factors. To test this, the analyses presented in this
book are largely guided by the concept of “social gaps,” which serve as an
14
Latin America in the mirror. Objective and subjective dimensions of social inequity and well-being in the region
indicator of the development disparity between countries and the extent of
poverty and distributive inequality within countries (see the explanation of
this concept and the measurement of social gaps below).
It is common to talk about income or opportunity inequality, but the
term “inequalities of opinions or perceptions”1 is rarely used. The analysis of
subjective data and their relationship with economic growth and even social
gaps reveals that the relationship between objective and subjective variables
appears to be mediated by the distribution of material well‑being between
and within countries. Chapter I of this book, which addresses the issue of
the economy, documents that the relationship between economic growth
and the public’s economic perceptions2 is stronger in countries where there
are fewer social gaps. This means the impact of growth on perceptions is
uneven. To use a medical metaphor, a country that substantially improves its
economy but whose population retains a certain level of pessimism is like
a patient whose physical conditions improve but whose spirits remain low.
Naturally, this does not mean that countries should implement policies just
to keep people in good spirits.
Chapter II, which analyses the perceptions of inequality and social
conflict associated with social class, gender and ethnicity, does not establish
a general hypothesis about the direct relationships between the objective
and subjective indicators. Instead, it puts forth the hypothesis, and provides
empirical evidence to support it, that social identities are a “bridge” variable
between the objective socio-economic structure (e.g., the size of the social
gaps in the respective countries) and the representations/schemes that
individuals construct about inequality. This means that policies to reduce
poverty and inequality must go beyond material transfers and become
initiatives for the symbolic inclusion of social identities that have traditionally
been devalued and discriminated against, with the redistribution of symbolic
goods such as dignity, recognition and opportunities for influence assuming
greater importance. Meanwhile, the broad field of perceived inequalities and
associated social cleavages demonstrates that the problem of inequality should
be approached from a multidimensional perspective that places the different
ingredients of inequality in relation to each other.
The following sections of this introductory chapter discuss some
epistemological dilemmas involved in the exercise of linking objective
and subjective data. The first has to do with the question of whether
1
2
ECLAC (2007) used the notion of pychosocial gaps to ilustrate the differences in perceptions and cognition
between different socio-economic groups of the population with respect to expectations relating to social
mobility, trust in institutions and perceptions of discrimination.
Economic sentiment is a term used by Latinobarómetro to summarize in one index information from three
economic perception indicators.
15
Introduction
perceptions necessarily reflect or are tied to a “reality.” In this case, our
exercise refers to various expressions of “reality,” with the mediation of
statistical data that we classify as objective and subjective. In any case,
the literature is replete with debates about the connection between the
objective and the subjective. We touch on some of these debates in the
next section, “Perceptions and realities.”
In the second section, we discuss the nature of the objective and
subjective data used in this book. It should be noted here that both types of
data have the potential to be highly reliable and valid. We will expand on this
discussion in the section titled “Objective and subjective data.”
In the third section, we briefly discuss the concept and measurement
of social gaps, a concept that is used throughout the book. These gaps are
a representation of the prevailing development levels and inequalities in
the countries of Latin America. This brief description is not meant to be
exhaustive with respect to the origin, measurement and meaning of the
concept, but these aspects should be plain enough for the rest of the book
to be read as clearly as possible.
The last section describes how the book is organized, the contents of
the chapters, and some of the general ideas that are discussed in each one.
Perceptions and realities
In his classic book Public Opinion, published in 1922, the American journalist
Walter Lippmann argued that there was a risk of political perceptions failing
to correspond with political realities because people did not have reliable,
accurate information about the latter and so could only create mental pictures
of the “world outside.” His thesis influenced much of the literature on public
opinion throughout the twentieth century, mainly in the United States. The
“pictures inside our heads,” Lippman said, are nothing more than reflections,
often disconnected, of what is happening around us, a type of “fiction.”3
For Lippman, the main fear concerning this disconnect was the potential
manipulation of opinion by experts to the degree that democracies would
not have a reliable “popular mandate” as a guide.
A growing literature states that public opinion, as a collective phenomenon,
does indeed reflect and even affects the objective realities that surround it
(Mueller, 1973; Page and Shapiro, 1992; Erikson, Mackuen and Stimson, 2002;
Althaus, 2003; Hutchings, 2003). Page and Shapiro (1992) argue for example
3
16
Originally, this epistemological argument was developed by British empiricists of the seventeenth and
eighteenth centuries, such as Berkeley and Hume.
Latin America in the mirror. Objective and subjective dimensions of social inequity and well-being in the region
that “opinions develop and change in a reasonable fashion, responding to
changing circumstances and to new information” (1992, p. 1). In this sentence,
circumstances represent the objective context, while information is that which
people are exposed to, mainly through media or interpersonal relationships,
and which they tend to use to create a mental picture of the circumstances.
This relatively recent literature in which public opinion is described as
a rational, intelligible, and even predictable phenomenon (Page and Shapiro,
1992) is not simply an open challenge to Lippman and his followers, but
rather a vitally important complement to that perspective. Public opinion
is a phenomenon that is closely tied to mass communication and largely
shaped by the information to which the public is exposed and consumes on
a daily basis (Zaller, 1992). However, people’s perceptions also reflect the
day-to-day environment in which they are immersed, especially when those
perceptions concern their economic situation, their degree of security or the
inequality they see around them. The relative position from which people
experience objective reality also has a bearing. For example, an Indian who has
experienced monsoons will have a different idea about what constitutes “a lot
of rain” than a Peruvian, for whom rain is an unusual event. This distinction
has a number of implications for interpreting public opinion data, inasmuch
as such data are not normative, will not refer to the same unit and must be
contextualized in order to be understood.
However, some perceptions can be more sensitive to media information
(for example, opinions about how the president of the country performed at a
recent international summit), and others can be more directly tied to personal
experiences (such as the degree of job‑loss insecurity or an assessment of
household economic situation). Zaller (1992) contends that opinions are a
link to information and predispositions, and we agree, but in some cases
life and day-to-day personal experiences also play a part. If a sample of
Argentines and Brazilians were asked their opinion on the war in Iraq, their
responses would very likely reflect information they have seen, read or heard
in the media, but also their predispositions towards the United States and
towards war more generally. If these same Argentines and Brazilians were
asked how they perceive the state of the national economy or the degree of
inequality between the rich and the poor in their country, independently of
recent information or their established beliefs, their responses would possibly
reflect their direct experiences with the environment. Accordingly, opinions
are influenced by new information and by already formed predispositions
and beliefs, but also by experiences in a given point in time.4
4
Daniel Yankelovich says that public opinion is formed in stages, which include how an issue comes to
be a matter of public opinion and how people go about creating a consensus vision of the issue. Public
opinion is a process to which people bring their baggage of values and experiences.
17
Introduction
In any event, the type of perceptions we analyse in this book are not
opinions on international affairs or political events, but rather perceptions
about the material and social conditions in which people live, in which the
relationship between objective and subjective data should be stronger. In our
analysis, the practical interest in looking for the correspondence between
objective and subjective indicators of the economy, inequality and social
conflict is to identify contexts or circumstances in which the correspondence
is weak, so effective public policies can be implemented that enhance the
connection. This will be the case in situations in which, for example, there is
no correspondence between improvements in material living conditions and
the perceptions of change in these conditions.
In our analysis, we find that when a country’s economy expands
(phenomenon observed through variations in GDP), the public expresses
greater optimism in their economic perceptions and sentiments. Conversely,
when a country’s economy shrinks, public opinion deteriorates or becomes
more pessimistic. Likewise, when the unemployment rate rises, as a general
rule people tend to become more insecure about their own employment status,
whereas drops in the unemployment rate are generally accompanied by a
decrease in employment insecurity. However, this is not always the case, and
one of our tasks in this book is to delineate patterns and groups of countries
and circumstances in which there is a more direct and close correspondence
between perceptions and objective data and those in which there is not.
In the analyses presented in this book, there are a number of
methodological aspects we have approached with the greatest care possible,
aware of the various limitations that an exploratory study such as this one
faces. However, the analyses are guided by a conviction that this first approach
to the relationship between objective and subjective data in Latin America
not only will lead to a better understanding of the region’s problems from the
perspective of its inhabitants, but also will enable us to identify theoretical
and conceptual elements for the development of a public opinion perspective
from and for Latin America, and in so doing lay a new foundation for the
formulation of public policies that take into account both objective and
subjection conditions.
Objective and subjective data
This book uses a number of indicators to describe the evolution of socioeconomic conditions in the countries of Latin America during the period
of study, between 1995 and 2008. The source for most of the indicators is
ECLAC, based on information published by the national governments, and
specific sources are identified for every analysis, table and figure.
18
Latin America in the mirror. Objective and subjective dimensions of social inequity and well-being in the region
One of the recurring questions that comes up when putting together tables
of objective data and subjective data is to what extent the former are “objective.”
The data for the inflation rate, the unemployment rate and the homicide rate are
used as indicators of the phenomena they represent, and except in some cases,
they tend to be widely accepted, given their validity and reliability. Although an
attitude of skepticism is very healthy in scientific matters, in this book the statistical
data referred to as objective are not called into question. Our purpose is to use
available data about economic and social phenomena to determine the degree to
which they are related to the subjective data for these phenomena.
As mentioned previously, there is a tendency to use the term “hard”
data to refer to these statistical data, which implies that the subjective data
might be a type of “soft,” or less reliable, data. However, data derived from
opinion studies can be as valid as statistical data. Moreover, this type of data
can complement statistical data and can even, in the case of some phenomena
such as public insecurity, fill in gaps caused by absence of reliable data, such
as the dark figure of crime (i.e., the discrepancy between crimes that occur
but are not reported and officially reported crimes). In other words, what
determines whether a piece of data is soft or hard is not the phenomenon
that is being measured, but rather how it is measured.
In the case of complementarity, an example are the objective and
subjective indicators of inflation, with the former measured by the variation
in the consumer price index (derived in many cases from surveys), and the
latter by the subjective income of individuals, an indicator derived from a
survey question that asks whether the respondent feels that his or her income
is sufficient or insufficient to meet his or her basic needs. As inflation rises,
we would expect to see an increase in perceptions of income as insufficient,
especially among the segments of society most sensitive to cost increases in
basic products. This topic is addressed is in the chapter on economy.
For the analyses presented in this book, indicators have been selected
that correspond to an economic and social reality and for which we have a
subjective counterpart. Chapter I makes extensive use of annual per capita
GDP variation, inflation and unemployment indicators. Chapter II used
indicators such as the Gini coefficient, income quintile ratios, absolute poverty
rates, ethnolinguistic fractionalization and others.
The subjective data are derived from surveys compiled by Latinobarómetro
in 18 countries between 1996 and 2008 (for more information on
Latinobarómetro, see box 1). In some cases, data from 1995 is incorporated
when it is possible to establish times series by country, because fewer countries
participated that year. However, for the analyses that group countries according
to the size of their social gap, only data from 1996 and after is used. In effect,
19
Introduction
some of the questions analysed in the book constitute uninterrupted time series
(as in chapter I), but others have only been asked in certain years so the analysis
is limited to the available information (as is frequently the case in chapter II).
The data derived from the Latinobarómetro surveys have already been
used in other ECLAC publications, so the subjective aspect of problems of
inequality and poverty in the region has already been covered. However, the
subjective data play a much more important role in this book, and the way
they are used in it is intended to produce preliminary findings and hypotheses
about their relationship with the corresponding objective indicators.
■■
Box 1
Latinobarómetro
The source of the public opinion data used in this study is Latinobarómetro,
which is the largest opinion barometer covering a region of the world after
Eurobarometer. This is a study of regional public opinion that began in 1995
and currently monitors 18 countries in Latin America. Between 1995 and 2008,
Latinobarómetro conducted 237,205 interviews of people in Latin America and
the Caribbean, i.e., nearly a quarter of a million interviews, which have allowed
people to express their opinions on various political, economic, societal and
cultural issues pertaining to development problems and challenges for the
countries in the region.
The national samples of the 18 countries that make up Latinobarómetro
represent more than 400 million inhabitants. The procedure used to obtain
the samples in the various countries consists of multistage and probabilistic
samples. In this way, national samples are obtained in each country that are
representative of the entire population of the country, with 1,000 to 1,200
interviews.
One of the biggest advantages of Latinobarómetro is the use of a
standardized questionnaire (which is not the case, for example, with the
household surveys administered in the different countries in the region),
which contains the same questions in the different countries, guaranteeing
the comparability of the information gathered from the questions.
Latinobarómetro has gathered information on approximately 1,000
public opinion variables, which can be classified as follows: a) questions
administered every year; b) questions administered by specific time intervals
(e.g., every two, three or four years); and c) cyclical questions. The frequency
with which information on the variables is collected is determined based on
the hypothesis and the existing empirical record indicating potential variability.
Thus, some variables do not need to be measured annually because they
change slowly, while other variables are very sensitive to the specific cycles of
the countries. This explains why there are complete series (13 years) for some
variables, while for others the available series cover fewer years.
In 2006, Latinobarómetro launched the first online public opinion databank
in Spanish (http://www.latinobarometro.org/) and the first of its kind outside
the English-speaking world.
Source: Latinobarómetro.
20
Latin America in the mirror. Objective and subjective dimensions of social inequity and well-being in the region
Concept and measurement of social gaps
In this book, the countries of Latin America are classified by the size of their
social gap. This is a key variable in the two thematic chapters so an explanation
of its meaning and measurement is needed. The social gap typology was
constructed with the following purposes:
•
To establish a frame of reference that would make it possible to rank the
countries according to objective levels of internal well-being, in order
to test hypotheses on the relationships between subjective and objective
indicators of well-being or conduct exploratory studies with some level
of conceptual plausibility.
•
To reduce the possible universe of comparisons, because a typology that
summarizes the situation of the countries based on social gaps precludes
the need to analyse a large number of indicators separately, and this
also protects against the error rate problem derived from the practice
of “fishing” (see Cook and Campbell, 1979), not an insignificant risk in
an exploratory exercise.
•
To establish a well‑being classification for the countries that goes beyond
averages and enables prevailing problems of equity and poverty in Latin
America to be matched with demoscopic indicators. This cannot be
done with an economic and social well-being measure such as per capita
GDP because per capita GDP is an average and does not capture the
distribution of well-being within a specific population; GDP growth
can increase well-being to different degrees, depending on the position
of individuals in the distribution pyramid, or can simply reach some
segments of the population and not others.
Social gaps refer to the socio-economic distances and deprivations in the
countries of Latin America and are expressed in the lack, for certain population
groups, of access to basic rights and opportunities to fully develop their potential.
The gaps can be: (1) absolute, or based on standards, where the criterion is a
normative definition (in this case, the impossibility of meeting basic food and
non-food needs) and (2) relative, or defined based on the differences between
groups, where the contrasting criterion is distribution (ECLAC, 2007).
The concept of social gaps used in this book goes beyond the notion
typically employed in many developed countries (especially the European
countries), which apply a concept of relative deprivation that leads to
classifications and cut-off points based exclusively on distribution. In Latin
America, both types of deprivation —relative and absolute— coexist and
overlap, so it makes good sense to implement an indicator that integrates both
dimensions of deprivation. As Atkinson and others (2005) indicate, adapting
to the context is key when selecting indicators.
21
Introduction
Social gaps are defined based on two indicators: (1) the percentage of
the population below the poverty line, which is called the “absolute gap”;
and (2) the income ratio between the richest and the poorest quintiles in
the distribution, which is called the “relative gap.” The data used for this
classification come from household surveys. In box 2, the procedures used
to build the typology are described in greater detail and the classification of
countries by size of social gap —narrow, average or wide— is presented.
■■
Box 2
Typology of countries according to size of social gap
In Latin America, the percentage of the population with income below the poverty
line differentiates the countries better than the indigence rate inasmuch as the
latter indicator assumes very low values in several countries. The indicator that
reports the ratio between the mean per capita income of the richest 20% of
households (5th quintile) and the mean per capita income of the poorest 20% of
households (1st quintile) is the best measure from a perspective of inter-group
distances than the Gini coefficient inasmuch as the latter indicator is a measure
of distributive concentration that is more sensitive to changes in the middle of the
distribution and less sensitive to variations at the extremes.
The procedure used to classify the countries consisted in a non-hierarchical
cluster analysis based on the percentage of the population below the poverty line
and the income quintile share ratio, using available data for 2007. The factor that
differentiated the countries the most was the poverty rate (p=0.000), even though
the income quintile share ratio was also statistically significant (p=0.010).
Latin America: typology of countries according
to size of social gap, around 2007
Country groups
Narrow social gap
Uruguay
Chile
Costa Rica
Argentina
Venezuela (Bolivarian Republic of)
Average social gap
Mexico
Panama
Peru
Brazil
Ecuador
El Salvador
Colombia
Dominican Republic
Wide social gap
Nicaragua
Paraguay
Guatemala
Bolivia (Plurinational State of)
Honduras
22
a
Simple average.
Percentage of population below
the poverty line
Income quintile
share ratio
20a
13.4a
18.1
13.7
18.6
21
28.5
10.3
15.7
14.8
15.5
10.6
38.9a
20.4a
31.7
29
39.3
30
42.6
47.5
46.8
44.5
14.8
18.9
17.2
25.9
15.8
16.3
27.8
26.4
60a
61.9
60.5
54.8
54
68.9
25.1a
18.6
19.1
23.9
31.5
32.5
Latin America in the mirror. Objective and subjective dimensions of social inequity and well-being in the region
Box 2 (concluded)
It should be noted that the average values for the poverty rates and income
quintile share ratios for the 1997-2007 period produces almost the same results
as the 2007 values, with the exception of Venezuela, which joins the countries
with average social gaps, and Panama, which moves to the group of countries
with narrow social gaps. The significance of the indicators is also supported:
the percentage of the population below the poverty line has a significance of
p=0.000, and the income quintile share ratio has a significance of p=0.046.
Source: Economic Commission for Latin America and the Caribbean (ECLAC), on the basis of the social cohesion indicators
database [online] http://websie.eclac.cl/sisgen/ConsultaIntegrada.asp?idAplicacion=6.
Organization of the book
This book is organized into four parts: this introduction, two longer thematic
chapters and a brief section of final considerations. Chapters I and II develop
the principal hypotheses, analyses and presentation of results in two thematic
areas that are central to the book: Chapter I analyses economic indicators
and their subjective counterparts, of economic well-being, and through
these seeks to establish the objective-subjective relationship of the economy.
Chapter II analyses inequality and social conflict indicators and their subjective
counterparts, in order to establish the objective-subjective relationships in
these thematic areas.
The purpose of both chapters is to conjoin tables of objective and
subjective data on the respective topics. Each chapter is organized in more
or less the same way: first, a number of objectives and hypotheses are stated,
followed by a description of the context of the objective conditions (whether
economic or related to inequality and conflict) in the region, and then the
relationships between the objective and subjective variables are analysed. In
chapter I, this means analysing the relationships between economic growth
and economic sentiment (which we refer to as the relationship between the
objective and the subjective economy), between the unemployment rate and
employment insecurity and between the inflation rate and subjective income,
and a comprehensive measure of economic sentiment is developed that
includes evaluations of the past, present and future economy. In addition,
this chapter analyses the impact of social gaps on these relationships and
incorporates analyses focused on differences of opinion according to the
social gaps in the countries (differences between countries) and occupational
segments (differences within countries).
Chapter I is guided by a general question (Do the economic expectations
and perceptions of Latin Americans reflect real or objective economic
conditions in their countries?). Its objectives are to determine the degree
23
Introduction
of association between the objective economy and the perceived economy,
to identify differences in the degree of association according to the size
of the social gaps in the countries, to analyse differences in economic
expectations according to the occupational strata of the respondents, to form
generalizations about the phenomena observed, albeit preliminarily, and to
derive public policy recommendations based on the findings.
Chapter II pulls together tables of objective and subjective data on
issues of inequality and social conflict. The dynamic of the analysis is, in
general, similar to that of the preceding chapter, with comparisons made at the
aggregate level (with general economic and social development indicators as
well as the country classification by size of social gap). In addition, the analysis
includes country-level explorations of the disparities between objective and
subjective indicators, in order to formulate, to the extent possible, hypotheses
that can be verified or confirmed in subsequent studies. In this chapter,
however, there are fewer time series for the subjective data, so the type of
analysis is not exactly the same as the analysis conducted in the chapter on
the economy.
Chapter II is also organized to first provide context through the
description of inequality and poverty trends in Latin America between 1996
and 2007. Next, there is an analysis and comparison of perceptions of
inequality and conflict related to social class, ethnic group and gender, followed
by a treatment of objective and subjective indicators of violence and insecurity
in the region. The chapter concludes with an analysis of the public policy
responses, with particular attention given to the obstacles in the countries
that make it hard to finance policies for equity and social well‑being.
In short, this publication provides information on the relationships
between the public’s perceptions of well‑being, inequality and social conflict
and the corresponding “objective counterparts,” such as economic growth,
inequality and poverty. The practical purpose of this exercise is to support
the public policies that are implemented in the region’s countries with inputs
that help build a more comprehensive vision of development problems.
24
Latin America in the mirror. Objective and subjective dimensions of social inequity and well-being in the region
Chapter I
Economy and perceptions of well-being
A. Preliminary concepts
This chapter is guided by a general question and several specific objectives.
The general question is as follows: Do the economic expectations and
perceptions of Latin Americans reflect real or objective economic
conditions in their countries? This question addresses the need to better
understand the correspondence in Latin America between the “subjective”
or perceived economy, i.e., the economy of popular opinion and
expectations, and the “objective” economy, which tends to be represented
by indicators such as variation in gross domestic product (GDP), inflation
and the unemployment rate.
The specific objectives of the chapter are to: (1) determine the degree of
association between various indicators of the “objective” economy and related
indicators derived from public opinion surveys. For example, does economic
growth create optimistic economic expectations in the population? To what
extent are the unemployment rate and job loss concerns related? What is the
relationship between inflation and subjective income, i.e., people’s perceptions
about whether they have enough income to meet their basic needs? (2)
identify differences in the degree of association between the “objective”
economy and the “subjective” economy based on the size of the social gap
in different countries. Is the relationship between the objective economy
and the subjective economy stronger in countries with a wider social gap or
in countries with a narrower social gap? What are the implications of these
differences? (3) analyse differences in economic expectations according to the
25
Chapter I
Economy and perceptions of well-being
occupational strata of the respondents. Which occupational segments tend to
have better economic expectations and to what extent do these expectations
vary by the size of the social gap? (4) generalize, to the extent possible, the
phenomena observed; and (5) recommend possible lines of action based on
the reported findings.
Although one objective of the book as a whole is to formulate public
policy recommendations, the findings of the research presented in this chapter
are preliminary, so their scope is still limited. This is a first attempt to explore
the objective and subjective dimensions of the economic phenomenon in Latin
America. However, the preliminary nature of the findings does not detract from
their importance. They are a potential contribution to the academic debate
and, above all, to the incorporation of social and perception indicators in the
formulation and evaluation of public policy in Latin America. Nevertheless,
we have limited ourselves in this chapter to reporting the findings as such,
within their own time period and context, not as premises or generalizations
that transcend the region, the period of study or the data used.
A review of the literature on this topic reveals that efforts to “conjoin”
objective and subjective data on the economy are not new. Several studies,
particularly in the United States and Europe, have produced results that
should be taken into account.
It was already being reported in the 1960s, for example, that the
consumer sentiment index responded to national economic conditions in the
United States (Katona, 1964) and that the index was even a good predictor
of future economic performance. In the 1970s, the observation was made
that when the public identified inflation or unemployment as a country’s
biggest problems, it was a faithful reflection of real variations in these
macroeconomic phenomena, which made it possible to analyse the “objective
and subjective costs” associated with inflation and unemployment (Hibbs,
1979). More recently, it has been shown that inflation and unemployment are
directly related to the public’s policy preferences: when the unemployment
rate rises, so too does popular demand for greater government economic
activity, whereas times of prosperity tend to produce inflation, which, in
turn, increases popular demand for greater governmental austerity (Erikson,
MacKuen and Stimson, 2004).
In addition to documenting the relationship between measures of
the objective and subjective economy, academic studies have analysed the
impact of economic expectations and perceptions on election results and
the level of support for governments (Kinder and Kiewiet, 1979; Kinder,
1981; MacKuen, 1983; Erikson, 1989; MacKuen, Erikson and Stimson, 1992;
Fiorina, 1981; Lipset, 1985; Powell and Whitten, 1993; Lewis-Beck, 1990).
26
Latin America in the mirror. Objective and subjective dimensions of social inequity and well-being in the region
Much of this literature distinguishes between the subjective judgments that
people make about economic conditions in their country and their evaluation
of their personal economic situation, separating two highly correlative but
clearly distinguishable planes of the subjective economy: the national and the
personal. The former are known as sociotropic considerations; the latter are
pocketbook considerations.
In Europe, economic growth (understood as a variation in GDP),
inflation and unemployment have been used as variables to explain popular
preferences related to regional economic integration (Gabel and Whitten,
1997). For its part, the relationship between popular opinion and public policy
has been studied extensively for several decades (e.g., see Weissberg, 1976;
Page and Shapiro, 1992; Althaus, 2003). For example, studies conducted in
Great Britain show that public spending has marked effects on the public’s
policy preferences (Soroka and Wlezien, 2005). The relationship between
objective economic indicators and subjective well-being indicators has even
been illustrated in the realm of values. Ronald Inglehart documents, for
example, that in Europe the percentage of the population with post-materialist
values fluctuates over time as inflation rates fluctuate (Inglehart, 1990, 1997).
In addition, data from the World Values Survey show that economic growth
and intergenerational value change are closely linked: the distances between
the values of the younger and older generations are largest in societies that
have experienced rapid economic growth (Inglehart, 1997).
Despite extensive research documenting the relationship between
objective and subjective indicators of the economy, information about
societies with emerging economies or new democracies, if not nonexistent, is
much more scarce. A study based on the East German experience finds that
popular opinion about the economy in a context of “system change” is subject
to a learning process. This means “citizens in new market economies are
relative novices with regard to understanding the new economic environment
at the beginning of the transition phase, but that they accumulate experience
as time passes” (Anderson and O’Connor, 2000, p. 147). In Latin America,
some attempts have been made to establish the relationship between
economic crisis and subjective well‑being using data from Latinobarómetro
(see Graham and Sukhtankar, 2004), but the absence of objective variables
in the analysis confirms the growing need to “conjoin” objective data and
data on perceptions.
The analysis provided in this book, in which tables of objective and
subjective economic indicators from Latin America are conjoined, is a first
step towards remedying the lack of studies on this topic and methodology.
As mentioned previously, the task is not only to find the links between the
objective economy and the subjective economy, but also to inject the findings
27
Chapter I
Economy and perceptions of well-being
into a debate in the service of equity and social cohesion. Accordingly,
this chapter emphasizes not only the relationship between the objective
economy and the perceived economy, but also the strength or weakness of
this relationship depending on the size of the social gaps in the countries,
as well as the difference between occupational sectors within the countries.
The reported findings will help elucidate the objective‑subjective relationship
in accordance with different levels of economic development and social
inequality. This is not meant to be an exhaustive or entirely conclusive analysis,
but rather a sufficiently convincing one, based on the available data, in order
to begin building a new body of empirical evidence from Latin America.
We use several concepts and variables in this chapter that warrant
mention from the start so the reader has the clearest possible understanding of
what we mean by them, how they are measured, and their scope of application
and limitations. In the analysis presented throughout this chapter, we use the
following concepts and their empirical representation based on questions from
the Latinobarómetro survey and “hard” data on the economy:
■■
Table I.1
Concepts and variables used in chapter I
Objective economy:
Growth.- We are referring to economic growth, as represented by the annual
variation in per capita GDP.
Subjective economy:
Economic concerns.- The percentage of respondents who
identify problems of an economic nature as the country’s
main problem, such as inflation, unemployment, the economic
crisis, etc.
Economic expectations.- Popular perceptions about the future
economic state of the country.
Economic sentiments.- A composite indicator of perceptions
that includes the different perceptions of the economy with
respect to the past (compared with the previous 12 months),
present (current) and future (expectations for the next 12
months).
Other terms we use at times in reference to subjective variables
are: economic evaluations, economic optimism, and economic
judgments, but the core concepts of the chapter are the ones
explained above.
Unemployment.- We are referring to the urban unemployment rate.
Employment insecurity.- The percentage of people who report
that they are concerned about losing their job in the next several
months.
Inflation.- We are referring to the increase in prices, as represented by the
annual variation in the consumer price index (CPI).
Subjective income.- The net percentage of people who report
that they do not have enough income to make basic household
purchases.
Source: Latinobarómetro.
The objective data we cite are by country and by year, but we also use the
corresponding regional averages by year and for the entire period of study.
The primary source of this data is ECLAC unless otherwise indicated in the
analysis, figures and tables.
28
Latin America in the mirror. Objective and subjective dimensions of social inequity and well-being in the region
The specific questions that enable us to prepare the subjective indicators
are explained in the corresponding section of the chapter. As with the objective
data, the subjective data are by year and country and are also aggregated
regionally and temporally. Latinobarómetro 1996-2008 is the source of these
data, which are analysed at the country level, aggregated at the regional level
for the 18 countries or analysed by group of countries according to social
gap. In some countries, the survey began in 1995, so data are presented only
for these countries when the analysis is by individual country, as opposed
to groups of countries. Because the survey was not conducted in 1999, we
extrapolate data for that year based on an arithmetic mean of the previous
year and the subsequent year, simply to provide continuity for the graphic
presentation of the data. This does not mean that the average is an accurate
reflection of what happened that year.
Our initial working hypotheses are as follows:
1. There is a significant relationship between the subjective economy and
objective economic conditions.
2. The relationship between the subjective economy and the objective
economy varies depending on the size of the social gap in the countries.
3. The relationship between the objective economy and the subjective
economy is stronger in countries with narrow social gaps.
4. Economic sentiments vary by occupational strata. The higher the relative
position in the occupational structure, the greater the economic optimism
will be.
From these general hypotheses, we derive other more specific hypotheses
in each section of the chapter, which is organized as follows: The second
section briefly describes the economic context of Latin America between 1996
and 2008, for an understanding of the evolution of the regional economy and
the individual countries during this period. In the third section, we analyse
perceptions of the overall economic situation, probing the perceptions
of economic problems and the past, present and future components of
economic perceptions. In this section, the variable representing the objective
economy is economic growth. The fourth section analyses a composite index
of economic sentiments. In the fifth section, we focus on the relationship
between the unemployment rate and a subjective indicator of job insecurity.
In the fifth section, we analyse inflation and subjective income. The sixth
section covers economic optimism-pessimism and analyses differences by
social gap and occupation type. The seventh and final section presents the
general conclusions of the chapter.
29
Chapter I
Economy and perceptions of well-being
Box I.1
■■
Social gaps
The introduction to this book explains this concept and the measurement of
social gaps that has been developed by ECLAC and used in this analysis.
Because the concept is mentioned repeatedly in this chapter, for the reader’s
reference, the following is the list of countries grouped by the size of their
social gap: narrow, average or wide.
Narrow social gap: Chile, Uruguay, Costa Rica, Argentina, Bolivarian
Republic of Venezuela
Average social gap: Panama, Brazil, Mexico, Peru, Ecuador, Dominican
Republic, Colombia, El Salvador
Wide social gap: Plurinational State of Bolivia, Guatemala, Paraguay,
Nicaragua, Honduras
Source: Economic Commission for Latin America and the Caribbean (ECLAC).
B. Context: economic trends in Latin America
Latin America’s economy performed strongly between 2003 and 2008,
averaging per capita GDP growth of 3.5% during this period.1 Growth topped
8% in Argentina and Peru in 2005 and 2008, respectively, and was at least
9% in the Dominican Republic and Panama in 2006 and 2007, respectively.
Other countries logged growth in excess of 10%. Uruguay’s economic
growth surpassed 11% in 2004 and 2008, and Venezuela grew by more than
16% in 2004. In general, per capita GDP in the region rose by more than
3% annually for six consecutive years, an unprecedented performance in the
past 40 years (see figure I.1).
■■
Figure I.1
Latin America (1995-2008): economic performance
8
7
6
4.7
5
3.8
4
3
4.3
2.5
2.0
4.3
3.5
3.3
2
1
0.9
0.9
0
-1
-2
- 1.0
- 1.2
- 1.2
- 1.7
-3
2008
2007
2006
2005
2004
2003
2002
2001
2000
1999
1998
1997
1996
1995
-4
Source: Economic Commission for Latin America and the Caribbean (ECLAC), on the basis of official information from the countries.
Note: Economic performance is measured as the annual average variation in per capita GDP.
1
30
This includes the 18 countries participating in the Latinobarómetro surveys.
Latin America in the mirror. Objective and subjective dimensions of social inequity and well-being in the region
However, this period of sustained growth entered a contractionary
phase when the global economic crisis hit in the second half of 2008. As the
Latinobarómetro report from that year noted, prior to the global financial crisis,
“the economic boom in the region took place in a context of three simultaneous
external factors: a significant jump in the price of commodities in general, but most
notably in the price of hydrocarbons and metals and minerals; a sharp increase in
remittances from emigrant workers to countries in the region; and very favourable
external financing conditions with abundantly available liquidity and low interest
rates in foreign markets” (Latinobarómetro Corporation, 2008).
During the 2003-2007 period, the economic expansion brought with it an
increase in jobs in the region, and as a result, a reduction in the unemployment
rate, as shown in figure I.2. Annual variations in the consumer price index
(CPI) were quite favourable, with relatively low inflation for the region as
a whole between 2003 and 2007. This changed in 2008 when the average
variation in the CPI soared nearly 11%. In most Latin American countries, the
highest inflation rate was seen in the CPI for food,2 as shown in figure I.3.
In a simulation conducted by ECLAC (2008), rising food prices in 2007
prevented approximately four million people from escaping from poverty and
indigence. This effect was even more pronounced in 2008, because the cumulative
increase in food costs since late 2006 swelled the number of poor and indigent
people by 11 million, compared with the number that would have been in this
situation if food costs had risen at the same rate as those of other goods.
■■
Figure I.2
Latin America (1995-2008): unemployment rate and annual variation in CPI
25
21.6
20
19.2
15
13.3
10
10.0
9.9
11.4
9.3
10.3
11.0
9.7
11.9
10.2
11
10.4
10.0
7.6
5
11
8.1
10.8
10.3
9.1
8.6
7.9
6.6
6.3
6.8
2005
2006
2007
9.0
7.5
0
1995
1996
1997
1998
1999
2000
2001
Unemployment rate
2002
2003
2004
2008
Variation CPI
Source: Economic Commission for Latin America and the Caribbean (ECLAC), on the basis of Economic Indicators and
Statistics Database (BADECON), http://www.eclac.cl/estadisticas/bases/.
Note: The unemployment rate and the CPI are measured in average annual rates.
2
Variation in the general CPI indicates changes in the price of all products included in the basic basket.
Variation in the CPI for food indicates changes in the price of foods included in the basic basket.
31
Chapter I
Economy and perceptions of well-being
Figure I.3
■■
Latin America and the Caribbean (18 countries): variation in total
and food CPI in the 22 months to September 2008
8
Mexico
12
9
Brazil
21
9
Peru
15
12
El Salvador
18
12
Ecuador
24
13
Paraguay
19
13
Colombia
21
15
Panama
23
15
13
16
Argentina
Chile
29
17
Uruguay
31
19
Guatemala
25
20
Honduras
28
21
22
22
Dominican Republic
Haiti
29
24
Costa Rica
35
24
Bolivia (Plur. State of)
44
33
Nicaragua
47
51
Venezuela (Bol. Rep. of)
0
10
20
30
Total IPC
40
50
73
60
70
80
Foods’ IPC
Source: Economic Commission for Latin America and the Caribbean (ECLAC). Social Panorama of Latin America 2008.
Note: the values of both total and food CPI refer to the percentage variation in the period.
The most recent edition of the Economic Survey of Latin America and the
Caribbean (ECLAC, 2009) states that owing to the interruption of “a growth
phase whose nature and duration is unequalled in the region’s recent history
[…] the region’s output is contracting. The toll this state of affairs is taking
on the well-being of the population will inevitably be reflected in setbacks in
social variables.” However, the same study argues that the period of strong
economic performance helped several countries lower their debts and build
their reserves, so “the present crisis finds the region much better prepared
than in the past and than other regions.”
32
Latin America in the mirror. Objective and subjective dimensions of social inequity and well-being in the region
The impact of the drop in the unemployment rate led to a reordering of
the priority problems, as illustrated by the 2008 Latinobarómetro data. The
percentage identifying unemployment as the biggest problem fell from 30%
to 15% between 2005 and 2008, whereas the percentage identifying crime
rose from 9% to 17% in the same period (see figure I.4). For the first time
in 13 years of polling, unemployment was no longer identified as the biggest
problem, if the categories are viewed separately.
However, problems of an economic nature as a whole (unemployment,
inflation, crisis, etc.) have remained the top concern of Latin Americans, ahead
of problems that fall under the general category of “crime” (see figure I.5).
Between 2007 and 2008, the percentage of Latin Americans who identified an
economic problem as their country’s biggest problem rose from 34% to 41%.
Given the global financial crisis unleashed over the past year, the percentage
of respondents identifying economic problems as the most pressing concern
is likely to climb even higher in 2009.
The 2009 climate of opinion in Latin America surely has been influenced
by a more or less widespread sense of economic insecurity. The central theme
of personal experiences and public discourse alike has been the state of the
global economy and its effects on national economies.
Figure I.4
■■
Latin America (1995-2008): main problem in the country
Q: In your opinion, what is the country’s biggest problem?
40
29
30
23
21
20
19
20
21
21
23
30
29
25
24
21
18
14
10
10
5
0
1995
9
10
10
2002
2003
2004
7
1996
4
3
4
4
1997
1998
1999
2000
2001
Unemployment
2005
17
17
2006
2007
15
2008
Crime
Source: Latinobarómetro, 1995-2008.
Note: the question asked from 1995 to 2003 was: “Of the list of problems on this list, which do you consider to be the worst?”
The list was modified in 1995-1996, 1997-2000, and 2001-2003 periods. As of 2004, an open question was asked: “In your
opinion, what is the country’s biggest problem?”
33
Chapter I
Economy and perceptions of well-being
■■
Figure I.5
Latin America (1995-2008): main problem in the country
Q: In your opinion, what is the country’s biggest problem?
70
50
47
53
53
54
44
41
47
48
46
42
40
41
35
34
17
17
2007
50
2006
60
30
3
4
4
10
9
10
2003
4
2002
7
14
2001
5
2000
10
1999
20
21
10
The economy
2008
2005
2004
1998
1997
1996
1995
0
Crime
Source: Latinobarómetro, 1995-2008.
C. Perceptions of economic conditions
The objective economy and the perceived economy are, indeed, related. The
question is: To what extent do subjective perceptions of the economy reflect
objective economic conditions in Latin America? What differences can be
observed based on the countries, their economic and social conditions and
their historical and cultural trajectories?
Statistics illuminate the relationship between variables but not the
direction of that relationship, so when we observe the relationship between
optimism or pessimism and economic growth, we do not know whether the
growth precedes the behavior or is merely taking a snapshot of something
that has already happened. Nevertheless, throughout this chapter, the reader
will note that we tend to refer to the “impact” of the objective economy
on the subjective economy. Although we do not intend to establish that the
objective has a causal effect on the subjective in every case, the use of the
term “impact” is often much stronger and more illustrative than a simple
reference to a “relationship,” even though it may well be beyond our capacity
to demonstrate that this is the actual causal direction.
Comparative opinion indicators in Latin America are relatively new,
having been in use for just a decade and a half. Europe is the only region
that has compiled data for 40 years. Latin America has gathered data for 14
years, and the other regions have been compiling data for 10 years or less.
34
Latin America in the mirror. Objective and subjective dimensions of social inequity and well-being in the region
Thus, this crisis offers a unique opportunity not only to study the relationship
between subjective and objective indicators but also to conduct a comparison
with the Asian crisis and try to elucidate the meaning and magnitude of the
relationship between the phenomena.
This section analyses the relationship between economic growth and
several indicators of economic perception: the level of concern about
economic problems or the degree to which they are emphasized; evaluations
of current economic conditions; expectations about future economic
conditions; and an analysis of a composite indicator of perceptions about
the past, present and future economy.
1.
Growth and the level of concern about economic problems
This section reviews the subjective and objective indicators of economic
conditions, starting with the most basic of all, the degree of public concern
about the economy in a given moment (i.e., the predominance of economic
problems over all others).
To this end, the following question is analysed: “In your opinion, what
is the biggest problem in the country?” This question first appeared in 1995
with a closed list but thereafter was posed as an open question because the
responses precluded a single list from being used from one year to the next.
This means, in first place, that the composition of “economic problems”
changes over time in terms of both the importance of each component item
and the number of items. What is important is for the question to allow this
category to be aggregated over time for analysis. For this analysis, questions
of an economic nature, such as inflation or cost increases, unemployment and
low wages or financial problems, were grouped into a single category that we
call “economic problems.”3 (see figure I.5 in the previous section).
Figure I.6 shows two indicators of the economy. One is subjective (the
percentage of people in Latin America who indicate “economic problems”
as their country’s main problem), and the other is objective (annual variation
in per capita GDP, as a regional average). Economic problems ranged from a
high of 54% in 2000 to a low of 34% in 2007. On average, the percentage of
people who identified economic problems as their country’s biggest problem
was 45% for the 1995-2008 period. This means that nearly half of the people
in the region stated economic problems in the 13 years of study.
3
The complete list of problems in the surveys from 1995 to 2008 includes: inflation, low wages, health, education,
unemployment, housing, corruption, terrorism, crime, public security, opportunities for youth, poverty, the
environment, drugs, drug trafficking, transportation, terrorism, political violence, guerrilla activity, job instability,
human rights violations, racial discrimination, the economy, financial problems, income distribution, social
injustice, border problems, natural gas, fuel, political crises and deficient basic services.
35
Chapter I
Economy and perceptions of well-being
Figure I.6
■■
Latin America (1996-2008): economic problems and annual variation in per capita GDP
Q: In your opinion, what is the country’s biggest problem?
100
8
Annual variation in per capita GDP
4.7
3.8
4
2
0
80
4.3
4.3
3.5
3.3
2.5
2
50
41
53
54
44
47
0.9
48
50
46
42
-1
-1.2
-2
60
54
0.9
70
41
35
-1.7
40
30
34
20
-4
Percentage citing main problem economic
90
6
10
r = -0.48
-6
Per capita GDP (annual average variation)
2008
2007
2006
2005
2004
2003
2002
2001
2000
1999
1998
1997
1996
0
Economic problems
Note: economic problems were considered to include inflation, price rises, law wages, unemployment or job instability and
economic or financial problems
The percentage of people identifying economic concerns as the main
problem increased between 1996 and 2000. In 2001 it started to drop, although
there was a slight uptick in 2002 and 2003, and reached its lowest point in
2007. This coincides with business cycles in the region during those years.
This subjective indicator shows that in years of less economic growth,
people had much greater economic concerns, whereas in years of more
economic growth, people had fewer economic concerns. The expectation is
that these two variables are inversely related: as economic growth accelerates,
the public’s economic concerns lessen. The simple correlation for the years
observed confirms an empirical inverse relationship, in this case of –0.48
for the region as a whole from 1996 to 2008. Taking the average for all the
countries, higher growth reduces the public’s economic concerns.
Nevertheless, the impact of growth in terms of reducing the public’s
economic concerns varies greatly by country. Countries in which growth
had the greatest impact during the period of study were Costa Rica, with
a correlation of –0.64, followed by Uruguay (–0.59), Peru (–0.58), Chile
(–0.53) and Mexico (–0.49). Three of these five countries are categorized
as countries with narrow social gaps (Costa Rica and Uruguay). In contrast,
there are countries in which growth does not have much of an impact on
reducing the public’s economic concerns, as in Colombia (–0.02), Panama
(–0.03), Guatemala (–0.05) and Paraguay (–0.09) (two of which—Guatemala
and Paraguay—are categorized as countries with wide social gaps).
36
Latin America in the mirror. Objective and subjective dimensions of social inequity and well-being in the region
It is noteworthy that the average variation in the year-on-year growth
rate for the first set of countries is double the variation observed in the
second set (14.5 vs. 7.4). This means that in the countries in which economic
concerns and the growth rate were more strongly correlated, the economy
was more volatile.
These findings also seem to suggest that the size of the social gap
might be a factor in the relationship between the objective economy and
the subjective economy. The association between growth and the level of
concern about economic problems appears to be stronger in countries with
narrow social gaps.
Countries with narrow social gaps have higher per capita GDP than
those with wide social gaps. The year-on-year average for 1995-2008 was
US$ 4,887.40 vs. US$ 2,389.00 for these groups of countries, respectively,
so the relationship between growth and economic concerns does appear to
be mediated to a certain extent by the level of development. As per capita
GDP rises, the impact of growth in terms of reducing economic concerns
becomes stronger.
These findings show how the structure of opinion responds to an
economic structure. The inverse relationship observed in the region between
the two indicators confirms the general hypothesis, that is, when the region
experiences economic growth, the public’s economic concerns ease, and
when the economy takes a turn for the worse, economic concerns mount.
However, this relationship is mediated by the level of per capita GDP and,
thus, by the size of the social gap.
The seemingly obvious relationship between the objective economy and
the subjective economy had not been documented over time or comparatively
as presented here. However, there are significant exceptions to this obvious
relationship because it only occurs at a certain level of per capita GDP.
Be that as it may, this should not be taken to mean that the volatility of the
economy has a negative effect on the perception of economic problems, since,
in general it is precisely those countries with the highest levels of variability that
enjoyed the best economic performance between 1996 and 2008.
The structure of the subjective data is consistent with the behavior of
the objective data. These are relative positions of subjective indicators that
reflect the distance from the objective indicators in an aggregate form. In
effect, concern about economic problems summarizes in a single indicator
the reflection of: (1) variation in growth and (2) level of per capita GDP.
In addition, unemployment could be expected to influence economic
concerns, inasmuch as contractions in GDP usually mean higher unemployment,
which is the means by which the direct effects of a crisis are propagated,
37
Chapter I
Economy and perceptions of well-being
especially in the absence of inflation, as with the financial crisis of 2008 and
2009. Under different circumstances, economic concerns could be more heavily
influenced by other factors, such as media coverage, for example. We will return
to the topic of unemployment later in the chapter.
■■
Box I.2
Climates of opinion and the influence of the media
Climates of opinion as a social phenomenon have been studied in depth by
Elizabeth Noelle Neumann (see Noelle-Neumann, 1995; Noelle-Neumann and
Petersen, 2005) as determinants of behavior. These concepts have not yet
been incorporated into the public policy considerations of the States, although
they have been used successfully in elections, especially in developed
countries. Climates of opinion are what most determine behavior, explaining
electoral victories and defeats. This economic crisis, triggered by the 2008
collapse of Lehman Brothers, has produced a global climate of opinion about
the economy in which confidence, stability and optimism are important
variables and determinants of the economy. Restoring confidence and
optimism is indicated as central to economic recovery. Indicators that help
elucidate the relationship between these determinants of economic behavior
and their impact on the objective economy can contribute to the design of
public policies that lead to climates of opinion conducive to development, as
well as help avoid negative climates, introducing a new dimension in the future
development of public policies.
In addition to individual direct experiences with the prevailing economic
conditions, the literature on public opinion has extensively documented that
economic perceptions can be influenced by media coverage. Iyengar and
Kinder (1987) show, for example, that in the United States an increase in
the number of stories on inflation or unemployment on television causes the
percentage of people reporting inflation or unemployment as their country’s
biggest problem to rise. These phenomena have to do with the effects of
agenda‑setting and priming.
Source: Latinobarómetro.
2.
Impact of social gaps
The relationship between economic growth and economic concerns is
mediated by the size of the social gap in the countries. The data reveal a
difference in economic growth rates that differently impacts the relationship
with economic problems. Economic problems were reported more often
in the countries with narrow social gaps, which posted negative growth of
-2.4% between 2001 and 2003, than in the countries with an average or wide
social gap, which had nearly zero, but not negative, growth of 0.8 and 0.1 in
those years, respectively.
38
Latin America in the mirror. Objective and subjective dimensions of social inequity and well-being in the region
In countries with narrow social gaps, such as Argentina and Uruguay,
the widening of the social gap caused by the crisis amplified the impact of
the drop in growth. In other words, the crisis could be thought to impact
—or heighten the importance of— perceptions of economic problems in
countries or social segments with a memory of a better past (as in the case
of Argentina and Uruguay). In those countries, the drop in growth causes
a real deterioration in the economic position of significant segments of the
population. In contrast, in countries where inequality and poverty have been
the norm and there is no better living standard with which to compare, the
same impact is not in evidence, or it is less. In those countries, the perception
of problems in many segments of the population often cannot transcend
what has happened historically, and the better-off segments of the population
whose economic position deteriorates are not a large enough group to impact
the national average.
A collapse in growth rates is usually accompanied by sharp increases
in poverty and inequality. For example, Argentina and Uruguay experienced
brutal declines in GDP growth in 2001 and 2002 (GDP plummeted 11% in
the two countries in 2002), and poverty in Argentina correspondingly climbed
to 45.4% in 2002 from 23.7% in 1999. In Uruguay, poverty rose from 9.4% in
1999 to 15% in 2002. In both cases, the deterioration in subjective indicators
can basically be explained by the massive impoverishment of the middle class,
or to put it another way, by the descent into poverty of a substantial portion
of the population with, as previously mentioned, a memory of a better life.
It is not only negative growth that has an impact on the countries with
narrow social gaps, but also the magnitude of that growth. In the 1995-2000
period, growth in the countries with narrow social gaps was comparatively slower
than in the other two groups, and the percentage of people who identified the
economy as the main problem was markedly higher. The magnitude of growth
had a stronger impact on the countries with higher per capita GDP in the period
up to 2000, when growth was moderate and slow.
In contrast, when growth began to rise sustainably and much more
appreciably in 2005, economic problems diminished in all of the countries
regardless of the size of the social gap. In the countries with narrow social
gaps, average annual growth of per capita GDP was 6.4, compared to 5.0
and 3.1 in the countries with average and wide social gaps, for the 2005-2008
period. In the countries with narrow social gaps, the correlation between
these two variables (economic growth and concerns) for the period of study
(1995-2008) was –0.67, the strong correlation among the three groups of
countries. In the countries with average and wide social gaps, the correlations
were –0.5 and –0.53, respectively. In all three cases, the correlation is negative
39
Chapter I
Economy and perceptions of well-being
and significant, which confirms that in general, economic growth is associated
with a drop in the percentage of people expressing economic concerns. These
correlations further indicate that growth has a stronger positive impact on
the reduction of economic problems in countries with narrower social gaps.
The wider a country’s social gap, the less impact that growth will have on
economic problems.
The relationship between economic growth and the perception of
economic problems reflects the economic structure and the magnitude of
change in per capita GDP. The law of large numbers makes it possible to
establish basic relationships between these variables, which are useful for
the regional averages and do nothing more than document widely known
assumptions. These data also reveal less obvious relationships, such as how
the level of GDP and the size of the social gap determine the impact that
economic growth has on alleviating the economic problems of a population.
Counterintuitively, the lower the GDP and the wider the social gap, the
less impact that economic growth has on the economic concerns of the
populace. It is at a certain level of GDP and size of social gap that growth
begins to have a more significant impact on reducing economic problems.
In other words, the structural problems of countries with low per capita
GDP and wide social gaps are not resolved by economic growth. This is
empirical evidence of an old debate that has been tinged by ideological
judgments, which these data are dispelling.
3.
Evaluation of current economic conditions
What is the relationship between economic growth and evaluations of
current economic conditions in a country? To answer this question, we took
the 1995-2008 Latinobarómetro question concerning the evaluation of the
current economic situation: “In general, how would you describe the country’s
present economic situation? Would you say that it is …? Very good, good,
average, bad or very bad.”
Figures I.7, I.8 and I.9 correspond to the countries with narrow, average
and wide social gaps, respectively, and represent the evolution of per capita
GDP, expressed as annual averages, for the period 1996-2008, as well as the
net percentage of evaluations of the current economy.4 These figures use
two types of scales: the scale on the left represents the annual variation in
4
40
The net percentage derived from the surveys for this indicator is based on the total number of people
who describe the economic situation as very good, good or fair, minus the percentage of people who
describe it as poor or very poor. At first, the net percentage of very good or good responses minus the
very poor or poor responses was also analysed, but the ratio turns out to be practically the same, so a
decision was made to include the neutral responses in the final indicator
Latin America in the mirror. Objective and subjective dimensions of social inequity and well-being in the region
per capita GDP, and the scale on the right represents the net percentage
of subjective evaluations of the current economic situation. On this axis,
percentages above zero indicate that the percentage of positive or neutral
evaluations is greater the percentage of negative evaluations. Conversely,
negative percentages indicate that negative evaluations outweigh positive
and neutral evaluations.
The main difference that stands out between these three figures is that the
countries with narrow social gaps describe the economy in better terms than
those with average social gaps, and both groups describe the economy in better
terms than the countries with wide social gaps. This means that the wider the
social gap, the more pessimistic the public will feel about the economy.
Figure I.7
■■
Countries with narrow social gaps (1996-2008): evaluation of the country’s
economy and variation in per capita GDP
Q: How would you rate the current economic situation in the country in general?
Would you say it is very good, good, regular or bad?
Annual variation in per capita GDP
6.3
6
4
2
4.7
2.5
2.2
4
0
-2
80
8.7
8
9
1
6.6
6.2
1.6
60
4.9
24
10
-1.3
-15
-2.4
-4
58
40
36
16
0.2
-17
55
-11
20
0
-20
-13
-40
-6
-6.3
-8
Net percentage economic evaluations
10
-60
r = 0.61
-10
Variation in per capita GDP
2008
2007
2006
2005
2004
2003
2002
2001
2000
1999
1998
1997
1996
-80
Current assessment of economy
Source: Latinobarómetro, 1995-2008.
During the 1995-2007 period, the net percentage of positive economic
evaluations averaged 11% in the countries with narrow social gaps, but fell
to 4% in countries with average social gaps. The countries with wide social
gaps had a net negative percentage of –14%. In the countries in the region
with greater social inequity, economic pessimism prevailed, whereas in more
equitable countries, there was greater economic optimism.5
5
By economic optimism, we mean that public opinion tends to evaluate a country’s economic conditions
favorably, where pessimism reflects predominantly unfavourable evaluations.
41
Chapter I
Economy and perceptions of well-being
■■
Figure I.8
Countries with average social gaps (1996-2008): evaluation of the country’s
economy and variation in per capita GDP
Q: How would you rate the current economic situation in the country in general?
Would you say it is very good, good, regular or bad?
8
80
3.6
4
1.4
2
1.4
17
0
1.7
4
50
3.3
2.1
60
5.1
5
4
28
1.1
40
35
20
0.1
-0.6
0
3
-1
-2
-6
-7
-9
-8
-9
-14
-16
-20
-4
-40
r = 0.80
-6
Variation in per capita GDP
2008
2007
2006
2005
2004
2003
2002
2001
2000
1999
1998
1997
1996
-60
Current assessment of economy
Source: Latinobarómetro, 1995-2008 and Economic Commission for Latin America and the Caribbean (ECLAC).
■■
Figure I.9
Countries with wide social gaps (1996-2008): evaluation of the country’s
economy and variation in per capita GDP
8
100
6
80
4
2
1.2
0
-2
2
2.6
1
1.2
0.4
-6
-3
2.1
2.9
0.3
2.2
40
23
0.1
7
-0.5
-11
60
3.4
22
20
0
-20
-23
-30
-35
-41
-4
-17
-20
-29
-40
r = 0.57
-60
Variation in per capita GDP
2008
2007
2006
2005
2004
2003
2002
2001
2000
1999
1998
1997
1996
-6
Current assessment of economy
Source: Latinobarómetro, 1995-2008 and Economic Commission for Latin America and the Caribbean (ECLAC).
42
Net percentage economic evaluations
Annual variation in per capita GDP
Q: How would you rate the current economic situation in the country in general?
Would you say it is very good, good, regular or bad?
Net percentage economic evaluations
Annual variation in per capita GDP
6
Latin America in the mirror. Objective and subjective dimensions of social inequity and well-being in the region
But what does this relationship mean? Is the greater optimism of people
who live in countries with narrow social gaps the result of an attitudinal bias?
In other words, do they tend to view things more favorably? Or is it because
economic conditions are objectively better? The data we have do not allow us
to answer this question, but we can certainly formulate some hypotheses.
It is possible that both aspects —attitudinal bias and the impact of
objective conditions— carry a certain weight in the public’s economic opinions.
The objective impact can be easily explained: If a favourable evaluation is
the product of better objective conditions, countries with narrow social gaps
should have higher rates of pessimism during periods of economic hardship,
and likewise, optimism should rise in times of prosperity. But what would
explain the attitudinal inclination towards optimism in the countries with
narrow social gaps?
Studies derived from the World Values Survey have shown that, in
general, the sense of subjective well-being is greater in more economically
developed countries and is generally tied to other attitudinal characteristics
such as greater tolerance and acceptance of others (Inglehart, 1997; Inglehart
and Welzel, 2005).
However, the findings of the global study are insufficient to confirm
the existence of an intrinsically positive attitudinal bias in more affluent
societies (where a more critical public has also emerged). Moreover, the
variance observed between Latin American societies is less than that between
societies participating in the World Values Survey, which run from Sweden
and Finland, where annual per capita GDP is higher than US$ 30,000, to
Bangladesh or Zimbabwe, where per capita GDP ranges between US$ 1,300
and US$ 200. According to the 2000 World Values Survey, the percentage of
people reporting satisfaction with their lives was 80% and 84% in Sweden
and Finland and 32% and 18% in Bangladesh and Zimbabwe (see Halman
and others, 2008).
Returning to figures I.7, I.8 and I.9, it can also be observed that the
correlation between the objective economy and the perceived economy in each
one of these groups of countries is relatively high. In the case of the countries
with narrow social gaps, there is a 0.62 correlation. In countries with average
social gaps, it is 0.80, and in the countries with wide social gaps, it is 0.57.
As expected, the correlation in each case is positive, which means that
GDP growth is associated with an improvement in subjective economic
evaluations, whereas GDP contraction is associated with a deterioration in
these evaluations.
Thus, growth has a positive impact on economic optimism, although
the impact cannot be described as lineal, i.e., it does not rise or fall more
43
Chapter I
Economy and perceptions of well-being
depending on the size of the social gap. It is in the countries with average
social gaps where the observed relationship is strongest.
When these results are matched with those related to economic concerns,
in the countries with high GDP and narrow social gaps, growth has the
effect of diminishing perceptions of economic problems, but it has less of
an impact on perceptions of the economic situation in countries with wide
social gaps. Growth is successfully used to reduce economic problems in the
countries with narrow social gaps.
In the countries with wide social gaps, there is an inverse effect. Growth
improves the public’s perceptions of current economic conditions but this does
not solve the problems. Growth is not successfully used to solve economic
problems, and it is believed to have a greater impact than it actually does.
4.
Expectations about future economic conditions
The record of the consumer confidence index in the United States provides
an example of a subjective indicator that not only is closely related to
economic behavior but also anticipates it, which makes it a reliable predictor
of the country’s economy. In our analysis, we do not argue that evaluations
necessarily anticipate economic behavior, but we do expect to see a significant
relationship between expectations and economic performance.
In the following section, we analyse the following question about future
economic expectations: “Over the next 12 months, do you think that, in
general, the country’s economic situation will be much better, a little better,
the same, a little worse or much worse than now?” This indicator is presented
in figures I.10, I.11 and I.12, for countries with narrow, average and wide
social gaps. These figures also present the annual variation in per capita GDP
on the left axis and the objective indicator on the right axis.
The difference concerning the impact of this indicator is evident. First,
the correlations are much lower compared with the indicator for current
economic conditions discussed in the previous section. Second, the highest
correlation, of 0.42, is seen in the countries with narrow social gaps, whereas
correlations of 0.39 and 0.09 are seen in the countries with average and wide
social gaps, respectively. This means that the wider the social gap, the weaker
the relationship will be between the objective economy and the public’s
economic expectations.
These results can be read as follows: People in countries with wide social
gaps are less optimistic about the future than people in countries with narrow
social gaps. Moreover, the present and the future play distinct roles depending
on the size of the social gap in Latin American societies. The present carries
44
Latin America in the mirror. Objective and subjective dimensions of social inequity and well-being in the region
■■
Figure I.10
Countries with narrow social gaps (1996-2008): economic
expectations and variation in per capita GDP
Q: In the next 12 months, do you think that the general economic situation in the country will be
much better, a little better, the same, a little worse or much worse than it is now?
Annual variation in per capita GDP
6.3
6
4
6.6
4.7
2.5
2.2
60
48
0
43
0.2
37
-2
1.6
4.9
38
60
47
-1.3
48
50
50
40
-2.4
23
80
70
63
56
44
90
6.2
74
2
-4
100
8.7
8
30
-6
20
-6.3
-8
Net percentage economic evaluations
10
10
r = 0.42
-10
2008
2007
2006
2005
2004
2003
2002
2001
2000
1999
1998
1997
1996
0
Future economy of the country
Variation in per capita GDP
Source: Latinobarómetro, 1995-2008 and and Economic Commission for Latin America and the Caribbean (ECLAC).
■■
Figure I. 11
Countries with average social gaps (1996-2008): economic
expectations and variation in per capita GDP
Q: In the next 12 months, do you think that the general economic situation in the country will be
much better, a little better, the same, a little worse or much worse than it is now?
10
100
90
6
3.6
4
2
1.4
-2
2.1
1.4
1.7
0.1
-0.6
0
4
3.3
44
42
36
35
39
5.1
4
56
1.1
40
5
53
70
60
50
42
37
40
32
27
-4
80
30
26
-6
-8
20
Net percentage economic evaluations
Annual variation in per capita GDP
8
10
r = 0.39
-10
Variation in per capita GDP
2008
2007
2006
2005
2004
2003
2002
2001
2000
1999
1998
1997
1996
0
Future economy of the country
Source: Latinobarómetro, 1995-2008 and and Economic Commission for Latin America and the Caribbean (ECLAC).
45
Chapter I
Economy and perceptions of well-being
■■
Figure I.12
Countries with wide social gaps (1996-2008): economic expectations
and variation in per capita GDP
Q: In the next 12 months, do you think that the general economic situation in the country will be
much better, a little better, the same, a little worse or much worse than it is now?
10
100
90
6
80
4
2
1.2
2
2.6
1
-0.5
0
43
-2
34
0.4
0.3
0.1
2.1
1.2
2.9
3.4
2.2
60
50
49
40
39
35
41
50
40
34
-4
-6
70
30
14
24
-8
20
23
10
r = .09
12
Net percentage economic evaluations
Annual variation in per capita GDP
8
-10
Variation in per capita GDP
2008
2007
2006
2005
2004
2003
2002
2001
2000
1999
1998
1997
1996
0
Future economy of the country
Source: Latinobarómetro, 1995-2008 and Economic Commission for Latin America and the Caribbean (ECLAC).
more weight in societies with average social gaps, whereas the future is more
important in societies with narrow social gaps. In both cases, the weakest
relationship between the objective and the perceived economy is observed
in countries with wide social gaps.
In this case, an attitudinal effect could be said to exist in the countries
with wide social gaps because they seem to measure the future in terms of
the present. In other words, these countries have a relatively static economic
horizon, while the countries with narrow social gaps have a dynamic horizon.
Furthermore, the future depends less on the present than on economic growth.
An additional consequence of inequality: it makes expectations narrower.
D. Economic sentiment index
The previous sections analysed individual variables separately. In this section, we
analyse an economic sentiment index, which is a composite indicator of opinions
on a country’s present, past and future economic situation. Our expectation
is that this indicator, by integrating different facets of the perceived economy,
will have a stronger relationship with the objective indicators.
46
Latin America in the mirror. Objective and subjective dimensions of social inequity and well-being in the region
■■
Box I.3
Measuring economic sentiment
The economic sentiment index consists of three opinion variables measured by
Latinobarómetro:
In general, how would you describe the
country’s present economic situation? Very
good, good, average, bad or very bad.
Coded:
1= Negative evaluation
2= Neutral or no opinion
3= Positive evaluation
Do you consider the country’s present
economic situation to be better, the same
or worse than it was 12 months ago?
(Question asked from 1995 to 2000)
Coded:
1= Negative evaluation
2= Neutral or no opinion
3= Positive evaluation
Do you consider the country’s present
economic situation to be much better,
a little better, the same, a little worse or
much worse than 12 months ago? (From
2001 to 2008, the modifier “about the
same” was used for the third option.)*
This variable was not
included in the 2007
survey, so its value is an
average derived from the
2006 and 2008 surveys.
And over the next 12 months, do you
think that, in general, the country’s
economic situation will be better, the
same or worse than now? (Question
asked from 1995 to 2000)
Coded:
1= Negative evaluation
2= Neutral or no opinion
3= Positive evaluation
And over the next 12 months, do you
think that, in general, the country’s
economic situation will be much better,
a little better, the same, a little worse or
much worse than now? (From 2001 to
2008, the modifier “about the same” was
used for the third option.)*
This variable, in turn, was recoded into three categories: negative, mixed and
positive opinions
Source: Latinobarómetro,
* These changes to the questions were made in 2001 to standardize the questions of the global barometer, increasing the
number of options from three to five and allowing for more diverse responses. The question related to the past evaluation
of the national economy was not included in the 2007 survey, so the value assigned for that year is an average of the
observations made in 2006 and 2008.
Figure I.13 shows the net percentages derived from the economic
sentiment index (which represent the net percentage of favourable and neutral
opinions minus the percentage of unfavourable opinions) and the annual GDP
variation in each country for every year of the period of study. The positive
percentages on the vertical axis reflect a greater proportion of favourable
47
Chapter I
Economy and perceptions of well-being
■■
Figure I.13
Latin America (1995-2008): correlation between
economic sentiment and GDP variation
r=0.49 Linear R2 = 0.24
100
80
60
Economic sentiment index
40
20
0
-20
-40
-60
-80
-100
-20
-15
-10
-5
0
5
10
15
20
Annual variation in per capita GDP (by country and year)
Source: Latinobarómetro, 1995-2008 and Economic Commission for Latin America and the Caribbean (ECLAC).
or optimistic opinions about the economy, whereas negative percentages
indicate that a majority of the opinions were unfavourable or pessimistic. As
shown, the correlation between these two measures is .49, which means that
as per capita growth increases, we find more positive economic sentiments.
In contrast, as GDP falls, negative economic sentiments rise.
This indicator shows a clear correspondence between the objective economy
and the perceived economy, measured through opinion studies, but does not
allow us to determine the causal direction between them. However, assuming for
a moment that the perceived economy reflects the objective economy, a simple
regression analysis that takes the annual variation in GDP per country as the
independent variable and the value used by the economic sentiment index as the
corresponding dependent variable finds that GDP has a statistically significant
impact on the index and that a one-unit change in per capita GDP produces a
change of 4.6 percentage points in the economic sentiment index.
This means that a positive variation of one percentage point in per capita
GDP would translate into a net improvement of 4.6 percentage points in
the economic sentiment index, taking into account all 18 countries and their
48
Latin America in the mirror. Objective and subjective dimensions of social inequity and well-being in the region
annual indicators for the 1995-2008 period. For example, 5% growth for the
region as a whole would generate a net increase of 23 percentage points in the
economic sentiment index, without considering any other control variable.
The explained variance (R2 adjusted) in this simple model is 23%, as shown
below in table I.2:
■■
Table I.2
Latin America (1996-2008): impact of annual variation in per capita gdp on the
economic sentiment index, ordinary least squares regression
Dependent variable:
Economic sentiment
index
Unstandardized
coefficients
B
(Constant)
Annual GDP variation
Standardized
coefficients
Std. Error
-19 979
2 409
4 587
.560
R2
.238
R2 corrected
.234
t
Sig.
Beta
.487
-8 292
.000
8 186
.000
Source: Latinobarómetro 1996-2008 and Economic Commission for Latin America and the Caribbean (ECLAC).
The economic sentiment index varies depending on the size of the
social gap in the countries. Table 4 shows, for example, that the optimismpessimism spread between the countries with wide and narrow social gaps is
just 13 percentage points in the index. However, the net spread (percentage
of optimists minus the percentage of pessimists) is 2 points in the countries
with narrow social gaps, 14 points in the countries with average social gaps
and 30 points in the countries with wide social gaps. Whereas in the first group
there are nearly the same percentage of optimists and pessimists, in the last
group there are nearly twice as many pessimists as optimists.
■■
Table I.3
Latin America (1996-2008): percentage of optimists and pessimists in the economic
sentiment index according to social gaps in the countries
Countries by size of social gaps
Optimists
Percentage
Pessimists
Difference
Percentage Optimists Percentage Pessimists
Narrow
49
51
-2
Average
43
57
-14
Wide
36
64
-30
Difference between countries with narrow and wide social gaps
13
13
Source: Latinobarómetro 1996-2008 and Economic Commission for Latin America and the Caribbean (ECLAC).
49
Chapter I
Economy and perceptions of well-being
What is the impact of GDP on the economic sentiment index according
to the social gap of the countries? Table I.4 shows the simple regression
analysis for each group of countries, according to the size of their social
gap. This information indicates that the correlation between the objective
economy and the economic sentiment index is stronger in the countries
with narrow social gaps (0.57; see also the beta or standardized coefficient)
and weaker in the countries with wide social gaps (0.34). The percentage of
explained variance (R2) also indicates that the model has a better adjustment
in the countries with narrow social gaps (31% of variances explained) than in
the countries with wide social gaps (12%). This means that the relationship
between the objective and the perceived economy is stronger in the countries
with narrow social gaps. The wider the social gap, the less correspondence
there will be between the objective and the perceived economy.
■■
Table I.4
Latin America (1996-2008): impact of gdp on the economic sentiment index according
to social gap, ordinary least squares regression
Dependent variable: Economic sentiment index
Standardized coefficients
Countries with a…
Beta
t
Sig.
-2 343
0.022
5 550
0.000
-4 885
0.000
4 593
0.000
-7 304
0.000
2 850
0.006
Narrow social gap
(Constant)
Annual GDP variation
0.570
R2
0.325
R2 corrected
0.314
Average social gap
(Constant)
Annual GDP variation
0.432
R
0.187
R2 corrected
0.178
2
Wide social gap
(Constant)
Annual GDP variation
0.343
R
0.118
R2 corrected
0.103
2
Source: Latinobarómetro 1996-2008 and Economic Commission for Latin America and the Caribbean (ECLAC).
The relationship between the objective and the subjective economy
is also observed over time. Figure I.14 shows trends in the annual per
capita GDP variation and the value in the economic sentiment index for
each corresponding year, for Latin America as a whole. In this case, the
50
Latin America in the mirror. Objective and subjective dimensions of social inequity and well-being in the region
■■
Figure I.14
Latin America (1996-2008): economic sentiment index and variation in per capita GDP
8
100
4
4
3.5
2
4.3
3.3
0
0.9
-1.2
-11
-23
-31
-17
60
40
0.9
-2
4.3
2.5
2
-4
80
4.7
-1
-22
24
25
20
0
-2
-10
-30
23
-2
-19
-20
-15
-40
-60
-6
Net percentage economic sentiment index
Annual variation in per capita GDP
6
-80
r = 0.64
-8
Variation in per capita GDP
2008
2007
2006
2005
2004
2003
2002
2001
2000
1999
1998
1997
1996
-100
Economic sentiment index
Source: Latinobarómetro and Economic Commission for Latin America and the Caribbean (ECLAC).
correlation between the objective and the subjective economy is .64. With the
exception of three points in time in the series of 13 points, the two variables
move in the same direction. The correlation increases when the years are
considered sequentially. The relationship grows stronger when the number
of observations decreases and a single year is considered, that is, a single
datum of GDP variation for each country.
GDP varies enormously by country and by year, with countries
experiencing a greater or lesser degree of volatility, as we have mentioned.
In Argentina, a country with a narrow social gap, the annual per capita GDP
variation in 2001 was –5.4, whereas in 2002 it was –11.7, which is a drop from
one year to the next of slightly more than six percentage points. In these
same years, the net percentage from the economic sentiment index fell from
–49% to –84%. In this case, each percentage point in GDP variation was
accompanied by a 5.8‑point variation in the subjective economic evaluation
index. During the economic recovery that took place in Argentina the
following year, when the annual GDP variation was 7.8% (a recovery of
nearly 20 percentage points), the percentage in the economic sentiment
index moved from –84% to +55%, a net change of 139 points, equivalent
to 6.9 percentage points in the subjective indicator for every unit of positive
variation in the objective indicator (see figure I.15).
However, in Argentina, the relationship between the objective and the
subjective economy was not as strong between 1995 and 1998, the years
51
Chapter I
Economy and perceptions of well-being
■■
Figure I.15
Argentina (narrow gap), 1995-2008: economic sentiment index
and variation in per capita GDP
15
100
4.3
5
2.7
35
46
7.6
7.4
-14
5.8
-1.8
-28
-37
-37
-40
-49
-60
-11.7
2008
2007
-100
2006
2002
2001
2000
1999
1998
1997
Variation in per capita GDP
-80
r = 0.78
-84
-15
1996
0
-20
-5.4
-4.4
-10
1995
40
20
10
-22
-4
60
38
-7
2005
-5
8.1
7.8
2004
0
8
Net percentage economic sentiment index
6.9
80
66
55
2003
Annual variation in per capita GDP
10
Economic sentiment index
Source: Latinobarómetro, 1995-2008 and Economic Commission for Latin America and the Caribbean (ECLAC).
when President Menem privatized State-owned enterprises and the economy
underwent major structural changes. The variation in growth began to have
more of an impact on the economic sentiment index in 1999, when President
De La Rua was elected, notwithstanding the political instability that led to his
fall in 2001. The correlation between the objective indicator and the subjective
indicator was –0.73 prior to 1999 and 0.96 after 1999. However, the number
of observations is too small to consider these correlations as robust indicators.
The correlation for the entire period is 0.78.
The case of Argentina is interesting to note because it confirms that
political instability does not necessarily affect the relationship between economic
sentiments and GDP. In other words, these are separate dimensions that are
not interconnected. Political institutional instability can affect GDP and, by
extension, the public’s expectations and sentiments, but at least in Argentina
during the major economic and political crisis of 2001, there is no evidence that
the relationship between economic perceptions and GDP changed for political
reasons. At the same time, we see a different relationship between GDP and
expectations in Argentina during periods of structural change in the economy,
which seems consistent with the earlier statement, indicating that economic
expectations are directly tied to economic and cyclical events, such as GDP, or
structural events such as the privatization of State-owned enterprises.
Figure I.16 shows the series of data on the objective and subjective
economy in Uruguay, which also belongs to the group of countries with
52
Latin America in the mirror. Objective and subjective dimensions of social inequity and well-being in the region
■■
Figure I.16
Uruguay (narrow gap), 1995-2008: economic sentiment index
and variation in per capita GDP
15
100
Annual variation in per capita GDP
10
54
4.9
5
0
-5
11.2
-5
-2.1
-20
4.3
3.9
-5
-3
-3.4
-29
6.6
2.2
55
6.8
54
7.2
80
60
54
40
20
0
0
-9
-3.6
-1.8
-33
-57
-20
-29
-40
-60
-10
-80
r = 0.68
-11
Net percentage economic sentiment index
11.9
-15
Variation in per capita GDP
2008
2007
2006
2005
2004
2003
2002
2001
2000
1999
1998
1997
1996
1995
-100
Economic sentiment index
Source: Latinobarómetro, 1995-2008 and Economic Commission for Latin America and the Caribbean (ECLAC).
narrow social gaps. As in Argentina, very significant changes in economic
behavior were noted in Uruguay, with a substantial variation in per capita
GDP from 2002 to 2004. The observed correlation between these variables
in Uruguay is .68, slightly less than in Argentina.
In Colombia and Mexico, countries with average social gaps, the
correlations between the objective and the subjective economy are 0.73 and
0.46, respectively (see figures I.17 and I.18).
In the case of Colombia, it is notable that the economic weakening prior
to 2000 was accompanied by moderate declines in the subjective indicator,
but the period of recovery that began in 2000 was accompanied by much
sharper increases in the economic sentiments index. It should also be noted
that the drop in GDP from 2007 to 2008 was not reflected in public opinion,
and the net percentage in the subjective indicator continued to climb. It is
unlikely that this trend will continue in the 2009 survey, which will capture
the impact of the financial crisis.
Mexico, for its part, exhibits more “fickle” behavior than observed in
Colombia, and the correlation between the variables is more modest. Both
the objective and the subjective economy in Mexico have a very difficult
starting point, namely, the 1995 peso crisis. That year, Mexico’s economy
contracted nearly 8%, and the net percentage in the economic sentiment
index approached –80%. The subsequent recovery during President Zedillo’s
six-year term did not correspond clearly with perceptions, and it was not
53
Chapter I
Economy and perceptions of well-being
■■
Figure I. 17
Colombia (average gap), 1996-2008: economic sentiment index
and variation in per capita GDP
1.6
1.3
0.3
0
-24
-42
3
3
8
9
29
43
36
-49
1.7
-60
-5.8
-80
Variation in per capita GDP
-100
2008
2007
2006
2005
2004
2003
2002
r = 0.73
2001
1998
1997
1996
-8
0
-40
-70
-6
20
-20
-40
-47
60
40
13
-1.1
-51
-4
0.9
0.6
2000
-2
80
4.2
4
2
100
6.8
Net percentage economic sentiment index
5.5
6
1999
Annual variation in per capita GDP
8
Economic sentiment index
Source: Latinobarómetro, 1995-2008 and Economic Commission for Latin America and the Caribbean (ECLAC).
■■
Figure I. 18
Mexico (average gap), 1996-2008: economic sentiment index
and variation in per capita GDP
10
100
5.1
4.9
3.3
4
3.2
3.2
2.1
2
9
18
-24
-2
-4
0.6
-0.1
14
0.6
-14
-15
6
-9
-2
20
0
-20
-40
-60
-52
-72
-80
-7.8
Variation in per capita GDP
-100
2008
2007
2006
2005
2004
2003
2002
2001
2000
1999
1998
r = 0.43
1997
1995
-10
-1.1
40
2
-41
-6
-8
2.3
5
5
0
60
3.7
Net percentage economic sentiment index
80
6
1996
Annual variation in per capita GDP
8
Economic sentiment index
Source: Latinobarómetro, 1995-2008 and Economic Commission for Latin America and the Caribbean (ECLAC).
until 2003 or 2004, halfway through Vicente Fox’s six-year term as president,
that the correspondence between the objective and the subjective economy
became much stronger. It has been documented that although the economy
had virtually no effect on elections during the reign of the government party,
the PRI (see Magaloni, 2006), in 2006 the economy was a pivotal factor in the
voting behavior of the Mexican people (Moreno, 2007, 2009a and 2009b). This
reflects the increasing importance of the economy in the political opinions
and preferences of the Mexican people.
54
Latin America in the mirror. Objective and subjective dimensions of social inequity and well-being in the region
■■
Figure I. 19
Plurinational State of Bolivia (wide gap), 1996-2008: economic sentiment
index and variation in per capita GDP
25
100
r = 0.64
Annual variation in per capita GDP
60
40
15
40
23
7
13
20
-5
10
-13
-16
-26
-23
5
-44
2.5
1.9
0
-29
-1.9
-5
-20
-40
-55
2.5
0.1
0
-31
0.2
-0.6
0.4
1.9
2.2
2.6
3.7
2.4
-60
-80
Net percentage economic sentiment index
80
20
Variation in per capita GDP
2008
2007
2006
2005
2004
2003
2002
2001
2000
1999
1998
1997
1996
-100
Economic sentiment index
Source: Latinobarómetro, 1995-2008 and Economic Commission for Latin America and the Caribbean (ECLAC).
■■
Figure I. 20
Guatemala (wide gap), 1996-2008: economic sentiment index
and variation in per capita GDP
25
100
60
40
15
20
10
5
0
-17
-12
-20
-23
-27
-35
-50
0.6
-38
-54
2.0
2.6
1.5
1.2
0.0
-8
-12
0
-20
-45
-40
2.7
1.3
-0.1
-4
1
3.1
0.7
-60
0.8
-5
-80
Net percentage economic sentiment index
Annual variation in per capita GDP
80
r = 0.59
20
Variation in per capita GDP
2008
2007
2006
2005
2004
2003
2002
2001
2000
1999
1998
1997
1996
-100
Economic sentiment index
Source: Latinobarómetro, 1995-2008 and Economic Commission for Latin America and the Caribbean (ECLAC).
Figures I.19 and I.20 show the data series and correlations of 0.64 and
0.59 in the Plurinational State of Bolivia and Guatemala, respectively, countries
with wide social gaps. Although this correlation is relatively strong, visually it is
clear that the relationship between the objective and the perceived economy is
55
Chapter I
Economy and perceptions of well-being
less reliable in these countries than in Argentina or Uruguay, which confirms the
simple regression analysis discussed above. In this case, the task is to observe
not only the correlations but also the goodness of fit between the data, that
is, not only to what extent they move in the same direction, but also whether
they move in close alignment (as in the countries with narrow social gaps) or
more distantly (as in the countries with wide social gaps). In the Plurinational
State of Bolivia, for example, the peaks observed in the subjective indicator
in 1998 and 2006 do not appear to respond to actual objective economic
performance. From 1997 to 1998, there is no growth, and from 2005 to 2006
growth is a mere 0.4 percentage points. In the simple regression analysis, these
types of phenomena cause greater movement in the subjective indicator in the
countries with wide social gaps, but the correspondence between the data in the
countries with narrow social gaps is actually stronger. In brief, the relationship
between the objective and the perceived economy is stronger in the countries
with narrow social gaps, although changes in GDP can have a greater impact
on perceptions in the countries with wide social gaps.
It would seem that people tune their economic sentiments to the
economic growth of the country in which they live. On average, the narrower
the social gap, the more synchronized growth and sentiment will be, although
none of the countries have the same pattern as any other. The impact of
growth on perceptions has been stronger over the last six years, inasmuch
as growth is sustained. However, the relationship between growth and
expectations in specific countries is explained by individual events in each
one, with considerable variation from one country to the next.
E. Employment insecurity and subjective income
At the beginning of this chapter, a review of the literature was conducted
in which at least three variables were mentioned that are vitally important
for understanding the relationship between the objective economy and the
perceived economy: economic growth, unemployment and inflation. In this
section, we incorporate the two latter variables to supplement the analysis
of growth conducted thus far. The unemployment rate has its subjective
counterpart in the sentiment of employment insecurity, measured by the
question: “How concerned would you say you are that you will be left without
work or unemployed during the next 12 months? Very concerned, concerned,
not very concerned, not concerned.” Subjective income is the counterpart
to the inflation rate and is measured by the question: “Are the salary/wage
you receive and your total household income sufficient to satisfactorily meet
your needs? Which of the following statements describes your situation?
It’s sufficient and we can save; it’s just sufficient and we don’t have major
56
Latin America in the mirror. Objective and subjective dimensions of social inequity and well-being in the region
problems; it’s not sufficient and we have problems; it’s not sufficient and we
have major problems.” The two options indicating “not sufficient” have been
grouped together to serve as the indicator for subjective income.
1.
Employment insecurity and unemployment
Unemployment rates in Latin America are associated with the public’s job
loss concerns, which we refer to as “employment insecurity” (see figure I.21).
A higher unemployment rate increases employment insecurity, whereas a
lower rate decreases it. The correlation between the unemployment rate and
employment insecurity is .87 for the 1996-2008 period in Latin America.
These data indicate that, for the region as a whole, an increase of one
point in the unemployment rate causes insecurity to rise by 4.6 percentage
points. Along these lines, the decline in unemployment from 11% to 7.9%
(3.1 points) between 2000 and 2007 coincided with a decrease from 50 to
38 percentage points in the net percentage of employment insecurity (four
points on average for every drop of one point in the unemployment rate
during this seven-year period).
■■
Figure I.21
Latin America (1996-2008): labour insecurity and unemployment rate
Q: How worried are you about becoming unemployed in the next 12 months?
How worried would you say you are about losing your job
or being out of work in the next 12 months?
25
48
44
52
49
46
51
57
80
50
53
50
39
38
60
36
15
40
20
0
10
10
9.3
10.3
11.0
10
10.2
11.0
11
10
-20
9.1
8.6
5
7.9
7.5
r = 0.87
0
-40
-60
Percentage labour insecurity
Unemployment rate
20
100
-80
Unemployment rate
2008
2007
2006
2005
2004
2003
2002
2001
2000
1999
1998
1997
1996
-100
Percentage labour insecurity
Source: Latinobarómetro, 1995-2008 and Economic Commission for Latin America and the Caribbean (ECLAC).
57
Chapter I
Economy and perceptions of well-being
■■
Figure I.22
Uruguay (1995-2008): labour insecurity and unemployment rate
Q: How worried are you about becoming unemployed in the next 12 months?
How worried would you say you are about losing your job
or being out of work in the next 12 months?
100
25
Unemployment rate
36
32
30
29
31
40
31
60
45
28
17
15
10
41
28
26
16.9
15.3
10.3
11.9
13.6
11.5
10.1
13.1
11.3
40
19
20
0
-11
12.2
-20
11.4
9.6
5
7.9
-40
-60
Percentage labour insecurity
80
20
-80
r = 0.76
-100
Unemployment rate
2008
2007
2006
2005
2004
2003
2002
2001
2000
1999
1998
1997
1996
1995
0
Percentage labour insecurity
Source: Latinobarómetro, 1995-2008 and Economic Commission for Latin America and the Caribbean (ECLAC).
■■
Figure I.23
Latin America (2000-2007): correlation between labour insecurity and unemployment
Q: How worried are you about becoming unemployed in the next 12 months?
How worried would you say you are about losing your job
or being out of work in the next 12 months?
r = 0.13; R sq lineal = 0.02
100
90
80
Labour insecurity
70
60
50
40
30
20
10
0
0
5
10
15
20
25
Annual variation in per capita GDP (per country and year)
Source: Latinobarómetro, 1995-2008 and Economic Commission for Latin America and the Caribbean (ECLAC).
Note: In total, there were 131 actual observations each corresponding to an annual measurement in each country. Correlations by social
gap: countries with narrow social gaps: 0.31. Countries with average social gaps: 0.27. Countries with a wide social gap: 0.05.
58
Latin America in the mirror. Objective and subjective dimensions of social inequity and well-being in the region
In Uruguay, the relationship between unemployment and employment
insecurity is striking. The rise in unemployment from 2001 to 2003 to rates
between 15% and 17% mirrored a substantial increase in employment
insecurity, with between 40% and 45% of respondents expressing job loss
fears. In 2007, with unemployment at 9.6%, the percentage of Uruguayans
concerned about unemployment fell to 19%. This demonstrates a strong
relationship between objective and subjective economic indicators related
to employment. On average, for the entire period, a one-point variation in
Uruguay’s unemployment rate caused a 3.8‑point movement in the perceptions
index. If we look at the 2002-2008 period, when unemployment dropped
from 17% to 7.9% (9 percentage points), the employment insecurity indicator
fell from 45% to –11% (56 percentage points). This means that, during this
period, for every point of variation in the objective indicator, the subjective
indicator moved an average of 5.9 percentage points.
Although these data for the region, and Uruguay in particular, suggest a
close relationship between unemployment and employment insecurity, a more
in-depth analysis of the impact of unemployment on employment insecurity
in the region leads to a different conclusion: the relationship between the two
variables is rather moderate, and in the countries with wide social gaps, it is
practically nonexistent. Figure I.23 shows the weak relationship between the
urban unemployment rate and the percentage of respondents who reported
concern about losing their job in the 2000-2007 period. The 0.13 correlation
demonstrates the weak relationship between the two variables. On average,
one unit of change in the unemployment rate is associated with 3.8 percentage
points of change in the subjective indicator.
As expected, the correlation between these variables varies according
to the social gap in the countries. The highest correlation, which is 0.31, is
observed in the countries with narrow social gaps, and the lowest correlation,
which is 0.05, is seen in the countries with wide social gaps. In the countries
with average social gaps, the correlation between the two variables is 0.27.
These data lead to two conclusions. The first is that the association between
unemployment and employment insecurity is practically nonexistent in the
countries with wide social gaps, and therefore the low correlation observed
for the region as a whole is caused by those countries. Unemployment has
no impact on employment insecurity if there is considerable social inequality.
The second conclusion is that because the correspondence between the
unemployment rate and insecurity is highest in the countries with narrow
social gaps, these objective and subjective economic indicators are more
synchronized in countries with less social inequality.
59
Chapter I
2.
Economy and perceptions of well-being
Subjective income and inflation
In this section, we examine the relationship between inflation and people’s
subjective income, the latter of which is measured by the question: “Are
the salary/wage you receive and your total household income sufficient to
satisfactorily meet your needs? Which of the following statements describes
your situation? It’s sufficient and we can save; it’s just sufficient and we
don’t have major problems; it’s not sufficient and we have problems; it’s not
sufficient and we have major problems.” For this subjective income indicator,
we focus on the “not sufficient” category and contrast it with its objective
counterpart, the inflation rate. The expectation is that higher inflation will
be associated with an increase in the percentage of people who say their
income is not sufficient.
Figure I.24 shows the degree of association, by year, between inflation
and subjective income in Latin America, with subjective income understood
as the net percentage of respondents who say their income is “not sufficient.”
For Latin America as a whole, we find a negative correlation between inflation
and the sentiment of insufficient subjective income. This does not confirm
our initial expectation (the higher the inflation, the greater the percentage
of people reporting insufficient income), and the primary reason for this is
that in several countries, not only is there no relationship between the two
variables, but there is even an inverse relationship.
In the case of Brazil, expectations about the relationship between these
two variables were met, as shown in figure I.25. When inflation was on the
rise in 2001 and 2002, a year in which the rate topped 12%, the percentage of
Brazilians reporting their income as insufficient increased, while in the years
following 2003, when inflation was lower, the net percentage for subjective
income changed in line with the drop in inflation. The correlation for the
entire period from 1995 to 2008 is .49 in Brazil. Higher inflation causes people
to feel more insecure about their income, whereas lower inflation leads to
less insecurity.
Figure I.26 shows that the correlation between inflation and subjective
income, at 0.16, is relatively weak. Subjective income (or the percentage of
people reporting that their income is insufficient) can be very high or very
low nearly independently of the objective inflation rate. However, as with the
relationship between unemployment and employment insecurity, in this case
there are also significant differences between the countries based on their
social gap. In the countries with narrow social gaps, the correlation between
inflation and subjective income is highest, at 0.35, whereas in the countries
with wide social gaps, the correlation between these variables is at its lowest,
at 0.11. The impact of inflation on subjective income is weaker in countries
with greater social inequality.
60
Latin America in the mirror. Objective and subjective dimensions of social inequity and well-being in the region
Figure I.24
■■
Latin America (1995-2008): perception that income “is not enough” and total inflation
Q: Are your salary/wage and total household income enough to meet your needs satisfactorily?
Which of the following statement describes your situation? We have enough and can save; we
have just enough and no major problems; we don’t have enough and have major problems.
25
100
Annual variation in CPI
15
60
18
0
1
-2
-7
14
11
9
11.2
10.9
17
3
-4
12
10
40
20
16
5
7.8
9
5
9
0
0
8.4
6.9
20
9.7
-20
6.2
-40
-60
6
Net percentage income “not enough”
80
20
-80
r = -0.30
0
Inflation
2008
2007
2006
2005
2004
2003
2002
2001
2000
1999
1998
1997
1996
-100
Net percentage “not enough”
Source: Latinobarómetro, 1995-2008 and Economic Commission for Latin America and the Caribbean (ECLAC).
■■
Figure I. 25
Brazil (1995-2008): perception that income “is not enough” and total inflation
Q: Are your salary/wage and total household income enough to meet your needs satisfactorily?
Which of the following statement describes your situation? We have enough and can save; we
have just enough and no major problems; we don’t have enough and have major problems.
100
22.4
r = 0.49
22
16
-12
0
-2
-10
10
0
-19
10
9.6
40
14
-13
9.3
-8
-15
5.7
7.7
6
3.1
4.5
5.9
-80
Inflation
2008
2007
2006
2005
2004
2003
2002
-100
1999
1998
1997
1996
1995
-40
-60
1.7
0
0
-20
7.6
5.2
5
20
7
12.5
8.9
2001
15
80
60
2000
Annual variation in CPI
20
Net percentage “not enough”
25
Net percentage “not enough”
Source: Latinobarómetro, 1995-2008 and Economic Commission for Latin America and the Caribbean (ECLAC).
61
Chapter I
Economy and perceptions of well-being
■■
Figure I.26
Latin America (2000-2007): correlation between perception
that income is “not enough” and inflation
Q: Are your salary/wage and total household income enough to meet your needs satisfactorily?
Which of the following statement describes your situation? We have enough and can save; we
have just enough and no major problems; we don’t have enough and have major problems.
r=0.16 Linear R2=0.03
80
60
40
20
0
- 20
- 40
- 60
- 10
0
10
20
30
40
50
60
70
80
90
Annual variation in per capita GDP (per country and year)
Source: Latinobarómetro, 1995-2008 and Economic Commission for Latin America and the Caribbean (ECLAC).
Notes: Correlations by social gap. Countries with narrow social gaps: 0.35. Countries with average social gaps: 0.22. Countries
with wide social gaps: 0.11.
F. Economic optimism and pessimism
In this chapter we have analysed (1) the relationship between the economic
sentiment index (as well as two of its components separately) and annual
variation in per capita GDP; (2) the relationship between employment
insecurity and the unemployment rate; and (3) the relationship between
inflation and subjective income. In this section, we look at whether the
various subjective economic variables are interrelated and, if so, what they
tell us about the countries we have identified as having wide, average and
narrow social gaps.
Table 6 shows a factor analysis in two modalities, by principal components
and with varimax rotation. The analysis includes the three variables used to build
the economic sentiment index, in addition to subjective income and employment
insecurity, all of which were described in previous sections. The analysis was
conducted for the countries as a whole and for each individual country (for
reasons of space, the table does not show the latter). As can be observed, the
results of the region‑level analysis reveal two principal factors.
The first factor is composed of the economic evaluation variables that
make up the economic sentiment index described earlier. This confirms that
62
Latin America in the mirror. Objective and subjective dimensions of social inequity and well-being in the region
the economic sentiment index is a reliable empirical measure and shows
how the subjective economic indicators pertain to the same dimension of
economic rationality by the public. The second factor combines subjective
income and employment insecurity in a dimension separate from that of the
economic sentiment index. The two factors explain just over 55% of the
total variance in the analysis.
In the analysis of the country-level results, we find that in 9 of the
18 countries, there is a single factor composed of the variables that make
up the economic sentiment index. In these countries, subjective income
and employment insecurity are not significant. Nevertheless, the economic
sentiment index constitutes, in effect, a perceptual dimension in all of the
Latin American countries. This allows us to use this index for an additional
analysis by social gap and occupational type.
■■
Table I.5
Latin America (1996-2007): factor analysis: subjective economic variables
Analysis of principal components
Varimax rotation with Kaiser
Factor I
Present economic situation of the country a
0.73
0.73
Past economic situation of the country b
0.72
0.78
Future economic situation of the country c
0.67
0.73
Subjective income d
-0.45
-0.16
Employment concerns e
-0.35
-0.00
Percentage of explained variance
36.87
Analysis of principal components
Varimax rotation with Kaiser
Factor II
Present economic situation of the country a
0.15
-0.18
Past economic situation of the country b
0.29
-0.05
Future economic situation of the country c
0.29
-0.02
Subjective income d
0.59
0.73
Employment concerns e
0.72
0.80
Percentage of explained variance
21.49
Source: Latinobarómetro 1996-2007.
a
Variable: “In general, how would you describe the country’s present economic situation? Would you say that it is …? Very
good, good, average, bad or very bad.” (Coded: 1=negative evaluation; 2=neutral or no opinion; 3=positive evaluation).
b
Variables: “Do you consider the country’s present economic situation to be better, the same or worse than it was 12 months
ago?” (Question asked from 1995 to 2000); “Do you consider the country’s present economic situation to be much better,
a little better, the same, a little worse or much worse than 12 months ago?” (Starting in 2001, the modifier “about the same”
was used for the third option.) (Coded: 1=negative evaluation; 2=neutral or no opinion; 3=positive evaluation.) This variable
was not included in the 2007 survey.
c
Variables: “And over the next 12 months, do you think that, in general, the country’s economic situation will be better, the
same or worse than now?” (Question asked from 1995 to 2000); “And over the next 12 months, do you think that, in general,
the country’s economic situation will be much better, a little better, the same, a little worse or much worse than now?” (Starting
in 2001, the modifier “about the same” was used for the third option.) (Coded: 1=negative evaluation; 2=neutral or no opinion;
3=positive evaluation).
d
Variable: “Are the salary/wage you receive and your total household income sufficient to satisfactorily meet your needs? Which
of the following statements describes your situation? It’s sufficient and we can save; it’s just sufficient and we don’t have major
problems; it’s not sufficient and we have problems; it’s not sufficient and we have major problems.”
e
Variable: “How concerned would you say you are that you will be left without work or unemployed during the next 12 months? Very
concerned, concerned, not very concerned, not concerned.” (Notes: This applies to all respondents until 2001; in 1995, the “No
job” option is coded as not applicable; starting in 2002, the instructions indicated that only active individuals should respond).
63
Chapter I
1.
Economy and perceptions of well-being
Optimism/pessimism by social gap
In this and the next section, we focus on analysing the version of the economic
sentiment index derived from the factor analysis. We will refer to this variable
simply as economic sentiment, to differentiate it from the additive index
used previously. Figure I.27 shows the average for the economic sentiment
indicator (Factor 1) according to social gap for the 1995-2008 period in
Latin America. This figure confirms that optimism tends to be higher in
the countries with narrow social gaps and lower in the countries with wide
social gaps. In addition, the movements in the subjective indicator are more
dramatic in the countries with narrow social gaps. The standard deviation
of the indicator for the observed period is 0.34 in the countries with narrow
social gaps and 0.22 in the countries with wide social gaps.
This means that, as can be observed in the figure, the variability of
the indicator increases as the social gap decreases. This is particularly the
case starting in 2000, and even more so beginning in 2003, the start of a
five-year growth period in the region. From 2003 to 2007, when the region
experienced sustained economic growth, the subjective economic indicator
tends to climb more steeply in the countries with narrow social gaps. This
means that economic growth generates much more optimism in countries
with less inequality.
Optimism began to fall in 2007 in the countries with narrow social
gaps, perhaps as an early sign of the 2008 financial crisis, but also because
the economies of those countries as a whole began a rapid deceleration.
Optimism continued to fall in 2008 but only in the countries with narrow
social gaps. This suggests not only that optimism is much more sensitive
to growth in those countries but also that this subjective indicator could
presage economic recessions. It should be noted that economic sentiment
encompasses perceptions of the past, present and future economy only, not
perceptions of inflation or unemployment.
An additional aspect that can be observed in figure I.27 is that at
their highest, economic optimism levels in the countries with wide social
gaps just barely rise above zero, i.e., the general mean. Meanwhile, in the
countries with narrow social gaps, optimism levels approach 1, as in 2006,
and pessimism levels just barely dip below zero, as in 1996-1998 and 20012002. This reflects a striking degree of inequity in subjective perceptions
of the economy. The richest countries in the region tend to be much more
optimistic, economically speaking.
Figures I.28, I.29 and I.30 summarize the relationship observed between
the objective economy and the subjective economy according to the size of the
social gap in the countries and confirm several points discussed in this chapter.
64
Latin America in the mirror. Objective and subjective dimensions of social inequity and well-being in the region
■■
Figure I.27
Latin America (1996-2008): economic sentiment index by social gaps in the countries
Optimism
1.0
0.8
0.6
Factor I: Economic sentiment
0.4
0.2
0.0
-0.2
Pessimism
-0.4
-0.6
-0.8
Narrow
Average
2008
2007
2006
2005
2004
2003
2002
2001
2000
1999
1998
1997
1996
-1.0
Wide
Source: Latinobarómetro, 1995-2008 and Economic Commission for Latin America and the Caribbean (ECLAC).
■■
Figure I.28
1.0
10
0.8
8
0.6
6
Real economy
0.4
4
2
0.2
Perceived economy
Pessimism
0.0
0
-0.2
-2
-0.4
-4
-0.6
-6
-0.8
Variation in per capita GDP
Factor I: Economic sentiment
Optimism
Countries with narrow social gaps (1996-2008): economic sentiment
index and variation in per capita GDP
-8
r = 0.63
-1.0
2008
2007
2006
2005
2004
2003
2002
2001
2000
1999
1998
1997
1996
-10
Source: Latinobarómetro, 1995-2008 and Economic Commission for Latin America and the Caribbean (ECLAC).
65
Chapter I
Economy and perceptions of well-being
■■
Figure I.29
1.0
10
0.8
8
0.6
6
Pessimism
Factor I: Economic sentiment
0.4
4
Real economy
0.2
2
0.0
0
-0.2
-2
-4
-0.4
Variation in per capita GDP
Optimism
Countries with average social gaps (1996-2008): economic sentiment
index and variation in per capita GDP
Perceived economy
-6
-0.6
r = 0.77
-0.8
-8
-10
2008
2007
2006
2005
2004
2003
2002
2001
2000
1999
1998
1997
1996
-1.0
Source: Latinobarómetro, 1995-2008 and Economic Commission for Latin America and the Caribbean (ECLAC).
■■
Figure I.30
1.0
10
0.8
8
0.6
6
4
0.4
Pessimism
Factor I: Economic sentiment
Real economy
0.2
2
0.0
0
-0.2
-2
-0.4
-4
-0.6
Variation in per capita GDP
Optimism
Countries with wide social gaps (1996-2008): economic sentiment
index and variation in per capita GDP
-6
Perceived economy
-8
-0.8
r = 0.43
-10
2008
2007
2006
2005
2004
2003
2002
2001
2000
1999
1998
1997
1996
-1.0
Source: Latinobarómetro, 1995-2008 and Economic Commission for Latin America and the Caribbean (ECLAC).
66
Latin America in the mirror. Objective and subjective dimensions of social inequity and well-being in the region
First, the synchronization between the objective and the perceived economy
is greater in the countries with narrow social gaps than in the countries with
wide social gaps. Periods of economic recovery are accompanied throughout
the period of study by improvements in the subjective economic indicator
in the former group of countries, whereas subjective improvements in the
latter group are seen only after a period of sustained growth. Accordingly,
people in the countries with narrow social gaps respond more reliably to
macroeconomic conditions than people in the countries with wide social
gaps. Second, optimism is greater in the first group of countries than in the
second, a finding that has led us to hypothesize the inequality of perceptions
according to social gap. Despite recurring recessions, the countries with
narrow social gaps have many more moments of economic optimism than the
countries with wide social gaps, where optimism has turned out to be more
the exception than the rule. Lastly, and as mentioned at the beginning of this
chapter, the volatility of the objective economy in the countries with narrow
social gaps does not preclude a high degree of synchronization between the
objective and the subjective economies. This volatility is evident in figure 28,
compared with figures 29 and 30, in which there is less volatility.
Lastly, figure I.31 represents a map of Latin America in the two perceptual
dimensions derived from the factors analysis shown in table I.5. Economic
sentiment (Factor 1) is plotted along the horizontal axis, and a dimension we
will call “economic ill-being” (Factor 2), which reflects employment insecurity
and subjective income, is along the vertical axis. The countries in the green
area are the ones that have narrow social gaps, and the countries in the red
area have wide social gaps. The rest, which have average social gaps, do not
appear in a colored area and are instead depicted as grey points. This graphic
presentation allows for the clearest placement of the countries according to
the size of their social gap. In addition, the figure is divided into quadrants
based on the value resulting from the two dimensions.
The upper left quadrant corresponds to pessimistic countries with a high
level of economic ill-being (Nicaragua, for example, is part of this group).
The upper right quadrant corresponds to optimistic countries, also with a
high level of economic ill-being (such as the Dominican Republic). In the
lower left quadrant are pessimistic countries with a low level of economic
ill-being (such as Honduras). And in the lower right quadrant are optimistic
countries with a low level of economic ill-being (such as Uruguay and Chile,
which both have narrow social gaps).
These data indicate that the countries with wide social gaps tend to be
economically pessimistic, but not all of them have the same level of ill-being.
All of the countries with narrow social gaps are predominantly optimistic,
and nearly all have low levels of ill‑being, with the exception of Venezuela,
67
Chapter I
Economy and perceptions of well-being
■■
Figure I.31
Latin America (1996-2008): Position of countries as regards
attitudinal factors (optimism-pessimism) by social gap
Social gap :
0.5
Average
Wide
Narrow
Pessimists with high ill-beingo
Optimists with high ill-being
0.4
0.3
High
Nicaragua
Venezuela
zuel (Bol. Rep. of)
Dominican Rep.
Peru
0.2
Ecuador
Factor II
Economic ill-being
0.1
Colombia
Panama
Guatemala
Gua
-0.1
Bolivia
Chile
Mexico
Honduras
-0.2
Low
Brazil
Argentina
El Salvador
0.0
Paraguay
Uruguay
Costa Rica
-0.3
-0.4
Pessimists with low ill-being
Optimists with low ill-being
-0.5
-0.5
-0.4
-0.3
Pessimism
-0.2
-0.1
0.0
0.1
Economic sentiment
0.2
0.3
0.4
0.5
Optimism
Factor I
Source: Latinobarómetro, 1995-2008 and Economic Commission for Latin America and the Caribbean (ECLAC).
precisely where inflation has been very high in recent years. Nearly all of the
countries with average social gaps (with the exception of Mexico) have a high
level of ill-being but are spread out along the optimism-pessimism spectrum.
In the case of Mexico, the level of ill-being is low and the country’s position
on the optimism-pessimism scale is much more balanced. The Mexicans
may modify this moderate position in the 2009 survey, inasmuch as Mexico
is expected to experience the largest economic contraction in Latin America,
of between 7% and 8% of GDP.
The perceptual map presented in figure I.31 shows a group of six
countries in the lower right quadrant, which indicates economic optimism
with low levels of ill-being (Argentina, Chile, Costa Rica, Mexico, Panama and
Uruguay), which contrasts with the five countries in the upper left quadrant,
which indicates economic pessimism with ill-being (Colombia, Ecuador, El
Salvador, Nicaragua and Peru). These positions are an average of the values
for both variables for the entire 1996-2008 period.
68
Latin America in the mirror. Objective and subjective dimensions of social inequity and well-being in the region
2.
Optimism/pessimism by occupational type
In this last section, we analyse variations in the subjective economic sentiment
indicator (Factor 1) according to occupational differences in Latin America.
For this, we use the occupational self-classification question from the survey
(“What type of employment do you have?”). The responses range from
senior management, middle management, independent professionals, salaried
professionals, business owners, employees, self-employed workers and farmers
and fishermen.
Figure I.32 shows that the higher the position in the occupational
structure, the greater the optimism and the lesser the ill-being will be. The
economically active population shown in this figure is clearly divided into two
segments. One segment consists of employees and independent professionals,
as well as senior management, and the other consists of self-employed or
itinerant workers, farmers and fishermen.
Senior management and independent professionals, as well as middle
management, tend to express greater economic optimism and very little illbeing. The latter means they are less sensitive to inflation and unemployment.
Meanwhile, farmers and fishermen, as well as self-employed workers and
■■
Figure I.32
Latin America (1996-2008): Relative position of types of occupation
in economic perceptual dimensions
0.5
High
0.4
0.3
Farmer/fisherfolk
Factor II
Economic ill-being
0.2
Own account/itinerant workers
0.1
Other employed
0.0
- 0.1
Middle management
Business owner
- 0.2
Low
Employed professional
- 0.3
Independent professional
- 0.4
Senior executive
- 0.5
-0.5
-0.4
-0.3
Pessimism
-0.2
-0.1
0.0
0.1
Economic sentiment
Factor I
0.2
0.3
0.4
0.5
Optimism
Source: Latinobarómetro, 1995-2008 and Economic Commission for Latin America and the Caribbean (ECLAC).
69
Chapter I
Economy and perceptions of well-being
employees in the informal sector, are less optimistic and express greater illbeing. It may well be the case that inflation and unemployment have a stronger
impact on these strata, based on these subjective indicators.
The “attitudinal” distance between a senior manager and an itinerant
worker is much greater than the distance found between countries or between
countries grouped by social gap. The first group has higher income, greater
levels of employment stability and more positive economic expectations,
whereas the second group has lower income, greater levels of employment
instability and more negative economic expectations. These differences get
at the heart of inequalities within societies, determined by the type of labour
market integration to which people have access. There are also important
differences within the first group. Middle managers are relatively less optimistic
than senior managers because they have similarly positive expectations with
less income and are more susceptible to employment instability.
Economic attitudes and expectations have an anchor or differentiating
factor in occupation, which tends to be an indicator of social class. Based
on these findings and with occupation taken as a class indicator, it could be
argued that the members of a single class have more homogeneous economic
sentiment levels.
Occupational differences by type of economic activity are more striking
in the countries with average social gaps than in the other two groups of
countries. As illustrated in figure I.33, in the countries with narrow social
gaps, the average position for all occupational segments shown in the figure is
optimistic, and the differences between them are principally along the vertical
axis, which denotes ill‑being.
In contrast, in the countries with wide social gaps, most of the
occupational segments are pessimistic (left of zero on the horizontal axis).
However, several are below zero on the vertical axis, which means they
exhibit relatively low levels of ill‑being. In this case, the vertical axis denoting
employment ill‑being and subjective income is also where the greatest class
differences lie.
The distinctions between occupational segments are most striking in the
countries with average social gaps, and in this group the differences are seen
along both axes, not just one as with the other two groups of countries. The
countries with average social gaps are where occupational differences matter
most, which is to say they are a greater determinant of economic perceptions
in these countries than in the other two groups.
This can be explained by the relative differences in position between
each class and occupational segment. The upper classes in the countries
with wide social gaps are not very optimistic, and the lower classes in the
70
Latin America in the mirror. Objective and subjective dimensions of social inequity and well-being in the region
■■
Figure I.33
Latin America (1996-2008): relative position of the active population in
economic perceptual dimensions, by social gap
0.5
Optimists with high ill-being
Factor II
0.0
Low
Economic ill-being
High
Pessimists with high ill-being
Pessimists with low ill-being
-0.5
-0.5
Optimists with low ill-being
0.0
Negative
Economic expectations
0.5
Positive
Factor I
Source: Latinobarómetro, 1995-2008.
Notes: Red = wide social gap; no colour = average social gap; green = narrow social gap.
countries with narrow social gaps are not very pessimistic. All in all, social
class (represented, in this case, by the simple indicator of occupation) explains
differences in expectations better than other factors, indicating little social
mobility between them. If each social class has a different expectation level
in each society, this means that a change in expectation level requires a change
in social class. Creating an optimistic climate of opinion thus becomes a
structural exercise, whereby in order to change people’s expectation levels,
they must be given access to the various expectation levels already present in
the society in which they live.
The way in which a society is stratified ends up being a determinant
of expectations in one way or another. Where social mobility is greater,
expectation levels are higher. It is the different ways in which societies are
stratified that explains why under similar conditions expectations are so
different. In other words, two societies with similar social gaps but dissimilar
degrees of stratification have different levels of expectations. This can be
71
Chapter I
Economy and perceptions of well-being
exemplified by the case of Costa Rica and Uruguay, which have similar social
gaps, income levels and employment instability, but very different expectation
levels. Uruguay is the most open society in the region, in Sen’s sense, and is
less socially segmented and more homogenous than Costa Rica.
Pessimism in the countries with a wider social gap would be anchored
in social immobility, that is, in the impossibility of gaining access to higher
expectation levels. The “other” factors that we mentioned above when we said
that social gaps did not entirely explain expectation levels, is social class. It is
the social gap within countries, i.e., the stratification of access to expectations
reflected in social class, that explains a large part of the differences.
This has major social policy implications because it indicates that
inequities are rooted in the structure of societies, and in order to dismantle
them, these structures must be transformed.
G. Conclusions
In this chapter, we have examined the relationship between different indicators
of the objective economy and the subjective economy. We have found that
there does tend to be a close relationship between the two measures, which
provides evidence in support of our first working hypothesis: There is a
significant relationship between the subjective economy and the objective
economic conditions in Latin America.
However, the synchronization between these variables tends to be greater
in the countries with narrow social gaps, which provides evidence in support
of our second hypothesis: The relationship between the subjective economy
and the objective economy varies according to the size of the social gap in
the countries, and is stronger in countries with less inequality.
This synchronization makes the impact of growth stronger in the
countries with narrow social gaps, which provides partial evidence in support
of the third hypothesis: In the countries with narrow social gaps, the objective
economy has a greater impact on the subjective economy. However, when
we incorporate the inflation and unemployment data, the strength of the
relationship becomes less clear. Thus, we are limited to concluding that in the
countries with narrow social gaps the correspondence between the objective
and the subjective economy is strong if the factors taken into consideration are
restricted to growth and economic sentiment, which is based on perceptions
of a country’s past, present and future economy.
Lastly, there is evidence that subjective perceptions of the economy
vary significantly depending on occupational type, which supports our fourth
72
Latin America in the mirror. Objective and subjective dimensions of social inequity and well-being in the region
working hypothesis: Economic expectations vary by occupational stratum,
with the highest strata being generally more economically optimistic and
reporting less ill‑being.
In these analyses, we have found that just as there are inequalities in the
objective economy in the countries with narrow and wide social gaps, so too
are there marked differences in their subjective perceptions of the economy.
The correspondence between the objective economy and the perceived
economy is greater in the countries with narrow social gaps, to the extent
that not only is the impact of growth stronger, even though the economy can
be more volatile, but also the countries with narrow social gaps tend to be
more optimistic that those with average and wide social gaps. In this regard,
the distribution of perceptions is unequal.
Moreover, differences according to class or occupational type are also
striking. The upper strata tend to be much more optimistic and are less affected
by the economic burden of insecurity. In addition, the social gap is also a factor
in the distribution of perceptions in a society. The upper strata in countries
with wide social gaps are not as optimistic as the upper strata in countries with
narrow social gaps. This is a further sign that objective inequity also has its
counterpart in subjective perceptions. This may mean that in order to bring
about profound changes in perceptions, structural changes are needed, and
not just changes in discourse or communication policies.
73
Latin America in the mirror. Objective and subjective dimensions of social inequity and well-being in the region
Chapter II
Social gaps and perceptions of inequality
A. Preliminary concepts
In this chapter, the data from household surveys and Latinobarómetro
are conjoined for the purpose of exploring possible relationships between
perceptions of prevailing inequality and social conflict in the population of
Latin America and “objective” indicators of inequity and inter-group conflict.
This exploration is justified not only by an academic interest in merging these
two expressions of reality, but primarily by the need to provide basic inputs to
build a policy agenda that addresses the challenges of designing comprehensive
interventions that simultaneously tackle the different dimensions—economic,
social, political and cultural—of inequality in Latin America.
The analytic strategy used in this section is similar to the one used in
the chapter on economy and perceptions of well-being. First, comparisons
are made at the aggregate level (whether considering general economic and
social development indicators or the classification of countries by social gap),
and then individual countries are analysed, especially in cases where there
are major disparities between objective and subjective indicators, in order
to extract evidence that can be used to generate hypotheses for testing in
subsequent studies. Controls for sociodemographic factors are also conducted,
and comparisons of the different perceptions of inequality are made taking
into account how the respondents categorize their position in the social
structure. The idea underlying this last exercise is that social identity constitutes
a “bridge” variable between the objective socio-economic structure and the
representations/schemes that individuals construct about that reality.
75
Chapter II
Social gaps and perceptions of inequality
■■
Figure II.1
Latin America and other regions (around 2007a): Gini coefficientb
0.7
0.6
0.5
0.4
0.3
0.2
0.1
OECD (22)
Eastern Europe and
Central Asia (25)
Maximum
Southern Asia (5)
East Asia and
the Pacific (12)
Gini
North Africa and the
Middle East (8)
Sub-Saharan
Africa (22)
Americas (20)
United States
and Canada
Latin America (18)
0.0
Minimum
Source: Economic Commission for Latin America and the Caribbean (ECLAC), on the basis of tabulations of household surveys
of the relevant countries; Luxembourg Income Study (LIS), Key Figures [online] http://www.lisproject.org/keyfigures.html; World
Income Inequality Database ( WIID) [online] http://www.wider.unu.edu/esearch/Database/en_GB/database/.
Regional data are simple averages of the most recent figures available for each country in 2000-2007. Given the differences
in the sources, figures are only illustrative.
a
The Gini coefficient ranges between 0 (total equality) and 1 (maximum inequality).
b
■■
Figure II.2
Latin America (1997-2007): inequality
(Gini coefficients)
0.65
0.6
Guatemala
Honduras
Around 2007
0.55
Brazil
Colombia
Bolivia (Plur. State of)
)
Paraguay
Ecuador
0.5
Costa Rica
Nicaragua
Chile
Panama
Peru
Argentina Mexico
El Salvador
Uruguay
0.45
Venezuela (Bol. Rep. of)
0.4
0.4
0.45
0.5
0.55
0.6
0.65
Around 2007
Source: Economic Commission for Latin America and the Caribbean (ECLAC), on the basis of Social Indicators and Statistics
Database (BADEINSO) [online database] http://websie.eclac.cl/sisgen/ConsultaIntegrada.asp?idAplicacion=1.
76
Latin America in the mirror. Objective and subjective dimensions of social inequity and well-being in the region
This chapter is organized as follows: first, a description of inequality
and poverty trends in Latin America between 1996 and 2007 is presented
to give the reader context for interpreting the analyses that follow. Second,
perceptions of inequality and conflict related to social class, ethnic group
and gender are analysed and compared. Next, some objective and subjective
indicators of violence and insecurity in Latin America are explored. Lastly, a
brief analysis of public policy responses is presented, with an emphasis on
identifying the main obstacles in the countries to building a social pact that
paves the way for the sustainable financing of public policies that guarantee
access to essential goods and services for all people in the region.
B. Context: inequality and poverty trends in Latin America
As indicated in previous studies (e.g., see the various editions of Social Panorama
of Latin America, prepared by ECLAC), a persistent characteristic of Latin
America is high levels of inequality in the distribution of income. Latin America
had the most unequal income distribution in the world in 2007 (Gini coefficient
of 0.53), even more than regions with lower per capita income, such as subSaharan Africa1 (see figure 34), despite the fact that inequality levels fell between
1997 and 2007 in most of the countries of Latin America. Of the 17 countries
in the region with available data for 1997 and 2007, 10 saw an improvement in
income distribution. The Bolivarian Republic of Venezuela, Nicaragua, Panama
and Brazil were the countries in which the income distribution improved the
most. Moreover, although Brazil is less unequal in 2007 than in 1997, it continues
to have the worst income distribution in the region.
Although absolute poverty is still a significant problem for the region,
the period between 1997 and 2007 was marked by a downward trend in the
percentage of people without resources to meet their basic needs. At the
aggregate level, in 2007 poverty affected 34% of Latin Americans, a 10%
reduction in absolute terms over 1997. The indigence rate, which is the
percentage of people without sufficient income to meet their food needs,
fell from 19% in 1997 to an average of 13% in 2007. At the country level, a
downward trend in total poverty was observed in 15 countries, with Chile,
the Bolivarian Republic of Venezuela, Mexico and Ecuador experiencing the
sharpest declines in poverty between 1997 and 2007. At the other extreme,
Uruguay was the only country in the region to experience a significant increase
in poverty levels during the period of study, although as of 2007 the country’s
poverty rates continued to be among the lowest in Latin America.
There are also major inequalities in Latin America that affect, in particular,
indigenous and Afro-descendant groups and women, among other groups. Ethnic
minorities experience higher rates of extreme poverty (indigence) than the rest of
1
Latin America’s position could vary slightly if weighted averages were used.
77
Chapter II
Social gaps and perceptions of inequality
Figure II.3
■■
Latin America (1997 and 2007): poverty and indigence rates
(Percentages)
90
79
80
70
69
70
62
60
54
51
50 44
40
37
34
30
24
14
9
7 7
20 23
14
6
8
3
62
55 54
19
48
45
47 45
48
22 21
18 21
39
32
23
22
61 61
53
46
48
39
30
23
13
10
56
47
36
24 21
19
20
31
61
56
32
32
29
29
34 32
22
19
12
12
9
5
29
25
14
10
2
9
3
1997
2007
1999
2006
1997
2007
1996
2007
1996
2006
1997
2005
1997
2007
1997
2007
1997
2004
1998
2006
1997
2007
1996
2006
1998
2005
2007
1999
2007
1997
2007
2000
2007
1997
2007
1997
2007
0
Latin ARG
America
BOL
BRA
CHL
COL
CRI
ECU
SLV
GTM
Poverty
HND
MEX
NIC PAN PRY
PER
DOM URY
VEN
Indigence
Source: Economic Commission for Latin America and the Caribbean (ECLAC), on the basis of Social Indicators and Statistics
Database (BADEINSO) [online database] http://websie.eclac.cl/sisgen/ConsultaIntegrada.asp?idAplicacion=1.
the population (see figure II.4). Indigenous people in Latin America, especially
those in rural areas, are worse off than the rest of the population in indicators of
overcrowding, undernutrition and access to safe drinking water and health services
and, as a result, have higher infant mortality rates. Indigenous groups also have
lower school enrollment and literacy rates than the nonindigenous population,
which constitutes a deficit of human capital that threatens to contribute to the
intergenerational transmission of poverty and social exclusion.
■■
Table II.1
Latin America (2000): infanta and child mortality rates
Mortality Rates
Infant Mortality
Child mortality, < 5 years
Indigenous
Non-Indigenous
Indigenous
Non-Indigenous
Bolivia (Plur. State of)
73.9
53.1
96.2
66.6
Brazil
39.7
33.9
50.0
42.1
Chile
12.8
11.5
15.3
13.6
Costa Rica
20.9
11.4
24.9
13.7
Ecuador
67.6
29.9
93.4
36.9
Guatemala
51.1
41.0
67.2
51.9
Honduras
42.6
34.5
61.4
48.7
Mexico
43.0
26.5
63.8
36.2
Panama
53.4
17.3
73.2
18.9
Paraguay
78.5
37.7
109.2
46.5
Venezuela (Bol. Rep. of)
45.1
19.7
74.5
28.9
Source: Latin American and Caribbean Demographic Centre (CELADE) – Population Division of ECLAC, 2000 Census Round
[online] http://www.eclac.cl/cgi-bin/getProd.asp?xml=/redatam/noticias/paginas/7/13277/P13277.xml&xsl=/redatam/tpl/p18f.
xsl&base=/redatam/tpl/top-bottom.xsl.
a
The infant mortality rate is the probability that a newborn will die before the age of one, and the child mortality rate is the
probability that a newborn will die before the age of five. Both rates are calculated per 1,000 live births.
78
Latin America in the mirror. Objective and subjective dimensions of social inequity and well-being in the region
Despite the advances made in gender equity in recent years in the region,
which are especially evident in the growing parity in access, progression
and completion of the different educational levels by gender,2 there are still
significant barriers preventing women from achieving greater autonomy.
Compared with men, women experience higher rates of poverty (see
figure II.6) and have less economic independence due to their lower rates
of participation in the labour market and their overload of domestic and
caretaking duties. When they participate in the labour force, they get lower
quality jobs for less pay. These problems are exacerbated by gaps in political
representation, an area in which the countries of Latin America are a long
way from achieving gender equity.
Figure II.4
■■
Latin America (1997-2007): indigencea among indigenous
or Afro-descendent populations and the rest of the population
(Percentages)
35
32
30
25
21
20
15
13
32
27
25
19
21
20
18
16
11
12
10
10
7
6
5
2007
1996
5
10
9
5
3 4
0
1999
2007
Bolivia (Plur. State of)
1990
Brazil
2006
Chile
Rest of the population
2002
2007
Ecuador
2002
2007
Panama
1999
2007
Paraguay
Indigenous or Afro-descendent population
Source: Economic Commission for Latin America and the Caribbean (ECLAC), Social Panorama of Latin America, 2008
(LC/G.2402-P), Santiago, Chile, June 2009. United Nations publication, Sales No. E.08.II.G.89.
Figures are for populations in urban areas.
a
2
For more information, see Villatoro (2007).
79
Chapter II
Social gaps and perceptions of inequality
■■
Figure II.5
Latin America (2000): illiteracy ratea and average schooling
of the indigenous and non-indigenous population
(Percentages and years)
12
60
10
50
48
9
8
40
30
26
20
5
6
4
20
13
10
8
28
5
4
18
9
29 5
20
7
38
8
33
5
19
4
10
9
32
6
5
4
4
2
8
8
5
4
9
8
8
6
7
51
7
7
6
2
0
Venezuela
(Bol. Rep. of)
Paraguay
Panama
Mexico
Honduras
Guatemala
Ecuador
Costa Rica
Chile
Brazil
Bolivia
(Plur. State of)
0
Illiteracy among the indigenous population
Illiteracy among the non-indigenous population
Average years of schooling of the indigenous population
Average years of schooling of the non-indigenous population
Source: Economic Commission for Latin America and the Caribbean (ECLAC), on the basis of the 2000 round of
population censuses.
Percentage of people aged 15 and over who state they cannot read or write. Literacy skills are not measured.
a
■■
Figure II.6
Latin America (1997-2007): femininity indexa of poverty by country
110
119
104
117
117
125
116
107
103
Honduras
106
101
103
101
Guatemala
Nicaragua
103
102
El Salvador
Mexico
110
104
100
101
109
106
109
Ecuador
107
109
124
103
107
Brazil
108
107
111
Bolivia
(Plur. State of)
120
110
120
140
129
135
160
80
60
40
20
1997
Venezuela
(Bol. Rep. of)
Uruguay
Dominican
Republic
Peru
Panama
Costa Rica
Colombia
Chile
Argentina
0
2007
Source: Economic Commission for Latin America and the Caribbean (ECLAC), on the basis of Social Indicators and Statistics
Database (BADEINSO) [online database] http://websie.eclac.cl/sisgen/ConsultaIntegrada.asp?idAplicacion=1.
Figures over 100 indicate an overrepresentation of women (more women than men).
a
80
Latin America in the mirror. Objective and subjective dimensions of social inequity and well-being in the region
Figure II.7
■■
Latin America (1995-2007): economic participation ratea of the
urban population, by sex
(Percentages)
100
79
80
79
60
78
52
51
50
47
78
79
52
40
20
0
1995
1998
2001
2004
Women
2007
Men
Source: Economic Commission for Latin America and the Caribbean (ECLAC), on the basis of Social Indicators and Statistics
Database (BADEINSO) [online database] http://websie.eclac.cl/sisgen/ConsultaIntegrada.asp?idAplicacion=1.
Proportion of the economically active urban population aged 15 and over whose work is destined for the production of
economic goods and services in a given period.
a
Figure II.8
■■
Latin America (1997 and 2006): ratio of women’s
to men’s urban wagesa
(Percentages)
100
90
90
89
85
79 79
80
79
70
70
93 91
83 82
93
86
84
91
89
88
83
74
77
74
76
80
94
89
83
77
81
88
84
77
84 86
82
76
68
60
50
40
30
20
10
1997
Uruguay
Venezuela
(Bol. Rep. of)
Peru
Dominican
Republic
Paraguay
Panama
Nicaragua
Mexico
Honduras
Guatemala
El Salvador
Ecuador
Costa Rica
Colombia
Chile
Brazil
Bolivia
(Plur. State of)
Argentina
0
2006
Source: Economic Commission for Latin America and the Caribbean (ECLAC), on the basis of Social Indicators and Statistics
Database (BADEINSO) [online database] http://websie.eclac.cl/sisgen/ConsultaIntegrada.asp?idAplicacion=1.
a
Based on simple averages.
81
Chapter II
Social gaps and perceptions of inequality
C. Perceptions of distributive inequality and conflict
between rich and poor
Latinobarómetro measures the perception of income distribution by asking
the following question: “In your opinion, how fair is income distribution in
your country?” This is the only question available for observing perceptions of
income distribution. Inasmuch as there is no body of theoretical or empirical
research in Latin America on distributive perceptions and the factors that
influence these perceptions (unlike in the developed countries, where quite a
few empirical studies have been conducted),3 this exercise is quite exploratory
in nature and is intended not only to further the research on distributive
perceptions but also to inform public policy.
A first glance at the evolution of perceptions of distributive inequality
in Latin America indicates that perceptions have remained persistently strong
during the 1997-2007 period, with very little fluctuation. In 1997, 80% of
the region’s inhabitants believe income distribution is unfair, a figure that
first rises to 87% in 2002, coinciding with the negative impact of the Asian
crisis, and then dips to 78% in 2007, after five years of sustained growth.
In other words, a crisis and the period of greater prosperity that the region
has experienced over the past 40 years have not significantly affected the
perception of fairness in income distribution.
Thus, perceptions of high levels of distributive inequality coincide, in
aggregate terms, with the high level of objective inequality that exists in Latin
America. This suggests that the public is aware of distributive asymmetries.
However, the low variability in distributive perceptions at the aggregate level
(about half the population said in the three measurements that distribution
is unfair) could be indicating that the perception of distributive injustice has
become a parameter of social life. This idea is related to the postulates of the
pragmatic acceptance of inequality (Mann, 1970), according to which social
asymmetries would be perceived by the public as normal and inevitable and
a just society would not be viable for most of the population.
The aggregate results, however, do not indicate differences by groups
of countries or within them. The immobility observed in aggregate terms
could be the result of increases in some countries (or groups of countries)
and reductions in others cancelling each other out, so it is important to
3
82
For example, Evans (1997) analysed the influence of three models of beliefs in popular explanations
of occupational achievement in England: (1) a class inequality model; (2) a meritocratic view; and (3)
an ideological polarization model, and found that the class inequality model was the best predictor of
occupational achievement explanations. In a factor analysis of questions that measured re-distributive
attitudes in the United States public, two components —a social responsibility component and an
individualism component— were obtained, and the adherents to social responsibility were found to be
poor and less politically active (Bobo, 1991). And in a study that analysed the attitudes of the United States
public toward “economic democracy” and the nationalization of companies, ethnicity was found to be the
most important determinant of preferences regarding egalitarianism and nationalization (Collom, 2001).
Latin America in the mirror. Objective and subjective dimensions of social inequity and well-being in the region
■■
Figure II.9
Latin America (1997-2007): perceived fairness of income distribution
Q: How fair do you think income distribution is in your country?
100
80
29
28
34
60
40
51
50
53
20
0
18
14
5
11
2
4
1997
2002
2007
Very fair
Fair
Unfair
Very unfair
Source: Economic Commission for Latin America and the Caribbean (ECLAC), on the basis of special tabulations of the 1997,
2002 and 2007 Latinobarómetro surveys.
determine what is happening in the relationship between perceptions and
objective inequalities within the countries (this topic will be covered later).
Also of interest are the differences that could result from the position the
subjects occupy in the social structure. In the words of Blau (1977), the social
structure can be conceived as a multidimensional space of positions, or as a
population distribution parametrized by structural variables (e.g., social class,
ethnicity or gender) that provide the context in which individuals acquire
social identities and construct cognitive models that allow them to interpret
and explain social differences.
The most immediate strategy for establishing differences in the perceptions
of distributive justice is comparison by social class, whereby the population
is classified based on control of the resources that bestow power and life
opportunities. In general, social class has been operationalized by the possession
or not of capital and means of production, although recently other resources have
been added, such as control over the labour of others and the possession of scarce
occupational skills (Portes and Hoffman, 2003). However, for methodological4
or conceptual reasons, the preference here has been to take an approach other
than the comparison of distributive perceptions based on “objective” indicators
of social class. People’s perceptions about the justice of the social structure can
be better understood by looking at the position they believe they occupy in that
structure, i.e., their identity or social class position (see box II.1).
4
In the Latinobarómetro survey, the best variable for pinpointing social class position in the traditional
sense is occupation, but this presents problems because in some occupational categories there are
very few cases (e.g., senior managers or independent professionals). In addition, a simple comparison of
the perceptions of distributive justice using the occupational categories available in the Latinobarómetro
study produces very similar results between the different occupation types.
83
Chapter II
Social gaps and perceptions of inequality
Social class identities can be analysed on the basis of two possible approaches
to classification: a relative approach, which refers to the position that an individual
believes he or she occupies in a hierarchical space of positions defined by an
ordinal scale of extreme poverty and wealth, and an absolute approach, which
alludes to the self-classification that subjects perform taking into account a
possible set of situations related to satisfaction of their basic needs. Regarding
the first comparison, figure II.11 illustrates that the percentage of people in Latin
America who believe that distribution is very unfair increases the lower that people
place themselves on the poverty/wealth scale, whereas the percentage of the
population who believes that distribution is very fair or fair increases the higher
the respondents place themselves on the poverty/wealth scale.
■■
Figure II.10
Latin America (1997-2007): perceived fairness of income distribution
and self-placement on the poor-rich scale
Q: How fair do you think income distribution is in your country?
Q: If, on a scale of 1 to 10, level 1 is for the poorest people and level 10 is for the richest people,
where would you place yourself?
40
35
34
35
33
33
29
30
25
20
16
20
22
20
17
28
25
25 25
24
19
15
10
5
0
Poorest
02
03
04
Very fair/Fair
05
06
07
8 a 10
Richest
Very unfair
Source: Economic Commission for Latin America and the Caribbean (ECLAC), on the basis of special tabulations of the 2007
Latinobarómetro survey.
The association between self-placement in the social structure and the
perception of distributive justice is weaker in the countries with wide social
gaps (0.63 in the case of the percentage of the population who believe
distribution is fair/very fair and –0.79 for the percentage of respondents who
say distribution is very unfair) and stronger in those with average social gaps
(see figure II.12). However, if the category for the poorest is eliminated in
the countries with narrow social gaps, the correlations between the position
that individuals assign themselves in the social structure and the perception
of distribution as very fair/fair or very unfair is 0.96 and –0.99, respectively,
which are the strongest correlations among the groups of countries.
84
Latin America in the mirror. Objective and subjective dimensions of social inequity and well-being in the region
■■
Figure II.11
Latin America (2007): perceived fairness of income distribution and self-placement
on the poor-rich scale, by social gaps in the countriesa
(Percentages of the population)
Q: How fair do you think income distribution is in your country?
Q: If, on a scale of 1 to 10, level 1 is for the poorest people and level 10 is for the richest people,
where would you place yourself?
Very unfair
40
37 36
38
33
29
27 28
30
34 33
32 30
32
35
32
29
24 25 26 23
23
25
21 19
20
12
10
0
Large gaps
Medium gaps
Poorest
02
03
04
Small gaps
05
06
8 a 10 (Richest)
07
Very fair or fair
43
40
36
30
30
24
20
28
28
24
21 21 23 22 23
17
13
16
18
21
24
23 23
24
16
17
19
10
0
Large gaps
Poorest
Medium gaps
02
03
04
05
Small gaps
06
07
8 a 10 (Richest)
Source: Economic Commission for Latin America and the Caribbean (ECLAC), on the basis of special tabulations of the 2007
Latinobarómetro survey and Social Indicators and Statistics Database (BADEINSO) [online database] http://websie.eclac.cl/
sisgen/ConsultaIntegrada.asp?idAplicacion=1.
a
For details on the classification of countries by social gaps, see box II.1 in chapter I.
In the countries with narrow social gaps, perceptions of distributive
justice are much more strongly aligned with the positions that individuals
assign themselves in the social structure (with the exception of the group
that places itself at the lowest end of the poverty/wealth scale) than in the
countries with average social gaps and especially in those with wide social gaps.
A possible explanation is that the countries with narrow social gaps have class
85
Chapter II
Social gaps and perceptions of inequality
■■
Figure II.12
Latin America (1997-2007): proportion of people who view income distribution
as very unfair, by subjective assessment of income position and social
gaps in the countries
(Percentages)
Q: How fair do you think income distribution is in your country?
Q: Are your wages and your family’s total income sufficient to cover your needs? Which of these
positions are you in: income sufficient to cover all needs and be able to save; income just sufficient to needs; income insufficient to cover needs, having some difficulties; income insufficient to
cover needs, having great difficulties?
Only includes those who answered “very unfair”
60
54
50
44
40
30
20
27
28 29
24
16
34 35
31
35
22
34
33
18
24 26
26
32
41 42
38
40
37
35
28
16
22 25 22
29 27
23
26
31
26
Income insufficient,
great difficulties
Income insufficient,
some difficulties
Income just
sufficient
Income sufficient
and can save
Income insufficient,
some difficulties
Income sufficient
and can save
Income just
sufficient
Medium gaps
2002
Income insufficient,
great difficulties
Small gaps
1997
Income insufficient,
great difficulties
Income insufficient,
some difficulties
Income just
sufficient
0
Income sufficient
and can save
10
Large gaps
2007
Source: Economic Commission for Latin America and the Caribbean (ECLAC), on the basis of special tabulations of the
1997, 2002 and 2007 Latinobarómetro surveys and Social Indicators and Statistics Database (BADEINSO) [online database]
http://websie.eclac.cl/sisgen/ConsultaIntegrada.asp?idAplicacion=1.
structures that are more differentiated and complex but less polarized from a
distributive point of view, which gives rise to a more robust middle class and
generates more spaces for differentiation processes based on identification
with different social strata. In numbers, the countries with wide social gaps
have an extremely high rate of absolute poverty (an average of 60%) and a
large distance between the top and bottom quintiles of the income distribution
(a rate of 25), while the countries with narrow social gaps have an absolute
poverty rate of 20% and the top and bottom income quintiles are less polarized
(a rate of 13), which creates more room for the middle class.5
A second approach to social class identities is the self-classification that
respondents perform by indicating the degree to which their income is sufficient
5
86
This conjecture of a more robust middle class is supported by data from Portes and Hoffman (2003),
which show that in the countries with wide social gaps, the informal manual‑labour proletariat (workers
in microenterprises, self-employed workers and domestic servants) makes up 53% of the workforce, and
in the countries with average and narrow social gaps, this percentage is 42.4% and 36%, respectively,
with the dominant classes (capitalists, professional/executives and small business owners) occupying
relatively similar proportions (13%, 14% and 15%, respectively). The data from Portes and Hoffman date
to around 1998 and include four countries with narrow social gaps, three with wide social gaps and five
with average social gaps. In calculating the percentage represented by the dominant classes, Chile was
excluded for having an exceptionally high value (25.8%)
Latin America in the mirror. Objective and subjective dimensions of social inequity and well-being in the region
or not sufficient to meet their basic needs. The use of this measure, in addition
to providing a further indicator of social class position, based in this case on
a criterion more closely associated with absolute poverty, makes it possible to
study trends in perceptions of inequality in 1997, 2002 and 2007, controlling
for the perception that the subjects have regarding their socio-economic
situation and for the size of the social gaps in the countries. In this case, the
data in figure II.12 confirm once more that opinions about distributive justice
are associated with the position that the subjects believe they occupy in the
socio-economic structure, and that this correlation is lower in the countries
with wide social gaps, although this is explained primarily by the low level of
association between the two variables in 2002.
In terms of trends, among the population in the countries with narrow
social gaps that reported its economic situation as the worst, the perception
of considerable injustice in income distribution fell 19 percentage points
between 1997 and 2007. The same did not occur in the countries with
wide social gaps. Among the respondents reporting that their income was
not sufficient and they had major problems, perceptions of considerable
distributive injustice increased from 26% in 2002 to 40% in 2007. In the
countries with average social gaps, perceptions of considerable injustice in
the distribution of income increased between 1997 and 2002, only to fall
between 2002 and 2007. In this last group of countries, the lowest level of
variability in distributive perceptions was observed among the population
with the least subjective income.
Thus far, we have analysed perceptions about the degree of distributive
justice in light of the social gaps in the countries, which were established based
on the conditions observed at a point in time (the year 2007), without placing the
variations in these perceptions in relation to changes in the objective indicators
of distributive inequality over time. One of the measures available for these
purposes is the Gini coefficient, which indicates the degree of concentration
throughout the income distribution, unlike the quintile ratio, which is based on
the situation of groups at either extreme of the distribution.6 The joint analysis
of changes in the distribution concentration indicator and in the subjective
measure of distributive injustice reveals convergent and divergent movements
between the two indicators. For example, in the period between 1997 and 2007,
the “objective” and “subjective” indicators improved in four countries and
worsened in another four. In contrast, divergent variations are observed in the
rest of the countries (the Gini coefficient worsens and distributive perceptions
improve, or vice versa). A similar phenomenon occurs upon observing the
changes in both types of indicators for the period between 2002 and 2007.
6
The Gini coefficient is more sensitive to changes in the middle of the distribution than to variations
at the extremes.
87
Chapter II
Social gaps and perceptions of inequality
These data suggest that it is not plausible to expect that a given magnitude
of change in distributive concentration (for example, that which could result
from a specific amount of government transfers to the most vulnerable
groups) will mechanically result in a concomitant variation in perceptions of
distributive justice. An initial possible explanation is that small variations in
Gini coefficients may not be conspicuous enough to bring about substantial
changes in distributive perceptions, which suggests the principle that a
variation in a highly visible aspect of a condition will be a more powerful
driver of change in opinion than gradual alterations in the same condition
(Mosley, 1976; 1978).7
■■
Figure II.13
Latin America (1997 and 2007): changes in the population who think that income
distribution is fair or very fair and Gini coefficients
(Absolute differences)
Changes in the percentage of the population who think income
distribution is fair, 2007-1997
Q: How fair do you think income distribution is in your country?
50
Perception of fairness and Gini improved
Venezuela (Bol. Rep. of)
Perception of fairness improved and Gini worsenedi
40
30
Bolivia (Plur. State of)
20
Ecuador
10
Brazil
- 0.1
- 0.08
- 0.06
Panama
- 0.04
Costa Rica
Argentina
Chile
Mexico - 0.02
Peru
Nicaragua
Colombia
0
0
0.04
0.06
Paraguay
- 10
El Salvador
Perception of fairness improved and Gini worsened
0.02
Uruguay
Honduras
Guatemala
- 20
Gini and perception of fairness worsened
Changes in the Gini coefficient, 2007-1997
Source: Economic Commission for Latin America and the Caribbean (ECLAC), on the basis of special tabulations of the 1997
and 2007 Latinobarómetro surveys and Social Indicators and Statistics Database (BADEINSO) [online database] http://websie.
eclac.cl/sisgen/ConsultaIntegrada.asp?idAplicacion=1.
7
88
Something similar could happen in the case of tax hostility. For more information, see the corresponding
section in this chapter.
Latin America in the mirror. Objective and subjective dimensions of social inequity and well-being in the region
A second possible explanation is that the verification of changes in
distributive perceptions against equivalent variations in concentration indicators
will depend on endogenous factors within the countries (for example, the reference
criteria used by the population to evaluate changes in their economic situation will
not be the same in countries with very different economic and social histories).8
A third hypothesis is that material redistribution is not a sufficient
condition to change distributive perceptions: for that to happen, there must
also be a redistribution of symbolic goods such as dignity, recognition, and
opportunities for influencing and controlling the decisions that are important
to people’s lives. The perception of distributive injustice is thus part a
broader set of perceptions of inequality. Therefore, in order to bring about
a comprehensive change in perception, much more is required than changing
a single dimension of inequity. Economic goods are only one component of
the expectations of change in inequalities: the other is political goods.9
An initial exploration of the situations of the countries where objective
and subjective indicators of inequality improved simultaneously suggests that
the hypothesis related to the redistribution of symbolic goods has some validity.
In fact, the Bolivarian Republic of Venezuela and the Plurinational State of
Bolivia, two of the countries where reductions in income concentration
and improvements in distributive perceptions were observed between 2002
and 2007, share a recent history of social movements and institutional
adjustments through which material and symbolic goods were redistributed
to the most vulnerable population. In the Bolivarian Republic of Venezuela,
the social missions have been used to sell food at subsidized prices to nearly
half of the country’s population, to conduct mass literacy campaigns, and
to provide primary health care, among other benefits.10 The mechanisms of
8
9
10
The incidence of these factors specific to the histories of the individual countries can be illustrated by
commentary made by Roberts (2004) on the effects of the 2001-2002 economic crisis in Uruguay and
Argentina. The author indicates that, in comparison with Brazil, Central America, Mexico and Peru, the
middle classes in Argentina and Uruguay are confronting a deterioration in living standards in the context
of a memory of much better times. The urban populations of many Latin American countries, in contrast,
have no golden benchmarks in the past with which to evaluate present crises.
Political goods are intangible goods that partly determine the degree of an individual’s inclusion in society.
The perception of citizenship is a political good, as is access to information, opportunities, etc.
According to D’Elia (2006), the missions were established in 2003 to serve the country’s low-income
sectors in areas where there were considerable social policy deficits. These missions came on the scene
at a time of extreme political polarization, the low points of which were the coup d’etat in April 2002,
the petroleum strike of December 2002 and the referendum of August 2004. The largest missions are:
Barrio Adentro (primary health care); Misiones Robinson I and II (literacy and primary education), Ribas
(secondary education), Sucre (higher education), Mercal (food supply: in September 2008, it distributed
food to 48% of the country’s population); Vuelvan Caras (training in production and cooperativism) and
Hábitat (land, housing and urban projects). D’Elia correctly states that the missions should be analysed
from a sociopolitical viewpoint but goes on to criticize them for the way they are run, arguing that “the
political objectives of the government actors are openly channeled through them” and that “the missions
have become instruments … to support the government’s lines of activity” (pp. 9-10). The question is
whether any social program in Latin America has operated entirely independently of the political objectives
of the governments.
89
Chapter II
Social gaps and perceptions of inequality
participatory or even direct democracy should also be mentioned.11 Kornblith
(2007) indicates that between 1999 and 2007 some of the instruments of
direct democracy set forth in the 1999 Constitution were activated, and three
national consultative referendums (1999 and 2000) and one presidential recall
referendum (2004) were held.
The Plurinational State of Bolivia is perhaps a better example, since in
that country distributive concentration declined, but less than in the Bolivarian
Republic of Venezuela. In particular, the improvement in distribution
perceptions could be linked to the attention paid to the social and political
demands of movements of farmers and urban residents, focusing on the
symbolic recognition of indigenous peoples and the demands for greater State
control over natural resources such as gas and oil. The milestones in the recent
history of the Plurinational State of Bolivia include the nationalization of gas
and oil and the convening of a Constituent Assembly, which were initiatives
taken by a transitional government in 2005. In 2006, the first indigenous
President in Bolivia’s history took office, elected on a platform which included
State control of natural resources, constitutional reform and revision of land
policy. The same year saw the adoption of the Hydrocarbons Law, which puts
Yacimientos Petrolíferos Fiscales Bolivianos (YPFB) in charge of prices and
production for the domestic and foreign market and at the end of 2007 the
first draft was adopted of the new Political Constitution recognizing Bolivia
to be a Plurinational State.
Developing the hypothesis of redistribution of symbolic goods, figure
II.14 shows trends in distributive justice perceptions between 1997 and 2007,
with comparisons based on the self-classification by subjects of their socioeconomic situation but dividing countries into two groups: one consisting of
the Bolivarian Republic of Venezuela and the Plurinational State of Bolivia
and one consisting of the other countries of the region. As can be seen, the
improvement in distributive perceptions was much greater in the Bolivarian
Republic of Venezuela and the Plurinational State of Bolivia than in the “rest of
Latin America”. In fact, in the latter group of countries, the lines representing
the percentages of people who believe that distribution is very unfair and
the proportion of subjects who are of the view that distribution is very fair/
fair generally remain parallel over the entire period studied and this is more
noticeable among the people lower on the socio-economic ladder. Although
between 1997 and 2007 there was an improvement in distributive perceptions,
this change basically occurred among the people at the bottom of the socio
11
90
The concept “participatory democracy” is midway between “direct democracy” and “representative
democracy.” In participatory democracy, political mechanisms are sought that allow the entire population
to participate in political decision-making. Laws are enacted that require the government to organize
public consultations and take into account the decisions of local assemblies and councils. For more
information, see: http://www.institut-gouvernance.org/fr/conference/fiche-conference-34.html.
Latin America in the mirror. Objective and subjective dimensions of social inequity and well-being in the region
■■
Figure II.14
Latin America (1997-2007): proportion of people who view income distribution
as very unfaira, by subjective assessment of income positionb
and social gaps in the countries
(Percentages)
Q: How fair do you think income distribution is in your country?
Q: Are your wages and your family’s total income sufficient to cover your needs? Which of these
positions are you in: income sufficient to cover all needs and be able to save; income just sufficient to needs; income insufficient to cover needs, having some difficulties; income insufficient to
cover needs, having great difficulties?
Venezuela (Bol. Rep.of) and Bolivia (Plur. State of)
60
59
44
50
44
40
30
28
24
21
13
8
40
27
23
24
20
10
24
39
31
11
12
22
15
17
12
15
14
0
1997
2002
2007
Income sufficient
and can save
1997
2002
2007
1997
Income just sufficient
2002
2007
1997
Income insufficient,
some difficulties
Very fair/Faira
2002
2007
Income insufficient,
great difficulties
Very unfair
Rest of Latin America
60
46
50
40
37
30
28
20
10
19
26
25
24
23
31
32
38
31
27
20
13
16
41
36
16
16
15
11
11
11
0
1997
2002
Income sufficient
and can save
2007
1997
2002
2007
Income just sufficient
Very fair/Faira
1997
2002
Income insufficient,
some difficulties
2007
1997
2002
2007
Income insufficient,
great difficulties
Very unfair
Source: Economic Commission for Latin America and the Caribbean (ECLAC), on the basis of special tabulations of the 1997,
2002 and 2007 Latinobarómetro surveys and Social Indicators and Statistics Database (BADEINSO) [online database] http://
websie.eclac.cl/sisgen/ConsultaIntegrada.asp?idAplicacion=1.
economic structure12 (in the group with insufficient income experiencing major
difficulties, the opinion that distribution is very unfair dropped 8 points and the
perception that distribution is very fair or fair increased by 5 points).
12
Which may to some extent reflect the fact that, in most of the countries in the “rest of Latin America”,
the social policies implemented were limited to the poorest people.
91
Chapter II
Social gaps and perceptions of inequality
On the other hand, in the Bolivarian Republic of Venezuela and the
Plurinational State of Bolivia, the lines representing the proportion of people
stating that distribution is very unfair and the percentage of people expressing
the view that distribution is very fair/fair tend to converge in 2002, and then
the two positions are reversed in 2007. This means that, in all conditions
of self-classification in the socio-economic structure, the percentage of
respondents stating that distribution is very fair/fair in 2007 exceeds the
proportion of respondents who think that distribution is very unfair. Another
way of looking at the data is to compare the two groups of countries using the
groups at both ends of the socio-economic self-classification. For example, in
the Bolivarian Republic of Venezuela and the Plurinational State of Bolivia, the
perception that distribution is very unfair among persons who state that their
income is insufficient and who are experiencing major difficulties declined
sharply between 1997 and 2007, from 44 per cent to 15 per cent, while in
the rest of Latin America, this decline was considerably less significant, from
46 per cent to 38 per cent. In turn, the percentage of people believing that
distribution is very fair or fair increased, in the group of persons who have
sufficient income and who live in the Bolivarian Republic of Venezuela or
the Plurinational State of Bolivia, from 13 per cent in 1997 to 59 per cent in
2007, while in the rest of the region this percentage, although it increased
in 2002 and 2007, was lower in 2007 than in 1997 (26 per cent and 37 per
cent respectively).
However, these data do not provide solid empirical proof of the
hypothesis of redistribution of symbolic goods. Indeed, the changes in
distributive perceptions were most marked in the Bolivarian Republic of
Venezuela, the country which had the largest change in the Gini coefficient
over the period studied, and least marked in the Plurinational State of Bolivia.
Thus some of the variations in distributive justice perceptions in the Bolivarian
Republic of Venezuela could be attributed to the redistribution of material
goods and to objective processes of improvement in the living conditions of
major segments of the population. It is also plausible, however, that factors
exogenous to material distribution may play a role and, as stated above, a good
illustration of this is the example of the Plurinational State of Bolivia.
It has thus been seen that perceptions of distributive inequality are very
high in Latin America and their evolution must be understood both in the light
of the socio-political trends found in the various countries of the region and
as a function of the changes in objective indicators of income concentration.
In addition, the fact that perceptions of socio-economic inequality consistently
vary depending on class positioning highlights the lack of agreement regarding
inequalities in societies and reflects, at least in terms of public perceptions,
the persistence of tension connected with social class.
92
Latin America in the mirror. Objective and subjective dimensions of social inequity and well-being in the region
The high levels of class tension perceived by the population of Latin
America can be appreciated if they are compared with the levels found in
developed countries. In the 2003 European Quality of Life Survey, there is
a question similar to one used in Latinobarómetro 2007, asking about the
amount of tension existing between poor and rich people, management
and workers, men and women and different ethnic and racial groups (see
figure II.15). In fact, the pattern of tension in Latin America is similar to that
of Eastern Europe13 - which is not surprising considering that both regions
are in a state of transition to higher levels of development - and is different
from the pattern in Western Europe.14 In the first two regions, the types of
tension mentioned most frequently are between poor and rich people and
between management and workers, while in Western Europe the greatest
tension is ethnic (probably because of immigration15).
■■
Figure II.15
Latin America, Eastern Europe and Western Europe (2003-2007):
perceptions of tensiona between social groups
(Percentages)
Q: Is the tension between rich and poor, between companies and workers, between men and
women, and between people of different races very high, high, low or nonexistent?
100
80
80
76
60
60
53
43
39
40
27
27
20
12
44
34
12
0
Rich/poor
Companies/workers
Latin America
Western Europe
Men/women
Different ethnic groups
Eastern Europe
Source: Economic Commission for Latin America and the Caribbean (ECLAC), on the basis of special tabulations of the
2007 Latinobarómetro survey and European Foundation for the Improvement of Living and Working Conditions (Eurofound),
“European quality of life survey (EQLS) 2003 main findings” [online] http://www.eurofound.europa.eu/areas/qualityoflife/
eqls/2003/eqlsfindings.htm, 2009.
In Latin America, the percentage is based on the sum of those who feel that the tension is high or very high. In Eastern and
Western Europe, the figures correspond to the percentage of people who feel that there is “a lot of tension” between the
corresponding social groups.
a
13
14
15
Eastern Europe incluyes: Greece, the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland,
Slovakia, Slovenia, Bulgaria, Romania and Turkey.
Western Europe includes: Austria, Belgium, Denmark, Finland, France, Germany, Ireland, Italy, Luxembourg,
the Netherlands, Portugal, Spain, Sweden and the United Kingdom.
The fall of the Berlin wall resulted in considerable migratory flows, in addition to flows from the African
countries. The integration of these ethnic groups in developed European societies has created - and is
creating - new social cleavages and tension.
93
Chapter II
Social gaps and perceptions of inequality
According to studies derived from the World Values Survey, Western
Europe has prioritized “postmodern” issues, including migration16 and
environmental concerns (Inglehart, 1997), and this redefined patterns of
political party competition (Kitschelt, 1995), whereas in Latin American societies
traditional tensions persist (Inglehart 1997; Moreno 2005). It is also noteworthy
that, in Latin America, references to tension between men and women come
in third place, whereas in Eastern Europe17 and Western Europe this type of
tension is less important for public opinion. Other differences between Western
Europe and Latin America, which reflect the greater tension perceived in the
Latin American population, are the fact that on the old continent the population
supports self-expressive values to a greater extent and has higher levels of trust
and tolerance (Inglehart 1997, 2007; Moreno 2005).
Unlike what is observed in the case of opinions regarding distributive
justice, perceptions of tension between rich and poor people inside the
countries of Latin America do seem to correlate with the degree of distributive
concentration in the countries. This link can be verified using the data given
in figure II.16, which show, for example, that in countries with low levels
of income distribution concentration (especially the Bolivarian Republic
of Venezuela and Uruguay) perceptions of tension between rich and poor
people are the lowest, and that in some countries with the highest levels
of inequality (Brazil, Colombia and Honduras) a large percentage of the
population is of the view that there is very strong or strong tension between
rich and poor people.
There are also instances in which the two variables do not correlate, such
as the case of Guatemala, where the perception of tension is lower than would
be expected in view of its high level of objective inequality, or of Ecuador
and the Dominican Republic, where exactly the opposite occurs.
■■
Box II.1
Theories about social identity
Much of the psychological research on social identity adopted a cognitive
approach, with emphasis on the ways in which human beings process and store
information. These theories are based on the following assumptions: 1) human
cognitive capacities are limited; 2) we process information as “cognitive misers”,
streamlining information to manage the demands of everyday interaction; and 3)
following from this need for cognitive efficiency, we automatically categorize and
associate information about people, objects and situations before we engage
inferential processes (Howard, 2000; Downs, 1957).
16
17
94
Ethnic tension connected with migration may involve traditional class cleavage, since in the Western
European countries immigrants tend to be situated at the bottom of the distributive pyramid.
This result may, in the case of countries which prior to the collapse of the Soviet Union were within its
sphere of influence, reflect women’s high levels of access to education and incorporation in the world of
work (and also the expansion of child care facilities, greater use of contraceptives, etc.).
Latin America in the mirror. Objective and subjective dimensions of social inequity and well-being in the region
Box II.1 (concluded)
According to considerable evidence obtained in laboratory experiments, we
automatically divide people into in-groups (ourselves) and out-groups, to which
we attribute less favorable characteristics. Respondents prefer the members of
their group and favour them in the distribution of opportunities. In addition, people
build stereotypes based on group membership and process information in ways
that help them to maintain their stereotypes. Exposure to attributes connected
with certain social categories may automatically activate the stereotypes and
influence behaviour (Reskin, 2002).
The cognitive social identity theory analyzes the degree to which individuals
identify themselves in terms of group memberships. Social identities provide status
and promote self-esteem. Since people are motivated to evaluate themselves
positively, they tend to give a good evaluation of the groups to which they belong
and to discriminate against groups which are threatening to their social identity.
This process is challenging for members of stigmatized groups, who try to evaluate
the distinctive attributes of their in-group as being less negative, to describe their
in-group more favourably in other respects, or to compete with the out-group
to change group hierarchies (Tajfel and Turner, 1986). Cognitive processes are
also involved in identity maintenance and change. Ascriptive processes (opinions
regarding responsibility for a result) are also relevant here.
Schemas, abstract organized packets of information, are the cognitive version
of identities. Group schemas include organized information on social positions
and stratification parameters such as gender, race or class. Schemas are not only
perceptual phenomena; they may serve as explanatory devices and justifications
of social relations (Tajfel, 1981). Similarly, cognitive structures and processes
were part of the theory of Moscovici (1981) on social representations, in which
cognitive structures are interchanged, originated and developed collectively,
through social interaction and communication.
For their part, interactionist approximations may be classified according to
their emphasis on the structure of identity or on the processes and interactions
by which identities are constructed. Structural approximation is based on the
concept of role identities, or the character that a person develops as the occupant
of a specific social position, linking social structures to people (Stryker, 1980).
Role identities are organized hierarchically, on the basis of their prominence or
the degree to which people are committed to them, which in turn will depend on
the extent to which such identities are related to our ties with other people.
With rare exceptions, class as social identity has been ignored in psychology
literature. And the proliferation of analyses of identities based on a particular social
position (gender, race, class, sexuality, etc.) has led to a chorus of demands for
analysis of the ways in which the different identities intersect (Howard, 2000).
Source: Economic Commission for Latin America and the Caribbean (ECLAC).
95
Chapter II
Social gaps and perceptions of inequality
■■
Figure II.16
Latin America (2007): perceptions of high tension between
rich and poor and the Gini coefficient
Q: Is the tension between rich and poor, very high, high, low or nonexistent?
R Sq linear = 0.23
95
Ecuador
High tension between rich and poor
90
Dominican Republic
Colombia
85
Bolivia (Plur. State of)
Peru
El Salvador
80
Costa Rica
Chile
Nicaragua
Argentina
Brazil
Honduras
Paraguay
75
Guatemala
Mexico
70
Venezuela (Bol. Rep. of)
Uruguay
Panama
65
0.45
0.50
0.55
0.60
Gini coefficient 2007
Source: Economic Commission for Latin America and the Caribbean (ECLAC), on the basis of special tabulations of the 2007
Latinobarómetro survey and Social Indicators and Statistics Database (BADEINSO) [online database] http://websie.eclac.cl/
sisgen/ConsultaIntegrada.asp?idAplicacion=1.
D. Ethnicity-based perceptions of discrimination and tension
One area in which inclusion policies are needed in Latin America is the
economic, social and symbolic integration of culturally different groups,
such as indigenous peoples and Afro-descendants. As regards ethnicity, the
terms “multiculturalism” and “pluriculturalism” have been used to illustrate
the situation of countries in which different ethnic/racial groups coexist
and there is a culture which differs from the one that is dominant within the
national borders. The problems of material and symbolic exclusion affecting
indigenous peoples are an obstacle to their enjoyment of civil, economic,
social and cultural rights. It is therefore essential to recognize, promote and
guarantee the fundamental rights of ethnic and cultural minorities, so that
their members can become autonomous and socially integrated and can be
full-fledged citizens (ECLAC, 2007).
Several authors maintain that the inequalities affecting indigenous
peoples and Afro-descendants in Latin America reflect the persistence in
the region of a system of stratification based on superimposed hierarchical
distinctions of class/caste, which originated in the colonization processes
and in the inclusion first of the indigenous communities and then of the
96
Latin America in the mirror. Objective and subjective dimensions of social inequity and well-being in the region
Afro-descendent population in the lower strata of that hierarchical system
(Mann, 2004; Hoffman and Centeno, 2003; Kaztman, 2007). At the symbolic
level, it should be noted that the ethnic categories on the bottom rung of the
hierarchy are socially constructed classifications and, as such, are broad and
marked by the contexts in which they were created or appropriated. In Latin
America, ethnic identities (including mixed races or recategorizations such
as mestizaje), were the result of class status, area of residence and individual
adaptation strategies and also became a means for voicing demands and
achieving group goals, including at a very general level such as the creation
and recognition of national States.
An initial strategy for understanding the relationship between “objective”
indicators of multiculturalism and subjective measurements of discrimination
against indigenous and Afro-descendent peoples is to compare the degree
of ethnolinguistic fractionalization (for more detail, see box II.3) existing
in the countries of Latin America —or the probability that two persons
selected at random from the population of the same country belong to
different ethnolinguistic groups— with public perceptions as to which
persons/social groups suffer most from discrimination in the country. As
will be seen from figure II.17, perceptions that the indigenous peoples and
the Afro-descendent population —the ethnic minorities18— are the groups
suffering most from discrimination increase in proportion to the increase in
ethnolinguistic fractionalization. This shows more clearly for 2001 and less
clearly for 2008. The correlation between the degree of ethnic fractionalization
and the perception that the racial minorities are the social groups suffering
most from discrimination was less in 2008 than in 2001 (Pearson’s correlation
coefficients of 0.69 and 0.80, respectively).
The weakening of the association between fractionalization and
perception of ethnic minorities as the groups suffering most from
discrimination may be attributed to the fact that between 2001 and 2008,
in most of the countries of the region, there was a decrease in the number
of people believing that indigenous or Afro-descendent people were the
groups suffering most from discrimination. Perhaps the progress made in
recent years in some countries (for example, constitutional recognition and
social programmes targeting these segments of the population) may have
been influential. However, it is not possible to be categorical in this regard.
In any case, the countries with the largest declines include some with high
levels of fractionalization, such as Peru, Guatemala and Ecuador (reduction
of 36, 17 and 12 percentage points, respectively) and others, such as Mexico,
the Bolivarian Republic of Venezuela, Brazil and Chile with moderate or low
18
The concept of minorities is used here in a sociological and not a statistical sense.
97
Chapter II
Social gaps and perceptions of inequality
■■
Figure II.17
Latin America (2001 and 2008): perception of the most discriminated against
social groups and ethnolinguistic fractionalization
Q: In your opinion, which people or social groups are most discriminated
against in your country, or are no groups discriminated against?
2001
31
40
31
37
22
19
9
15
15
Costa Rica
Honduras
50
49
52
53
54
39
40
40
32
11
11
8
14
6
Honduras
2
Costa Rica
Poor
40
Argentina
Ecuador
Panama
Bolivia
(Plur. State of)
Guatemala
Peru
70
34
9
Ethnic minoritiesao
49
Argentina
18
0
53
Uruguay
27
51
45
60
51
50
Uruguay
53
53
38
Chile
46
27
Chile
51
31
El Salvador
20
59
21
40
45
55
20
29
24
21
40
33
Nicaragua
27
31
23
Venezuela
(Bol. Rep. of)
37
33
Brazil
16
22
30
Mexico
60
29
11
Colombia
16
80
Paraguay
100
Others/none
2008
100
Ecuador
Panama
Bolivia
(Plur. State of)
Peru
19
55
76
41
37
34
23
25
25
Ethnic minoritiesao
47
39
Poor
38
11
6
23
1
El Salvador
41
42
Nicaragua
47
20
41
32
47
49
38
Venezuela
(Bol. Rep. of)
42
20
29
Brazil
29
28
27
48
40
0
23
Colombia
29
25
Mexico
60
29
Paraguay
33
Guatemala
80
40
Others/none
Source: Economic Commission for Latin America and the Caribbean (ECLAC), on the basis of special tabulations of the 2001
and 2008 Latinobarómetro surveys and Alberto Alesina and others, “Fractionalization”, Journal of Economic Growth, vol. 8,
No. 1, 2003.
Note: Ethnic minorities include indigenous populations, Afro-descendants and people of mixed race. Most refer to indigenous
and Afro-descendent people. The classification of countries according to their ethnolinguistic fractionalization is based on
Alesina and others (2003). For further details, see box II.2.
levels (reductions of 28, 23, 12 and 11 points, respectively). On the other
hand, in the Plurinational State of Bolivia the reduction was only 4 percentage
points, which casts doubt on the hypothesis of redistribution of symbolic
goods stated above. For their part, Panama and Paraguay showed an increase
in the percentages of the population who believe that ethnic minorities are
the groups suffering most from discrimination, while in Colombia, Costa
Rica, El Salvador and Argentina there were hardly any changes between
2001 and 2008.
98
Latin America in the mirror. Objective and subjective dimensions of social inequity and well-being in the region
The “coming out”of increasing numbers of homosexuals, the group
suffering most from discrimination in 2008, compared with 2001 (in 12 out
of 17 countries in Latin America, this increase was more than five percentage
points), is an issue that falls outside the scope of this study, but this trend may
well have resulted in greater prominence on the public agenda of topics related
to discrimination against homosexuals. In this connection, the small amount
of research conducted on this question in the region has revealed generational
shifts in values towards greater self-expression and, simultaneously, greater
acceptance (or less rejection) of homosexuality (Moreno, 2005; Basáñez and
Moreno, 2008; Inglehart and Welzel, 2005). As a result, these topics have
appeared in the platforms and programmes of political parties, principally
left-wing parties, and laws have been adopted allowing same-sex civil unions,
as was the case in Mexico City at the end of 2006, when the local Assembly
adopted a law on the subject.
Between 2001 and 2008, there was some increase in Peru, Mexico, Brazil
and Panama in perceptions that the poor are the social group suffering most
from discrimination. In the first three countries, the poor replaced ethnic
minorities as the group suffering most from discrimination, while in Panama the
change resulted from a reduction in the percentage of responses under “Other
—there are no groups suffering from discrimination”. Over and above individual
country trends, the fact that the poor are perceived in many countries of the
region as the social group suffering most from discrimination demonstrates
the need for more inclusive and multi-dimensional social policies.
Figure II.18 shows perceptions regarding the social groups suffering
most from discrimination in 2001 and 2008, but controlled by ethnic selfidentification. The trend towards a reduction in the percentage of persons who
believe that ethnic minorities are the ones suffering most from discrimination
is maintained in all conditions of self-identification by ethnicity, but with
differences depending on the fractionalization of countries: the reductions
were greater in countries with low and particularly moderate levels of
fractionalization, while in the nations that are most ethnolinguistically
heterogeneous the reduction was smaller. In addition, ethnic identification had
more influence on perceptions regarding the social groups suffering most from
discrimination in 2001 than in 2008: in fact, in 2001, the number of references
to racial minorities as the groups suffering most from discrimination was
higher among persons identifying themselves as indigenous or Afrodescendent
and residing in countries with high and moderate levels of fractionalization
than among the other groups that had identified themselves ethnically. On the
other hand, in 2008 this situation persisted only in the most ethnolinguistically
heterogeneous countries.
A second strategy for comparing the objective and subjective
indicators measuring ethnicity issues is to explore the relationship between
99
Chapter II
Social gaps and perceptions of inequality
■■
Figure II.18
Latin America (2001 and 2008): perception of the most discriminated
against social groups by self-identification of ethnicity
and ethnolinguistic fractionalizationa
Q: In your opinion, which people or social groups are most discriminated
against in your country, or are no groups discriminated against?
2001
18
19
26
31
20
29
33
30
56
50
Indigenous
and Afrodescendent
people
People of
mixed race
39
47
41
Whites
26
35
Indigenous
and Afrodescendent
people
High fractionalization
People of
mixed race
29
40
40
40
44
36
35
Whites
20
Poor
37
16
Indigenous
and Afrodescendent
people
Moderate fractionalization
Ethnic minorities
48
People of
mixed race
15
Whites
Low fractionalization
Others/none
2008
24
29
30
35
46
Indigenous
and Afrodescendent
people
27
47
42
34
40
37
50
52
60
39
36
34
People of
mixed race
Whites
19
18
Indigenous
and Afrodescendent
people
High fractionalization
People of
mixed race
40
41
23
Whites
9
Indigenous
and Afrodescendent
people
Moderate fractionalization
Ethnic minorities
Poor
38
33
7
People of
mixed race
10
Whites
Low fractionalization
Others/none
Source: Economic Commission for Latin America and the Caribbean (ECLAC), on the basis of special tabulations of the 2001
and 2008 Latinobarómetro surveys and Alberto Alesina and others, “Fractionalization”, Journal of Economic Growth, vol. 8,
No. 1, 2003.
For further details on the classification of countries according to their ethnolinguistic fractionalization, see box II.2.
a
fractionalization and the tension perceived between persons of different races.
Alesina and others (2003), referring to the case of several African countries,
note that ethnic conflictuality19 may be decisive in countries’ political economy,
since it may lead to instability, problems of institutional quality and poorly
19
100
Attributed by Alesina and others (2003) to the absurd borders left by the colonizers.
Latin America in the mirror. Objective and subjective dimensions of social inequity and well-being in the region
designed public policies. They add that a sufficient body of literature exists in
the United States showing that, in ethnically more fragmented communities,
the delivery of public goods is less efficient and there is less trust.20
In this connection, one question to be elucidated is that of the differences
between ethnic groups with a greater potential for tension in the Latin
American context. In fact, one of the risks of developing a measurement of
fractionalization is that groups which are not antagonic are disaggregated;
at the regional level, this may be related to linguistic frontiers. One example
is Paraguay, where much of the total fractionalization is due to linguistic
differences and where perceptions that ethnic groups suffer most from
discrimination are far below those found in countries with a similar total
fractionalization. Accordingly, the fractionalization indicator was broken down
into two measurements —one expressing ethnic differences and one showing
linguistic differences— and the two values were correlated with perceptions
about the groups suffering most from discrimination. This exercise showed that
ethnic fractionalization works better than linguistic fractionalization in the Latin
American context; the coefficients of correlation with perceptions that ethnic
groups suffer most from discrimination were 0.75 and 0.3521 respectively.
Figure II.19 illustrates perceptions of tension between people or
groups of different races and exclusively ethnic fractionalization. As the
ethnic heterogeneity of countries increases, perceptions of tension between
people of different races increase (r-squared of 21 per cent, standardized beta
coefficient of 0.513). The relationship stands the test in those countries whose
values provide leverage in association measurements. In fact, if we remove the
Plurinational State of Bolivia —the country with the most leverage (0.15)— the
correlation is less but does not disappear (Pearson’s r correlation of 0.42). The
largest deviations are for Argentina, Chile and Costa Rica: in these countries,
perceptions of tension between persons of different races are greater than
would be expected in view of their levels of ethnic fractionalization.
When ethnic self-identification is introduced as a control factor, it is
seen that both for the population declaring that it belongs to the indigenous
peoples and among persons who define themselves as white, the perception
of racial tension increases as countries’ ethnic diversity increases. The same
does not occur in the case of individuals who identify themselves as mestizos
or mulattos, since in this case the perception of tension between persons of
different races is much stronger only in countries with a high level of ethnic
fractionalization. The Afro-descendent population is a special case, since
it has a very high perception of racial tension even in countries with a low
20
21
This could be due more to social exclusión and poverty, but this is beyond the scope of this book.
Average correlation coefficients between 2001 and 2008.
101
Chapter II
Social gaps and perceptions of inequality
Figure II.19
■■
Latin America (2008): perception of high tension between different
races and ethnic fractionalizationa of the country
Q: Is the tension between people of different races very high, high, low or nonexistent?
Only includes those who answered “high” or “very high”
0.9
Bolivia (Plur. State of)
Tension between different races
0.8
Argentina
0.7
0.4
Colombia
Panama
Dominican Republic
El Salvador
Honduras
Paraguay
0.5
Peru
Brazil
Mexico
Costa Rica
Chile
0.6
Guatemala
Ecuador
Venezuela (Bol Rep. of)
Nicaragua
Uruguay
0.3
0.2
0
0.1
0.2
0.3
0.4
0.5
0.6
0.7
0.8
Ethnic fractionalization
Source: Economic Commission for Latin America and the Caribbean (ECLAC), on the basis of special tabulations of the 2008
Latinobarómetro survey and Alberto Alesina and others, “Fractionalization”, Journal of Economic Growth, vol. 8, No. 1, 2003.
Only ethnic, and not linguistic, fractionalization is taken into account. For further details, see box II.1.
a
■■
Figure II.20
Latin America (2008): perception of high tension between different races by
self-identification of ethnicity and ethnic fractionalization of the country
Q: Is the tension between people of different races very high, high, low or nonexistent?
Q: What race do you consider yourself to belong to?
Only includes those who answered “high” or “very high”
75
70
71
73
71
71
67
66
64
Indigenous
Mestizo
Black
58
Mulatto
High
Low
55
High
Low
High
Moderate
Low
High
Moderate
Low
High
Moderate
Low
50
60
60
56
55
Moderate
63
60
Moderate
65
71
71
White
Source: Economic Commission for Latin America and the Caribbean (ECLAC), on the basis of special tabulations of the 2008
Latinobarómetro survey and Alberto Alesina and others, “Fractionalization”, Journal of Economic Growth, vol. 8, No. 1, 2003.
102
Latin America in the mirror. Objective and subjective dimensions of social inequity and well-being in the region
level of ethnic heterogeneity. This could be influenced by the very unequal
membership of the groups, promoting ascriptive inequality, since the members
of statistical minorities (in this case, Afro-descendants) would be particularly
visible to the majorities (Blau, 1997; Reskin, 2002).
Lastly, figure II.21 shows perceptions of racial discrimination linked
to possibilities of obtaining work and of being promoted. Here we see
that the percentage of persons who believe that a non-white person has
fewer possibilities of being recruited and promoted in a job is highest in
the most populated areas of the countries with the lowest levels of ethnic
fractionalization, which again supports the hypothesis of the effect of the
unequal membership of groups. This is confirmed by the fact that in the most
fractionalized countries the percentage of people who believe that a nonwhite person has less employment opportunities than a white person increases
with the size of the city where the respondents live (assuming that ethnic
minorities, and especially indigenous populations, account for a larger share
of the population in rural than in urban areas). However, the trend towards
increased labour discrimination perceived in the more populated areas is not
maintained in countries with a moderate level of fractionalization.
■■
Figure II.21
Latin America (2008): perception of discrimination in the labour market
against non-white persons, by city size and ethnic
fractionalization of the country
(Percentages)
Q: Would you say that, qualifications and skills being equal, a non-white person is more or less
likely to be offered a job or a promotion than a white person?
60
48
50
40
28
30
20
11
10
43
35
9
8
15
12
14
9
43
40
35
34
34
16
15
0
Up to
10 000
inhabitants
10 001 –
100 000
inhabitants
100 001
or more
inhabitants
Up to
10 000
inhabitants
10 001 –
100 000
inhabitants
Low
100 001
or more
inhabitants
Moderate
More
Up to
10 000
inhabitants
10 001 –
100 000
inhabitants
100 001
or more
inhabitants
High
Less
Source: Economic Commission for Latin America and the Caribbean (ECLAC), on the basis of special tabulations of the 2008
Latinobarómetro survey and Alberto Alesina and others, “Fractionalization”, Journal of Economic Growth, vol. 8, No. 1, 2003.
103
Chapter II
Social gaps and perceptions of inequality
■■
Box II.2
Fractionalization or polarization?
in recent years, economics and comparative international research have taken
a growing interest in the analysis of the impact of the ethnic composition of
the population (or the inter-group composition of a specific population) on the
functioning of institutions, economic growth and inter-group tension. In this area,
there are two dominant approaches: one emphasizing diversity and inter-group
fragmentation, which uses indices of fractionalization as indicators of potential
tension (Alesina and others, 2003), and another which states that the existence
of fewer larger groups with opposing interests is more conducive to tension than
the existence of a number of small groups (Esteban and Schneider, 2004: García
Montalvo and Reynal-Querol, 2002).
The measurement of ethnolinguistic fractionalization is defined as the
probability that two individuals selected at random from a population belong
to two different groups. This measurement has the advantage of including
heterogeneities related to ethnicity and language, compared with the original
measurement of fractionalization, which considered only linguistic differences
(approach used in the Atlas Narodov Mira of the former Soviet Union) (Alesina
and others, 2003). The fractionalization index has been criticized for aggregating
groups which may be antagonic and, conversely, for disaggregating nonantagonic groups. The most important criticism is that heterogeneity is not the
best predictor of tension. García Montalvo and Reynal Querol (2002) give the
example of two countries, A and B, each with three groups. The distribution of
groups in A is (0.49, 0.49, 0.01) and in B (0.33, 0.33, 0.34). Which country is most
likely to be experiencing tension? Using the fractionalization index, the answer is
B, but with the polarization index (RQ) the answer is A.
Thus fractionalization and polarization measurements differ in two basic
ways. Firstly, a larger number of groups increases fractionalization but reduces
polarization, which reaches its highest level when there are two groups of the
same size. Secondly, most polarization measurements consider inter-group
distances as a crucial factor, while fractionalization measurements do not include
this information. In any case, it is significant that polarization studies have not used
empirical indicators of distance between groups (usually an arbitrary parameter
was used) and, in addition, it has not been explained why a criterion of distance
between groups would be used, when distance does not always result in hostility
and inter-group tension.
Regardless of the validity of the two measurements, it was decided in this
study to use the indicator and the values reported by Alesina and others (2003),
simply for reasons of data availability. In fact, there are as yet no ethnic polarization
data with sufficient coverage for the different countries of Latin America, and
the harmonized data published by region, which could be used to construct
a measurement of ethnolinguistic fractionalization based on the 2000 census
results, so far cover only 11 countries.
From the formal viewpoint, the maximum value of the fractionalization index
(FI) is 1, when each person belongs to a different group, and its minimum value is
0. In operational terms, FI is defined as 1- the Herfindahl index (HI). Then, FI = (1 – Σ
p²), where p = the percentage represented by the group in the population. In order
to calculate this index, an estimate is first made of the values for each dimension
of the fractionalization (ethnic and linguistic) and then the two dimensions are
aggregated in a simple average. In the case of Latin America, the main data
sources used by Alesina and others (2003) were the Encyclopaedia Britannica
(EB), the CIA World Factbook and the research by D. Levinson (1998).
104
Latin America in the mirror. Objective and subjective dimensions of social inequity and well-being in the region
Box II.2 (concluded)
One of the main problems in distinguishing between ethnic and linguistic
variables is that language is one of the criteria used by ethnologists to define
ethnicity. However, this is not a major problem in Latin America, since census
questionnaires usually ask about belonging to or identifying with an ethnic group
or race. In the study by Alesina and others (2003), mother tongue was used as a
criterion for estimating exclusively linguistic fractionalization levels.
Latin America. Countries classified
by ethnolinguistic fractionalization
Countries
Source and year
Ethnic
Linguistic
Average
High level of fractionalization (µ =0.45) a
Peru
EB 1981
0.66
0.34
0.50
Guatemala
CIA 2001
0.51
0.46
0.49
Bolivia (Plurinational State of)
Levinson 1998
0.74
0.22
0.48
Panama
EB 1995
0.55
0.39
0.47
Ecuador
EB 1989
0.66
0.13
0.39
Paraguay
Levinson 1998
0.17
0.6
0.38
Moderate level of fractionalization (µ =0.29) a
Mexico
EB 1990
0.54
0.15
0.35
Colombia
EB 1985
0.6
0.02
0.31
Brazil
EB 1995
0.54
0.05
0.29
Venezuela (Bolivarian Rep. of)
EB 1993
0.5
0.07
0.28
Nicaragua
EB 1991
0.48
0.05
0.27
Dominican Republic
EB 1993
0.43
0.04
0.23
Low level of fractionalization (µ =0.16) a
El Salvador
EB 1993
0.2
-
0.20
Chile
EB 1992
0.19
0.19
0.19
Uruguay
EB 1990
0.25
0.08
0.17
Argentina
EB 1986
0.26
0.06
0.16
Costa Rica
EB 1993
0.24
0.05
0.14
Source: Economic Commission for Latin America and the Caribbean (ECLAC), on the basis of Encyclopedia Britannica, various years,
CIA World Factbook 2001 and D. Levinson, Ethnic Groups Worldwide, a Ready Reference Handbook, Phoenix, Oryx Press, 1998.
a
Simple average.
E. Perceptions of gender equity and tension between men
and women
The topic of equity in relations between men and women has been on the
public agenda of the countries of the region in recent years, mainly because
of a series of material and symbolic changes that highlighted the need for
countries to make efforts to promote women’s rights. Among these changes,
mention may be made of: (1) transformations of the family structure, reflected
in the growing number of single-parent families (especially with female heads
105
Chapter II
Social gaps and perceptions of inequality
of household) and consensual unions;22 (2) greater use of birth control and
the decline in fertility rates, which gives women more opportunities for human
capital accumulation, labour participation and financial autonomy; and (3) the
transformation of gender roles, whereby men have gradually ceased to be the
sole financial support of the household and women have become important
providers of family resources.
Despite the progress made in the region towards greater gender equity,
considerable inequities still persist (see the introductory section of this
chapter). In this connection, it has been noted that gender, race and social
class are related processes which could interact and produce different results
of inequality (Collins, 1990). According to Wharton (1991), gender is part of
the institutional infrastructure of society, creates patterns of expectations,
regulates social processes, functions as an organizer of social identity and
represents an area of cultural and political tension. In fact, tension between
men and women has been identified in comparative studies as the indicator
that best illustrates the degree of tolerance and the capacity of societies to
consolidate their democracies (Norris and Inglehart, 2003, p. 226). And in
Latin America, tension between men and women is much more obvious to
the population than in European countries (see the section on perceptions
of inequality).
At present, the main gender equity problems in Latin America seem
to be linked to persistent asymmetries in the economics of care and in the
workload of women who perform domestic tasks and at the same time
provide occupational earnings for households, in the gaps existing in the
labour market (participation or wage disparities, to mention only two) and
in the socio-political and cultural spheres, where demands are being made
for greater political representation and recognition of women’s rights and of
their contribution to society. For reasons of data availability and also because
of the current agenda (discussion is taking place in the region about what
is the best architecture or configuration for countries’ well-being or social
protection systems), this section concentrates on the analysis of objective
and subjective indicators illustrating gender imbalances in the economics of
care, in labour markets and to some extent in social protection.
The approach followed in this section is similar to the one used in earlier
parts of this book. Use is again made of the classification of countries based
on the size of social gaps and there is also a typology designed to show the
progress made by countries in “material” gender equity. In this case, two
criteria were used: the first reflects the degree of emancipation of women
22
106
For more details, see ECLAC (2006b).
Latin America in the mirror. Objective and subjective dimensions of social inequity and well-being in the region
Figure II.22
■■
Latin America (2007 and 2008): perception of high tension between different men and
women, by sex and gender equity in the countriesa
Q: Is the tension between men and women very high, high, low or nonexistent?
Only includes those who answered “high” or “very high”
80
70
60
50
52
57
48
51
69
66
63
56
58
55
50
64
40
30
20
10
0
Men
Women
Greater gender equity
Men
Women
Intermediate situation
2007
Men
Women
Less gender equity
2008
Source: Economic Commission for Latin America and the Caribbean (ECLAC), on the basis of special tabulations of the 2007
and 2008 Latinobarómetro surveys.
a
Countries were classified as follows: (a) Greater gender equity: Argentina, Costa Rica, Ecuador, Panama and Uruguay; (b)
Intermediate situation: Bolivarian Republic of Venezuela, Chile, Colombia, El Salvador, Honduras, Mexico and Paraguay; and
(c) Less gender equity: Dominican Republic, Guatemala, Nicaragua and Plurinational State of Bolivia. More details on the
classification procedure are presented in box II.3.
from reproduction and care activities23 and the second shows the level of
insertion of women in the labour market. By comparing the situations found
in countries on the basis of these two criteria, it was possible to construct a
classification of countries based on their level of gender equity,24 after which
comparison of this taxonomy with variables reflecting subjectivity made
it easier to establish the extent to which the two manifestations of reality
converge or diverge.
First we must determine the extent to which perceptions of tension
between men and women are connected with objective gender equity gaps.
In this connection, figure II.22 shows that the percentage of persons who
believe that tension between the sexes is very acute or acute increases as gender
gaps widen in countries. There are also differences that depend on the sex of
the respondents, since in all the groups of countries women tend to perceive
greater conflictuality than men. For example, in 2007, the extreme cases were
23
24
Or what Esping-Andersen (1990) would call the degree of “defamiliarization” of social protection.
For more details on the construction of this typology, see box 3.
107
Chapter II
Social gaps and perceptions of inequality
women in countries with large gaps (the group in which perception of very
acute or acute tension reached 69 per cent) and men living in countries with
small gender gaps, among whom the perception of very acute/acute tension
amounted to 52 per cent. In all groups of countries and among both men and
women, perceptions of tension declined in 2008 compared with 2007.
As noted above, gender equity demands mainly relate to emancipation
of women from domestic tasks and caregiving, so that they can have more
opportunities to accumulate human capital, to participate in the labour
market and to achieve greater autonomy. Particularly in the case of the
poorest women, this requires policies to enable them to get out of the house
and expand their social support networks. Such networks are essential for
the most vulnerable families, helping them to deal with financial crises and
to prevent mental health problems.25 Confinement of women at home also
erodes opportunities to link the poorest households with institutional social
protection networks and, in addition, makes it difficult to achieve greater
empowerment of women, since it is indicative of the persistence of traditional
models of gender roles (Suárez and Libardoni, 2007).
The data shown in figure II.23 indicate that the countries of the region
need to make greater efforts to end the social isolation26 of women, especially
those living in the poorest households and in countries with the largest social
gaps. In 2007, the percentages of people classified as being in a situation
of moderate or high isolation (measured by the frequency with which they
engage in social activities with friends, colleagues or relatives and by questions
on the availability of persons with whom they discuss personal or intimate
matters) increase as availability of goods and access to services in the home27
decrease and are higher among women than among men —a situation that
is more marked in countries with large gaps.
The barriers to women’s participation in the labour market include
sexist attitudes, which perpetuate traditional stereotypes of gender roles
and legitimize the cloistering of women and their restriction to tasks of
reproduction and housekeeping. One indicator of these beliefs is the opinion
25
26
27
108
For a brief review of studies in this field, see Social Exclusión Unit (2004).
In the isolation index, the questions of Latinobarómetro are combined: How often do you meet, go out
with or visit friends, colleagues or relatives outside your regular acitivities? and Is there somebody with
whom you can discuss more personal and intimate matters? The low isolation group included persons
who answered that they had somebody with whom they could discuss personal and intimate matters
and who meet, go out with or visit friends, colleagues or relatives one or more times each month. The
moderate/high isolation group included persons who stated that they had nobody with whom they could
discuss personal/intimate matters and/or who meet, go out with or visit friends, colleagues or relatives
less than once a month, or never.
The indicator of availability of durable goods and basic services at home includes ownership of: (1) a
freezer/refrigerator; (2) a washing machine; (3) a land-line telephone; (4) a computer, (5) hot water from
water mains; (6) a car; (7) sewers; and (8) a cell phone.
Latin America in the mirror. Objective and subjective dimensions of social inequity and well-being in the region
■■
Figure II.23
Latin America (2007): level of social isolation, by goods in the home,
sex and social gaps in the countries
60
40
77
74
80
66
65
59
51
50
50
49
41
54
46
35
20
34
26
23
0
0-1 goods
2-4 goods
5-6 goods
7-8 goods
0-1 bienes
2-4 bienes
Women
5-6 bienes
7-8 bienes
Men
Small gap
Low level of isolation
Moderate or high level of isolation
74
80
65
60
54
54
40
46
46
55
45
35
20
69
61
39
31
26
77
23
0
0-1 goods
2-4 goods
5-6 goods
7-8 goods
0-1 bienes
2-4 bienes
Women
5-6 bienes
7-8 bienes
Men
Small gap
Low level of isolation
80
65
69
54
60
40
20
63
Moderate or high level of isolation
53
47
46
37
35
75
75
25
25
59
41
31
0
0-1 goods
2-4 goods
5-6 goods
7-8 goods
0-1 bienes
Women
2-4 bienes
5-6 bienes
7-8 bienes
Men
Small gap
Low level of isolation
Moderate or high level of isolation
Source: Economic Commission for Latin America and the Caribbean (ECLAC), on the basis of special tabulations of the 2007
Latinobarómetro survey.
109
Chapter II
Social gaps and perceptions of inequality
■■
Figure II.24
Latin America (2008): population that agrees with the statement that “Women
should work only when their partner does not earn enough”,
by sex and gender equity in the countries
(Percentages)
Q: Do you agree, agree strongly, disagree or disagree strongly with the following statement: “Women should work only when their partner does not earn enough”?
60
55
50
48
Men
Women
50
42
52
40
40
30
20
10
0
Men
Women
Greater gender equity
Men
Intermediate situation
Women
Less gender equity
Source: Economic Commission for Latin America and the Caribbean (ECLAC), on the basis of special tabulations of the 2008
Latinobarómetro survey.
■■
Figure II.25
Latin America (2008): population that agrees with the statement that “Women
should work only when their partner does not earn enough”, by goods
in the home and gender equity in the countries,
(Percentages)
Q: Do you agree, agree strongly, disagree or disagree strongly with the following statement: “Women should work only when their partner does not earn enough”?
70
61
60
50
57
54
42
44
46
44
43
40
56
40
38
33
30
20
10
0
0-1
goods
2-4
goods
5-6
goods
Greater gender equity
7-8
goods
0-1
goods
2-4
goods
5-6
goods
Intermediate situation
7-8
goods
0-1
goods
2-4
goods
5-6
goods
7-8
goods
Less gender equity
Source: Economic Commission for Latin America and the Caribbean (ECLAC), on the basis of special tabulations of the 2007
and 2008 Latinobarómetro surveys.
110
Latin America in the mirror. Objective and subjective dimensions of social inequity and well-being in the region
that women should work only when the earnings of the principal provider
are not sufficient. In this case, the data for 2008 show that this opinion is
more prevalent in countries with large and moderate gender gaps (in that
order). Similarly, it is noteworthy that there are no great differences between
the sexes, which indicates that women tend to support or reject this opinion
to almost the same extent as men. In addition, in countries with large and
moderate gender gaps, the opinion that women have to work only when the
partner does not earn enough tends to be more prevalent as the availability
of goods in the home decreases. On the other hand, in countries with small
gaps, the curve is much flatter, showing a difference only in the case of the
group with more goods available.
Expanded participation by women in the labour market is not only
relevant for policies promoting greater gender equity but is also of critical
importance for poverty reduction initiatives, since women’s labour participation
is lowest in the poorest households. From an economic viewpoint, the decision
to participate in the labour market will depend on the costs and benefits
associated with that choice and this, expressed in simple terms, will be the
result of the salary returns expected from obtaining a job (obtainable on the
basis of the years of experience and the human capital accumulated by the
individual) minus the opportunity costs connected with obtaining a job (for
example, those connected with replacement for women’s housework). The
perception of the likelihood of finding a job and the associated transaction
costs will also influence the decision to participate.28
It is not the aim of this study to test a model for women’s decisions
to participate in the labour market. However, it is interesting to explore
perceptions which could be indicative of the costs and benefits that women
would weigh when deciding to join the labour market. In principle, lower rates
of labour participation by women could be explained, in subjective terms, by
the fact that women have a lower perception than men of the likelihood of
obtaining work. In addition, gender-based salary gaps, for the same education
levels, could result in perceptions of lower wage earnings among women. In
any case, there are data limitations that affect accuracy, since the questions
contrasting perceptions of differences in employment opportunities by
gender are posed in general and do not refer to the situation of the male or
female respondent.
Figure II.26 shows the percentages (disaggregated by sex, schooling
and countries classified by gender gaps) of people who believe that it is less
likely that a woman will be recruited and promoted than a man with the same
28
Non-monetary costs and benefits (for example, emotional well-being, tension in the home), which may
be numerous and have a decisive impact, are not included here. Nor is one non-observable factor - the
optimism or pessimism of the person conducting the preliminary cost-benefit analysis.
111
Chapter II
Social gaps and perceptions of inequality
■■
Figure II.26
Latin America (2008): perception of discrimination against women in the labour market,
by schooling, sex and gender equity in the countries
(Percentages)
Q: Would you say that, qualifications and skills being equal, a woman is more or less
likely to be offered a job or a promotion than a man?
Only includes those who answered “less likely”
45
41
40
34
30
25
28
25
26
30
28
26
25
Greater gender equity
Intermediate situation
Men
Complete or
incomplete higher
education
Complete or
incomplete secondary
education
Complete or
incomplete higher
education
Complete or
incomplete secondary
education
Complete primary
education or less
15
Complete primary
education or less
21
Complete or
incomplete higher
education
20
29
28
27
Complete or
incomplete secondary
education
25
38
32
31
Complete primary
education or less
35
35
Less gender equity
Women
Source: Economic Commission for Latin America and the Caribbean (ECLAC), on the basis of special tabulations of the 2007
and 2008 Latinobarómetro surveys.
qualifications. In general, perceptions that women have fewer employment
opportunities are higher among women with higher levels of schooling and
those who live in countries with greater gender equity. Women’s perception of
greater inequity in their opportunities for access to the labour market generally
reflects what happens in “objective” reality, but the increased perceptions
of gender-based labour inequity among respondents with higher levels of
schooling do not agree with the “hard data”. In addition, it is precisely in the
countries with the largest gender gaps (with the lowest rates of participation
of women in non-agricultural work and the largest gender-based wage gaps)
that the least gender-based employment inequities are perceived. This indicates
a high degree of obliviousness of such inequalities in the population.
Thus it is conceivable that, in countries with the least gender inequities,
the population is more aware of such inequalities, since the reduction of
gender gaps results from, or is accompanied by, a conjunction of economic,
political, institutional and cultural changes encouraging such reduction.
Consequently, the more prominent the place occupied on the agenda by
debate conducive to women’s rights, the more obvious and transparent gender
inequalities should be to the public. Secondly, the reason why perceptions of
barriers to women in labour markets are more marked among individuals with
more schooling could be that the education system, by providing information
112
Latin America in the mirror. Objective and subjective dimensions of social inequity and well-being in the region
and encouraging meritocratic values, promotes acceptance of explanations of
inequality that are based on discrimination (Kane and Kyyro, 2001) and also
helps to make asymmetries more transparent. In any event, education does
not have the same effect in countries with greater gender disparities.
Figure II.27 shows how perceptions developed between 1996 and
2005 as regards the possibility of women earning the same wages as men,
disaggregated by sex, schooling and groups of countries classified on the basis
of their gender equity. One trend is for women, in practically all groups of
countries, at different levels of schooling and over the entire period studied,
to perceive more gender-based wage inequalities than did men. Only in 2000
and 1997 and for some groups of countries and levels of schooling do the
differences become smaller (for example, in 2000 for persons with complete
or incomplete higher education living in countries with moderate gender
gaps, and in 1997 among individuals with complete or incomplete secondary
education, in countries with larger objective gender gaps).
The data presented in figure II.27 also show that it is only in countries with
greater gender equity that schooling is found to have any effect on gender-based
perceptions of wage inequality. In any case, it would seem that this effect is
lessening, especially because in the group with less schooling (complete primary
education or less) there has been an increase in gender-based perceptions of
wage inequality. This can be more clearly illustrated through simple annual
averages (giving equal weight to the sexes): in 1996, the percentage of the
population with a low education level who considered that gender-based wage
disparity existed was 39 per cent, while for individuals with more schooling
the figure was 52 per cent. However, 10 years later, the respective values were
46 and 48 per cent. Thus the perception gap apparently created by education
level was reduced from 13 to only 2 percentage points.
In countries with moderate gender equity, the effect of schooling for
the entire period is less than is found in countries with greater gender equity
and the data fluctuations29 found over the period make it difficult to discern
a trend: in fact, when the exercise is replicated for countries with fewer
gender disparities, there are differences between the groups with more and
less schooling of about 5 and 8 percentage points for the biennia 1996/1997
and 2006/2007, while in 2000 there are no schooling-related differences. In
countries with the greatest gender inequities, schooling seems to have no
effect, as was seen in the analysis of perceptions related to recruitment and
promotion opportunities.
29
There are quite marked data fluctuations for countries with moderate gaps and those with greater gender
inequality, and for women. For example, in the countries with moderate gaps, the percentage of people
who believe that women have less likelihood of earning the same wages as men dropped in 2000, rose
sharply in 2005 and declined again in 2006.
113
Chapter II
Social gaps and perceptions of inequality
■■
Figure II.27
Latin America (1996-2006): percentage of the population who agree with the statement
that “Women have less opportunities to earn the same wages as men”,
by schooling,a sex and gender equity in the countries
Greater gender equity
70
60
50
51
42
42
30
51
46
36
35
38
1996
1997
2000
41
43
2006
1996
1997
59
54
50
42
42
51
49
53
49
43
60
51
51
44
40
60
58
56
44
45
43
20
2005
Low
2000
2005
2006
1996
1997
Medium
2000
2005
2006
High
Men
Women
Intermediate situation
70
62
60
50
53
46
46
30
35
41
1997
2000
53
2005
2006
1996
1997
Low
2000
51
47
44
45
49
33
2005
2006
1996
1997
Medium
2000
61
60
50
40
45
48
69
61
61
56
54
51
45
55
49
47
44
56
48
52
50
40
2006
Women
Less gender equity
64
2005
High
Men
70
46
32
31
30
1996
37
42
37
38
20
50
54
48
44
59
52
45
37
40
51
45
52
46
42
55
51
41
55
44
43
30
20
1996
1997
2000
2005
2006
1996
1997
Low
2000
2005
2006
Medium
Men
1996
1997
2000
2005
2006
High
Women
Source: Economic Commission for Latin America and the Caribbean (ECLAC), on the basis of special tabulations of the 1996,
1997, 2000, 2005 and 2006 Latinobarómetro surveys.
Levels of schooling are classified as follows: Low: complete primary education or less;Medium: complete or incomplete
secondary education; High: complete or incomplete higher education
a
114
Latin America in the mirror. Objective and subjective dimensions of social inequity and well-being in the region
■■
Box II.3
Typology of countries based on gender gaps
In order to obtain a classification of countries linking some of the gender gaps
objectively existing there and the perceptions of the population, a typology was
constructed that includes two material expressions of such inequities: the degree
of emancipation of women from the responsibilities associated with housekeeping
and caretaking, and the level of women’s participation in the labour market. It is
appropriate to obtain information on these aspects in a regional context in which
a discussion is under way on what is the welfare architecture best suited to the
situation of countries and which are the most effective mechanisms for closing
the social welfare and labour insertion gaps affecting women.
As a word of warning to the reader, it should be noted that the taxonomy
presented here does not in any way claim to rank countries on the basis of all
gender inequities. The classification proposed is designed, firstly, to reduce the
possible comparison universe and, secondly, to provide a frame of reference
for gender inequities that reflects as closely as possible the perceptions and
opinions voiced and which are better measured in the Latinobarómetro survey
during 1996 and 2008. Thus, from a more general viewpoint of gender inequities,
the typology given here is incomplete, since it does not, for reasons connected
with the lack of information, include essential aspects such as, inter alia, violence
against women and gaps in political participation and representation.
The procedure used to construct the typology of gender gaps consisted
of two stages. In the first phase, countries were classified on the basis of
each of the stated dimensions (domestic emancipation and integration in
the labour market), by means of a non-hierarchical cluster analysis. The two
classifications were then matched, giving a classification into three groups of
countries in order of intensity of gender gaps regarding the care economy and
participation in the labour market. It should be noted that the final classification
exercise covered only 16 countries; Brazil and Peru were not included, because
there were no data available on the percentage of female heads of household
engaged solely in housework.
In the case of gaps connected with housekeeping and caregiving, the inputs
were the latest data available for the following indicators: (a) overall fertility rate;
(b) net pre-primary enrolment rate (for Chile and Costa Rica, since the school
enrolment indicator was not available, attendance in the last pre-primary grade,
estimated on the basis of household surveys, was used as a proxy for pre-school
participation; and (c) the percentage of female heads of household engaged
exclusively in housework. This exercise identified two groups of countries, in
which the group with the highest gender equity obtained average values of 2.39,
74.66 and 17.1 per cent respectively for the three indicators. In the second group
of countries, with lower gender equity, these values were 3.31, 37 and 24.3 per
cent. In terms of statistical significance, the net pre-primary enrolment rate was
the factor that most differentiated between countries (p=0.000), followed by the
fertility rate (p=0.005) and the percentage of female heads of household engaged
solely in housework (p=0.036).
In order to establish gaps of participation in the labour market, use was
made of the indicators of gender wage parity (without differentiation by years of
schooling) and the percentage of women in non-agricultural paid work. Here too,
a classification into two groups of countries was obtained, in which the group with
the highest gender equity had an average gender wage parity of 89.37 per cent
and a participation of women in non-agricultural paid work of 44.17 per cent. In
115
Chapter II
Social gaps and perceptions of inequality
Box II.3 (concluded)
the group of countries with less gender equity, these values were 81.7 and 37.26
per cent respectively. The variable that differentiated the most between groups
of countries was participation of women in non-agricultural work (p=0.000). In all
cases, the wage parity indicator was statistically significant (p=0.001).
Countries of latin america classified on the basis of gender gaps
in the care economy and in labour insertion
Dimensions
More domestic emancipation
Less domestic emancipation
- Overall fertility rate: 2.39
- Overall fertility rate: 3.31
- Pre-primary enrolment rate: 74.6
- Pre-primary enrolment rate: 37.1
- Female heads of household engaged
solely in housework: 17.1
- Female heads of household engaged
solely in housework: 24.3
Higher labour insertion
Argentina
Colombia
- Gender wage parity: 89.3
Uruguay
El Salvador
- percentage of women in nonagricultural paid jobs: 44.1
Costa Rica
Honduras
Ecuador
Paraguay
Panama
Venezuela (Bol. Rep. of)
Lower labour insertion
Chile
Bolivia (Plur. State of)
- Gender wage parity: 81.7
Mexico
Guatemala
- percentage of women in nonagricultural paid jobs: 37.2
Nicaragua
Dominican Republic
- Countries with greater gender equity: Argentina, Costa Rica, Ecuador, Panama and Uruguay.
- Countries in an intermediate situation: Chile, Colombia, El Salvador, Honduras, Mexico, Paraguay and the Bolivarian Republic of
Venezuela.
- Countries with less gender equity: the Plurinational State of Bolivia, Guatemala, Nicaragua and the Dominican Republic.
Source: Economic Commission for Latin America and the Caribbean (ECLAC).
F. Violence, perceptions of insecurity and social gaps
In the previous sections, it has been seen that the countries of Latin America
have varying social gaps, in addition to major perceptions of inequality and
tension between the groups coexisting within the national borders. In this
connection, it has been found that one of the differences between the current
situation and the import substitution stage is the soaring rates of crime and
violence (Roberts, 2004). Underlying this statement is the assumption that, in
the import substitution era, inequalities and tensions were managed through
institutions which succeeded in channelling the interests and social demands
of the disadvantaged sectors. According to Portes and Hoffman (2003), the
crisis of institutions, the consolidation of a market system of all against all,
employment precarity and persistence of considerable inequality are creating
an anomic scenario in many Latin American cities.
116
Latin America in the mirror. Objective and subjective dimensions of social inequity and well-being in the region
This section therefore explores the relationships between some
objective and subjective data on violence and insecurity and the social gaps
affecting the countries of the region, against the backdrop of the link between
distributive inequality, violence and crime (Hoffman and Centeno, 2003;
Portes and Hoffman, 2003; Londoño, 1996; Bourguignon, 1999; Arriagada
and Godoy, 2000). The goal of this study is not to provide rigorous empirical
proof of the relationships between objective and subjective indicators of
violence, crime and social gaps. Instead, the aim is to construct an initial
picture to guide future investigations. The possibility of further exploration
is affected by the lack of theory, by sampling limitations and by methodology
and data problems.
One of the main arguments used to substantiate the relationship
between inequality and violence is the assumption of the spread in the Latin
American countries of meritocratic beliefs leading people to think that rewards
should be distributed according to talent. Under this assumption, it is the
disjunction between egalitarian values and unequal structures, rather than
inequality in itself, that fosters perceptions of relative deprivation, feelings of
resentment and hostility and violent behaviour (Merton, 1987). This situation
is particularly prevalent in Latin America, the most unequal region in the
world, with the addition of new ingredients such as growing competition
for urban space, practices of residential segregation and the segmented and
precarious nature of labour markets (Kaztman, 2007).
The international study of violence has major limitations, since the
availability, reliability and comparability of indicators vary considerably
between countries and regions. Crime statistics generated from complaints to
institutions have problems of under-reporting, so that there is a “dark figure”
of unreported crimes. As regards comparability, the differing definitions
of crimes used by countries are reflected in different forms of recording
and reporting. However, the homicide rate can be used for international
comparisons, since this crime is generally recorded using similar definitions
and there are fewer problems of under-reporting.
Figure II.28 shows homicide rates for various regions of the world,
covering 129 countries around 2004.30 The data are compiled both by criminal
statistics units (police, ministries of justice or security) and by public health
agencies. It was decided to present the information from both sources in order
to give a more complete picture, although the concepts used by the criminal
justice system are not equivalent to those used by the health sector. Latin
America is one of the regions with the most homicides, and the countries of
Central America and the Caribbean are the worst in this respect. The regional
30
For more information on methodology and sources, see UNODC (2008).
117
Chapter II
Social gaps and perceptions of inequality
Figure II.28
■■
Latin America and other regions (around 2004): homicide ratesa
17.7
16.3
10.6
1.2
1.9
3.2
3.2
2.3
2.3
6.5
6.5
4. 2
East Asia (11)
3.4
6.1
5.6
Central Asia and the
Caucuses (8)
3.1
2.4
1.3
2.6
3.3
5
3.7
3.8
6.6
10
10.9
11.3
15
15.0
24.5
18.4
18.7
17.7
20
19.2
25
22.4
30
26.6
29.5
35
Americas
Public health statistics
Europe
Asia
Oceania (3)
South-East
Europe (6)
Western and Central
Europe (25)
Eastern Europe (4)
Southern Asia (5)
South America (12)
Central America (7)
Middle East and
South-West Asia (13)
Africa
The Caribbean (8)
Mexico
North America (2)
West and Central
Africa (5)
South Africa (7)
North Africa (5)
East Africa (7)
0
Oceania
Criminal statistics
Source: Economic Commission for Latin America and the Caribbean (ECLAC), on the basis of United Nations Office on Drugs
and Crime (UNODC), “Intentional homicide, rate per 100,000 population”, International Homicide Statistics (IHS) [online] http://
www.unodc.org/documents/data-and-analysis/IHS-rates-05012009.pdf and official figures for public health statistics.
a
The data are rates per 100,000 inhabitants. Regional data are simple averages of the data available around 2004. Only
countries with public health data and crime statistics are included. Figures are only illustrative given the differences in the
sources of data used.
situation is roughly comparable to that of Africa (particularly the sub-Saharan
area), although the African countries have major recording problems, as
shown by the large discrepancy between crime statistics and public health
data. Eastern Europe is another region with a high rate of homicides, although
lower than that of Latin America.
Figure II.29 shows homicide rates disaggregated by size of social gaps
existing in the Latin American countries, where the main differences are
the lower rates for countries with small gaps compared with countries with
moderate and large gaps. With regard to developments between 2000 and
2006, the three groups of countries show an upward trend, and the increase
among countries with large gaps (+16 per cent relative) is double the regional
variation (+8.2 per cent). In any case, the differences between countries,
regardless of the size of their social gap, are sizeable (see figure II.30). For
example in the group with large gaps, the Plurinational State of Bolivia has
much lower rates than the rest of the group. In the group with moderate gaps,
the countries not following the trend are El Salvador and Colombia, with
rates comparatively higher than those of the rest of the group and, in the
group with small gaps, the Bolivarian Republic of Venezuela has significantly
higher rates than the other countries.
118
Latin America in the mirror. Objective and subjective dimensions of social inequity and well-being in the region
■■
Figure II.29
Latin America (around 2000 and 2006): homicide rates and social gaps in countries
30
25
20.9
20
25.0
24.3
25.6
20.0
15
21.6
12.4
11.0
10
5
0
Large gaps
Moderate gaps
Small gaps
c. 2000
Latin America
c. 2006
Source: Economic Commission for Latin America and the Caribbean (ECLAC), on the basis of official figures Social Indicators
and Statistics Database (BADEINSO) [online database] http://websie.eclac.cl/sisgen/ConsultaIntegrada.asp?idAplicacion=1.
■■
Figure II.30
Latin America (around 2000 and 2006): homicide rates
70
63
43
41
33
37
26
32
26
20
24 23 22
15
14
18 16 16
9
10
12
5
12 10 11
6 8
6 6
7 5
4 5
c. 2000
Panama
Peru
Nicaragua
Paraguay
Ecuador
Brazil
Dominican Rep.
Mexico
Colombia
Honduras
Venezuela
(Bol. Rep. of)
Guatemala
El Salvador
0
2 2
Chile
30
50
Bolivia
(Plur. State of)
45
40 37
Argentina
50
Uruguay
55
Costa Rica
60
c. 2006
Source: Economic Commission for Latin America and the Caribbean (ECLAC).
The reasons why some countries deviate from the value for the homicide
rate that would be expected in view of the size of their gap must be sought in
intra-national factors. For example, Colombia and El Salvador have been through
periods of severe armed conflict, which has resulted in the institutionalization
of violent means of dispute settlement. This can be particularly complex in
areas where the institutions and the rule of law are not functioning properly. In
addition, the availability of firearms among civilians and the existence of a large
mass of refugees experiencing insertion difficulties may encourage the creation
of maras (gangs of organized criminals) such as exist in El Salvador, Guatemala
and Honduras (ECLAC/OIJ/SEGIB, 2008; Salama, 2008; Wielandt, 2005), or
in other cases may not, as witness the situation in Nicaragua.
In any case, there are various problematic bottlenecks, both conceptual
and empirical, that make it difficult to construct a more solid analytical picture
119
Chapter II
Social gaps and perceptions of inequality
on the subject of homicides. In the first case, it should be recalled that the
theory of relative deprivation was originally developed to explain the emergence
of crimes against property in modern urban societies (particularly large cities
in the United States) where there were not yet significant drug trafficking
problems and where institutions functioned relatively well. It is therefore not
a theoretical concept formulated specifically to explain violence.31 In addition,
there will not always be found to be an automatic conversion of frustration
(attributable to inter-group tension) into aggression. For example, Grant and
Brown (1995) indicate that the generation of hostility towards out-groups and
the materialization of violence require a strong perception of inter-group threat.
With regard to the second problem, which is perhaps the main obstacle to the
formulation of clear conclusions, the homicide rate is a Pandora’s box, since it
subsumes acts of violence that are difficult to compare.32
Figure II.31 relates homicide rates to the degree of violence perceived
in the country. The two variables are positively associated (correlation of
0.49). The countries where perceptions of violence do not correlate with
homicide rates include the Bolivarian Republic of Venezuela (without this
country the correlation increases to 0.6) and the Plurinational State of Bolivia.
In the Bolivarian Republic of Venezuela, a relatively high homicide rate
coexists with low perceptions of violence, which somehow reflects the lack
of importance attached by the population of that country to the problem
of crime in the last ten years, although this trend was reversed in 2008
(Latinobarómetro Corporation, 2008). In the Plurinational State of Bolivia,
high perceptions of violence coexist with low homicide rates, which may be
due to the high visibility of some violent acts committed in the context of
the social mobilizations and conflicts that took place in that country.
Figure II.32 shows perceptions of violence in the country disaggregated
by the perceived level of inter-group tension33 and social gaps in countries.
Perceptions of violence increase as countries’ social gaps widen and are
31
32
33
120
Indeed, in societies that are more traditional than Latin American societies, in which people act according
to prescribed roles, there may be high rates of violence (for example, femicide or violence against women
not causing death).
Femicide, homicide caused by armed conflict, committed in order to obtain drugs or under the influence
of drugs, committed for payment, committed in the context of a crime against property, hate crimes, etc.
In order to ascertain perceptions of inter-group tension, the following questions were used: in all countries
there are differences and even tension between different social groups: in your opinión, how great is the
tension between poor and rich people, management and workers, young people and society, men and
women, persons of different races, and nationals and foreigners. The procedure used was the following:
(1) analysis of main components, which identified one single component explaining 55 per cent of the
variation; (2) analysis by non-hierarchical cluster, which identified three groups: (i) perceptions of minor
tension in all the groups considered; (ii) perceptions of moderate tension (marked tension between
management and workers, poor and rich people, and young people and society and little tension between
men and women, people of different races and nationals/foreigners; and (iii) perceptions of marked tension
between all the groups considered. All the variables included in the analysis were significant (p=0.000
in all cases). The univaried analysis of variance of perceptions of violence shows a significant interaction
between gaps and perception of tension (p=0.000).
Latin America in the mirror. Objective and subjective dimensions of social inequity and well-being in the region
■■
Figure II.31
Latin America (2008): perceptions of violence and homicide rates
Q: To some people [country] is a peaceful country; to others it is a violent country. On a scale of 1
to 10, where 1 is very peaceful and 10 is very violent, where would you place [country]?
Perception of the level of violence in the country. 2008
R Sq linear = 0.237
Guatemala
7
6
Honduras
Colombia
Mexico
Panama
Dominican Republic
Argentina
Costa Rica
5
El Salvador
Brazil
Bolivia (Plur. State of)
Peru
Chile
Nicaragua
Ecuador
Paraguay
Venezuela (Bol. Rep. of)
Uruguay
4
0
10
20
30
40
50
60
Homicide rate around 2006
Source: Economic Commission for Latin America and the Caribbean (ECLAC), on the basis of special tabulations of the 2008
Latinobarómetro survey.
■■
Figure II.32
Latin America (2008): perceptions of violence, by perceptions
of inter-group tension and social gaps in countries
Q: To some people [country] is a peaceful country; to others it is a violent country. On a scale
of 1 to 10, where 1 is very peaceful and 10 is very violent, where would you place [country]?
6.5
6.0
5.5
5.1
5.3
5.6
5.7
5.7
5.0
5.0
4.5
6.0
5.9
4.5
Small gap
Moderate gap
High tension
Moderate tension
Low tension
High tension
Moderate tension
Low tension
High tension
Moderate tension
Low tension
4.0
Large gap
Source: Economic Commission for Latin America and the Caribbean (ECLAC), on the basis of special tabulations of the 2008
Latinobarómetro survey.
121
Chapter II
Social gaps and perceptions of inequality
accentuated by perceptions of inter-group tension; thus persons who live in
countries with the largest social gaps and believe that there is very marked
or marked inter-group tension average 6 points on a scale of 1 to 10, while
persons who live in countries with small gaps and perceive that tension
between the different social groups is low or non-existent display an average
perception of violence of 4.5 points on the same scale of 1 to 10.
No data are available on trends in perceptions of the seriousness of
violence in the different countries, since the question was added in 2008.
However, it is known that perception has increased regarding the importance
of crime, which became the principal social problem perceived in the region
in 2008, exceeding unemployment for the first time (see chapter I). The
greater perceived seriousness of crime appears to be unrelated to rates
of victimization; indeed, there are large gaps between the percentages of
the population who state that they have been victims of a crime and the
proportion identifying crime as the principal problem (Latinobarómetro
Corporation, 2008). This seems to be due to different factors, such as the
development of better social statistics, the advent of democracy and the
existence of freedom of the press, which began to report on topics that
were concealed during authoritarian periods.34 Indeed, for authors such as
Patterson (2002), the dissociation is due to the existence of different types
of realities: the reality existing in people’s daily lives and the reality reflected
on television.
In this new scenario, the consolidation of a “security agenda”, in which
crime has become an area open to dispute between opposing positions,
appears as an element common to the various countries: on the one hand,
alarmist rhetoric about “insecurity”, proposing more repression and opening
the way to a kind of “penal populism”; on the other hand, a doctrine of
guarantism, recognizing the concept of human security and emphasizing
the rights of persons rather than the unrestricted maintenance of order.
Regardless of the merits of the two approaches, media manipulation of
fear may lead to growing feelings of insecurity, reinforce stigmatization and
undermine the possibilities of integration of social categories perceived as
threats to law and order because of their “undesirable” characteristics (the
poor, the unemployed, street people, drug addicts, inhabitants of marginal
districts) (Dammert and Arias, 2007; Wacquant, 2008).
34
122
Security was one of the favourite subjects of the authoritarian governments. It was not easy to find news
of crimes, assaults and violence when these regimes were in power, since they stifled the media through
self-censure or actual censure. Many of them succeeded in creating “security” climates of opinión.
In contrast, democracies were categorized by many authoritanian regimes as “disorderly” and it was
announced that they would bring “chaos”. The freedom to report crime was one of the main differences.
Initially, therefore, democracies seemed to have higher crime rates than the authoritarian regimes which
preceded them.
Latin America in the mirror. Objective and subjective dimensions of social inequity and well-being in the region
From the viewpoint of relative deprivation, in societies characterized by
marked inequities which do not give the excluded the means to overcome their
situation, it is to be expected that at least some of the excluded, especially the
younger ones, will use unlawful means to achieve socially valued ends. At the
same time, it is most likely that the “haves” will be the preferred victims of
crime, since they own the largest quantity and the best quality of goods that
can be “redistributed”. Figure II.33 shows trends in the rate of victimization
between 1996 and 2008, disaggregated by the socio-economic situation of
respondents (measured by access to basic services such as drinking water, hot
water and sewers) and countries’ social gaps. The data show differences between
and within countries: victimization is more frequent among respondents from
households with greater access to basic services who live in countries with
large and moderate gaps. This difference can be seen better by considering the
average victimization rate between 1996 and 2008. On average, the highest
percentages of victimization are found among those who have the best access
to basic services and those who live in countries with moderate and large gaps
(48 per cent and 47 per cent respectively) and the lowest values are found among
people who do not have drinking water, sewers and hot water, although in this
latter case there are no differences based on countries’ social gap (average of
32 per cent for countries with large, moderate and small gaps).
The data in figure II.33 thus show that the use of very basic
measurements of socio-economic segmentation produces significant
differences in victimization rates in countries with moderate and large gaps
and less important differences in countries with small gaps.35 It is noteworthy
that samples of persons living in households with access to all services did
not differ substantially in terms of their area of residence by groups of
countries, if one considers all the years between 2001 and 2006: 68 per cent
of respondents from countries with small gaps who have drinking water,
hot water and sewers live in urban areas with over 100,000 inhabitants, while
this value is 69 per cent in countries with moderate gaps and 66 per cent in
those with small gaps. Thus the differences relating to countries’ social gaps
are not due to biases associated with the area of residence of respondents
in a better socio-economic situation.
Lastly, victimization can contribute to an increase in perceptions of
insecurity or more directly to fear. For example, some authors have expressed
the view that fear depends on the ability to imagine victimization and that
both direct and indirect experiences of victimization can act as “multipliers”
of fear (Killias, 1990). And the data shown in figure 67 support this theory:
worry about being the victim of a crime increases in people who report that
they were victimized the previous year.
35
Which does not mean that inter-group differences are not important in the commission of criminal acts in
this group of countries. The point is that very basic welfare measurements do not seem to discriminate
in the countries of the region which have the lowest rates of poverty and inequality.
123
Chapter II
Social gaps and perceptions of inequality
■■
Figure II.33
Latin America (1996-2008): victimization rates, by access to basic servicesa
and social gaps in countries
Q: Have you or a member of your family been mugged, assaulted or the victim of a crime in the
last twelve months?
60
50
40
30
36
36
41 40 42
38
40 41
36
36
38
32
31
44 44
40
32
38
36
37 35
29
26
40 38
40
36
33
31
24
20
10
0
1996
1997
1998
2001
2002
2003
2004
2005
2006
2008
Small gaps
0-1 services
2 services
60
60
50
40
43
35 37
41
46
44 43 45
35
39
All services
58
57
47
43
38
46
41
37
32
32
31
30
40
39
34
32
25
33
27
24
20
10
0
1996
1997
1998
2001
2002
2003
2004
2005
2006
2008
Moderate gaps
0-1 services
2 services
All services
60
50
47
40
33
36
42
37
47
46 45
41
42
37
45
34
39
30
39
36
25
53
50
48
44
48
43
43
34
30
36
35
28
25
20
10
0
1996
1997
1998
2001
2002
2003
2004
2005
2006
2008
Large gaps
0-1 services
2 services
All services
Source: Economic Commission for Latin America and the Caribbean (ECLAC), on the basis of special tabulations of the 19962008 Latinobarómetro surveys and Social Indicators and Statistics Database (BADEINSO) [online database] http://websie.eclac.
cl/sisgen/ConsultaIntegrada.asp?idAplicacion=1.
Access to services takes into account the availability of sewers, drinking water and hot water. Figures for 2007 are not
included because in that year the questions on potable and hot water were combined in one, making data difficult to compare.
Those with access to “all services” have sewers, potable water and hot water.
a
124
Latin America in the mirror. Objective and subjective dimensions of social inequity and well-being in the region
■■
Figure II.34
Latin America (2007): perception of insecurity, by victimization,
city size and number of goods in the home
Q: How often do you worry that you might one day be a victim of a violent crime?
60
50
40
35
30
20
27
39
31
43
48
44
47
33
34
47
47
49
49
45
39
30
30
39
43
29
35
35
20
10
0
0-1 goods 2-3 goods 4-6 goods 7-8 goods 0-1 goods 2-3 goods 4-6 goods 7-8 goods 0-1 goods 2-3 goods 4-6 goods 7-8 goods
Up to 10 000 inhabitants
Between 10 000 and 100 000 inhabitants
Victimized
Over 100 000 inhabitants and capital cities
Non-victimized
Source: Economic Commission for Latin America and the Caribbean (ECLAC), on the basis of special tabulations of the 2007
Latinobarómetro survey.
Note: the percentage shown in the figure corresponds to the population constantly or almost constantly worried about being a
victim of a violent crime.
G. The financing of policies: facts and perceptions
eCLAC (2006, 2007) has emphasized the need for the countries of the region
to move towards a system of social policies based on universal guarantees
of rights and promotion of social inclusion. This approach is based on the
conviction that States cannot simply provide minimal assistance mechanisms
and that, in order to improve levels of social inclusion, public policies must
promote human capital, prevent risks and reduce vulnerability for all. In
order to make progress in closing social gaps, there must be a fiscal covenant
providing sufficient resources. Initiatives to promote social inclusion can
be understood as a social compact, both because they involve obtaining
resources from the “haves” and as a good because integration of the “havenots” depends on citizens feeling that they are part of a collective system of
cooperation protecting them.36
36
Experience in Europe has shown that a universal welfare system guaranteeing rights for all is essential in
order effectively to reach the most deprived groups. This “redistribution paradox” means that the best way
of guaranteeing acceptable standards for the “have-nots” is to ensure that the “haves” also benefit. Since
this type of system requires high taxation, it is important that the majority of the population should not only
cover the cost but should also benefit, through child care, pensions and affordable health care.
125
Chapter II
Social gaps and perceptions of inequality
Here the tax burden is relevant, because taxes are the main source of
States’ financial resources. In this regard, the region has a long way to go,
since the tax burden is far below that found in the European Union and
in the United States. In Latin America, although the percentage of GDP
represented by tax revenue increased from 14.6 per cent in 1995 to 18.4
per cent in 2008, these values are quite different from those found in the
European Union (39.5 per cent of GDP in 2006) and in the United States
(28.2 per cent the same year). In addition, there is considerable intraregional
heterogeneity: for example, Brazil is close to the figure in some European
countries (average tax burden of 33.2 per cent between 2003 and 2007) and
Uruguay and Argentina are in a situation similar to that of the United States,
while Mexico and Guatemala have tax burdens of about 10 per cent of GDP,
measured as averages between 20203 and 2007.
In the last few decades, the tax structure in Latin America has undergone
significant changes: reduction of tax on foreign trade, increase in taxation
through value added tax (VAT) and increase in payroll taxes resulting from
extension of pension benefits. As a result, the composition of the tax structure
in the region in 200737 showed a large proportion of tax revenue generated
from indirect taxes (10 per cent of GDP) and a smaller proportion of direct
taxes (5.6 per cent of GDP). These values contrast with those found in the
OECD and European Union countries, where in 2007 revenue from direct
taxes accounted for 15.7 per cent and 16.8 per cent of GDP, while revenue
from indirect taxes accounted for 11.3 per cent and 11.9 per cent of GDP
respectively. The region’s tax structure is thus more regressive than that of
the developed countries and is one reason why Latin America is one of the
regions with the most inequality (Cetrángolo and Gómez Sabaini, 2007).
Although taxes are the main sources of States’ resources, other fiscal revenue
must also be considered, particularly revenue from the exploitation of nonrenewable resources, such as oil, copper and gas, and revenue from hydroelectric
plants (Itaipú dam) and the Panama Canal. In relative terms, this type of revenue
is more important in countries such as the Plurinational State of Bolivia, the
Bolivarian Republic of Venezuela, Panama, Chile, Ecuador and Mexico (see
figure II.36). The “other income” category includes not only income from profits
obtained from the direct sale of non-renewable resources by State enterprises but
also income from exploitation and export permits, taxes, royalties, etc.
Public attitudes towards possible increases in the tax burden are one
aspect to be considered in proposals for a social compact to finance the
elimination of social gaps in Latin America. Although movements to reject
37
126
The figures for the Latin American countries relate to 2007, except for Colombia, for which they relate to 2006;
the figures for the OECD countries relate to 2006. The OECD figures are for general government revenues,
as are those for Argentina, the Plurinational State of Bolivia, Brazil, Chile, Colombia and Costa Rica.
Latin America in the mirror. Objective and subjective dimensions of social inequity and well-being in the region
■■
Figure II.35
Latin America and other regions and countries (around 2007): level and composition
of the tax burdena as a proportion of GDP
45
40
35
11.1
9.2
30
25
6.8
11.9
11.3
20
4.7
10
0
16.8
15.7
5
2.9
1
5.6
15
16.8
10
8.9
OECD (30)
European
Union (15)
Direct taxes
United States
5.6
Southern Asia (6)
Indirect taxes
Latin America (19)
Social security contributions
Source: Economic Commission for Latin America and the Caribbean (ECLAC), on the basis of official figures; Organisation for
Economic Co-operation and Development (OECD), Revenue Statistics 1965-2005, Paris, 2006; and International Monetary
Fund (IMF), “Government Finance Statistics” [online] http://www2.imfstatistics.org/GFS/.
a
Total tax burden is the sum of the percentages corresponding to direct taxes, indirect taxes and social security contributions.
■■
Figure II.36
Latin America and other countries (around 2007): total government revenues
(Percentages of GDP)
40
35
30
25
20
15
10
Tax income
Capital income
Social security contributions
Average for Latin America
Other income
Haiti
Guatemala
El Salvador
Mexico
Paraguay
Dominican Republic
Colombia
Peru
Honduras
Ecuador
Costa Rica
Panama
Uruguay
Nicaragua
Chile
Argentina
Venezuela
(Bol. Rep. of)
Brazil
0
Bolivia
(Plur. State of)
5
a
Source: Economic Commission for Latin America and the Caribbean (ECLAC), on the basis of official figures.
a
Includes revenues from gas, petroleum, copper, the Panama canal and the Itaipú dam, as well as donations received.
127
Chapter II
Social gaps and perceptions of inequality
tax burden increases have been found in a few cases, studies in developed
countries have found that attitudes towards taxation predict tax evasion
(Fallan, 1999). In this area, the first question is whether citizens’ perceptions
regarding taxes are related to actual levels of taxation. The replies to this
question can be classified according to three different interpretations: one
which maintains that the public is informed and aware of levels of State
taxation; another which states that citizens are ignorant or confused about
actual levels of taxation; and a third which combines the first two, because it
maintains that people’s behaviour is based on a model of rational ignorance
(Bowler and Donovan, 1995).
Under the theory that the public is composed of individuals who are
informed and aware of government tax measures, citizens would react and
limit tax revenue obtained. However, this model might expect too much
of taxpayers. This is not only because of the complexity inherent in tax
questions but also because tax rates are subject to changes that may affect
people differently depending on their levels of wealth, income or property
and on stages in their life cycle (such as a job change, purchase of real estate
or retirement) (Bowler and Donovan, 1995).
For the model assuming public ignorance and confusion about taxation
“actually existing”, the general public would be irrelevant, since they would react
in a limited manner to variations on the tax burden. Under this assumption,
citizens would perceive the political authorities as being opportunist in their
tax measures, which would respond to various factors such as pressures and
demands from the State bureaucracy and interest groups, which would all result
in more swollen government budgets and a broader tax base. It should be noted
that this interpretation has some empirical support obtained in developed
countries: for example, Hansen (1983) concluded that the public lacked a broad
understanding and information about how the tax system works. However,
Teske and others (1993) adduce evidence to the contrary.
The theory of rational ignorance is based on the premise that, for the
average individual, estimation of actual tax burden levels affecting him or her
could require too much information of a somewhat sophisticated nature. In other
words, the cost for a person of permanently updating his or her information
on tax actually paid would probably be greater than the benefits derived from
this operation (Bowler and Donovan, 1995). However, even though citizens
may not know precisely the real levels of tax pressure, they could change their
views when the pressure exceeds certain levels. This non-linear relationship
would be one in which citizens would be aware of the economy at a certain
point only when things are going sufficiently badly38 (Alt and Chrystal, 1983).
38
128
Or sufficiently well.
Latin America in the mirror. Objective and subjective dimensions of social inequity and well-being in the region
As noted in the section on perceptions of distributive inequity, a variation in a
very visible aspect of someone’s status would be a more powerful generator of
opinion changes than gradual changes in that status (Mosley, op. cit.).
The reader is warned that the aim in this section is not to test the various
conceptual frameworks created to understand the relationship between
perceptions and objective levels of tax burden. Instead, the purpose of this
discussion is to provide a basic analytical context to guide the exploration
and interpretation of data. Thus a starting-point for the analysis is to use an
indicator of perceptions of tax burden and relate it to objective levels of
tax pressure existing in the countries of the region. As stated by Bowler and
Donovan (1995), the fact that citizens perceive that the tax burden is too great
or unfair could indicate that they would not be willing to assume additional
tax burdens or that they would be hostile to this type of initiative.
Figure II.37 shows the development, between 2003 and 2007, of
perceptions of tax burden among the Latin American population. The data
show that citizens do not agree with the experts’ diagnoses regarding the
degree of tax pressure in the region, which was to be expected assuming
that citizens will have difficulty evaluating the tax burden in their countries
on the basis of comparisons with the developed countries.39 The question is
whether these data undermine the viability of financing a welfare covenant
by increasing the tax burden.40 There are two answers: one is to consider
these results as symptoms of strong hostility to taxation and the other is to
interpret them in the light of the model of ignorance, which assumes that
citizens will not react strongly to changes in objective taxation.
■■
Figure II.37
Latin America (2003, 2005 and 2007): perceptions of the tax burden
(Percentages)
Q: All in all, do you think that taxes in [country] are very high, high, low, very low, or just right?
100
80
60
7
10
7
9
33
37
50
47
8
11
41
40
20
0
2003
Very high
40
2005
High
2007
Just right
Low or very low
Source: Economic Commission for Latin America and the Caribbean (ECLAC).
39
40
Indeed, it is quite likely that most citizens are not informed about the tax situation in those countries.
The decrease in hostility towards taxes in a context in which the tax burden is increasing indicates that
the public has fewer restrictions about financing a social protection covenant.
129
Chapter II
Social gaps and perceptions of inequality
Table II.2 gives data for perception of the actual tax burden and
pressure, disaggregated for the 18 countries of Latin America. Analysis of
the association between the two variables on the basis of average values
between 2003 and 2007 gives a correlation of 0.013, and if Brazil is excluded
the correlation becomes negative (-0.365). The difference between Brazil
and the other countries could be interpreted as reflecting rational ignorance,
since in that country the actual tax burden is far greater than in the rest of
the region. If individuals are “rationally ignorant” about tax levels, they will
be relatively impervious to moderate changes in levels of taxation, but this
does not explain the negative correlation without Brazil (increase in actual
tax pressure and reduction in the perception of burden).
■■
Table II.2
Actual and perceived tax burden
Latin America, 2003, 2005 and 2007
Q. All in all, do you think that taxes in (country) are very high, high, low, very low, or just right?
Tax burden (percentage)
Countries
2003
2005
2007
Percentage who think that taxes are very high
Average
2003/2005/2007
2003
2005
2007
Average
2003/2005/2007
argentina
23.4
26.8
29.1
26.5
37
35
21
31
Bolivia (Plur. State of)
17.2
20.4
20.1
19.2
29
31
18
26
Brazil
31.4
33.3
34.7
33.2
61
71
61
64
Chile
18.6
19.5
21.3
19.8
22
26
26
25
Colombia
14.0
14.9
15.6
14.9
68
55
46
57
Costa Rica
13.3
13.6
15.2
14.1
61
55
32
50
Ecuador
12.9
13.0
14.3
13.4
47
38
28
38
El Salvador
13.3
14.1
15.0
14.2
60
58
58
59
Guatemala
11.9
11.5
12.3
11.9
64
54
56
58
Honduras
15.5
15.7
17.5
16.3
52
53
46
50
Mexico
11.6
10.1
10.3
10.7
33
42
38
38
Nicaragua
18.6
20.3
22.1
20.3
63
55
45
54
Panama
14.6
14.3
16.5
15.1
51
46
44
47
Paraguay
11.3
13.0
12.6
12.3
43
43
39
42
52
Peru
14.5
15.2
17.2
15.6
Dominican Rep.
12.0
14.6
16.0
14.2
50
36
46
63
67
65
Uruguay
21.4
22.6
23.0
22.4
64
42
37
48
Venezuela (Bol. Rep. of)
11.9
15.9
17.0
14.9
50
29
19
33
Source: Latinobarómetro 2003, 2005 and 2007 and ECLAC, on the basis of official figures.
A study of the relationship between variations in the tax burden and
changes in perceptions in the period between 2003 and 2007 shows that, as
was the case for the relationship between averages, most countries in the
region are characterized by an increase in the objective tax burden and a
reduction in perceptions of the burden41 (see figure II.38): for example, in
41
130
In fact, the Pearson correlation between the differences is 0.026 (insignificant).
Latin America in the mirror. Objective and subjective dimensions of social inequity and well-being in the region
the Bolivarian Republic of Venezuela, objective tax pressure increased by 5
percentage points whereas hostility to taxation declined by 31 points and in
Argentina the actual tax burden increased by 5.7 percentage points between
2003 and 2007 and perceptions of the burden declined by - 16 points during
the same period. Comparison of the objective indicator of tax pressure
and perceptions of the burden therefore seems to show that the public is
extremely ill-informed.
However, figure II.39 shows a correlation between the share of nontax current fiscal revenue in total current revenue and perceptions of the
tax burden; as the proportion of non-tax fiscal revenue increases (or as its
complement —the amount of income collected through taxation— decreases),
perception of the burden declines. Apart from the statistical properties of the
relationship (explained variation of 44 per cent and unstandardized coefficient
B of -2.411), it is by no means clear why the public finds the amount of
financing of State expenditure from non-tax sources to be more striking (or
transparent) than tax pressure itself. In any case, the correlation observed
indicates in principle that the population does have some idea of the extent to
which government is financed by their taxes, even if some statistical controls
are necessary in order to verify the strength of the relationship.
As was observed in the chapter on the economy and perceptions of
well-being, variations in per capita GDP are associated with changes in the
■■
Figure II.38
Change in the perception of the tax burden
Latin America (2003 and 2007): real and perceiveda variations in the tax burden
(Percentage points)
Q: All in all, do you think that taxes in [country] are very high, high, low, very low, or just right?
10
Mexico
5
0
-2
-1
-5
-10
Chile
1
El Salvador
Brazil
2
3
Paraguay
Honduras
Guatemala
Panama
-15
-20
-25
-30
-35
4
6
7
Bolivia (Plur. State of)
Peru
Ecuador
Colombia
5
Nicaragua
Uruguay
Costa Rica
Argentina
Venezuela (Bol. Rep. of)
Change in the tax burden
Source: Economic Commission for Latin America and the Caribbean (ECLAC), on the basis of official figures and special
tabulations of the 2003 and 2007 Latinobarómetro surveys.
Figures for the perceived tax burden are based on the population who believes that taxes in the country are very high.
a
131
Chapter II
Social gaps and perceptions of inequality
■■
Figure II.39
Latin America (2003-2007): population who believes that taxes are very high
and percentage of non-tax fiscal incomea
(Year-on-year averages)
Q: All in all, do you think that taxes in [country] are very high, high, low, very low, or just right?
Adjusted R2 = 0.44
Percentage of those who believe that taxes are very high
70
Brazil
60
Dominican Republic
El Salvador
Nicaragua
Honduras
Guatemala
50
Colombia
Panama
Uruguay
Peru
40
Paraguay
Mexico
Argentina
30
Costa Rica
Venezuela (Bol. Rep. of)
Ecuador
Bolivia (Plur. State of)
Chile
20
10
0
0
2
4
6
8
10
12
14
Non-tax income (Percentage of GDP)
Average
Linear (Average)
Source: Economic Commission for Latin America and the Caribbean (ECLAC), on the basis of official figures and special
tabulations of the 2003, 2005 and 2007 Latinobarómetro surveys.
Non-tax income consists of treasury inflows in the form of tax receipts, interest on the placement of financial asserts in the
banking sector, proceeds from the sale of goods produced by State enterprises, fines and other types of income.
a
economic feelings of the Latin American population. Something similar
occurs in the case of perceptions of the tax burden, since the increase in
per capita GDP decreases perceptions of tax burden (measured in terms of
relative variation) (see figure II.40). This explains why perceived tax burdens
tend to decrease when tax pressure increases: hostility to taxation declined
between 2003 and 2007 because of favourable economic conditions, which
in turn permitted increases in objective tax pressure in countries. On the
other hand, there is a strong association between the perception of burden
and the share of non-tax revenue in total fiscal revenue when controls are
introduced relating to the functioning of the economy; the partial correlation
between non-tax revenue and perceived burden, controlling for GDP growth,
is -0.690 (p=0.002**) and when per capita GDP is used it remains almost the
same (r = -0.70, p=0.002**).
Other factors have been identified as predictors of tax attitudes in
research conducted in developed countries. It has been found that opinions
on taxes are related to perceptions of government performance and that
132
Latin America in the mirror. Objective and subjective dimensions of social inequity and well-being in the region
■■
Figure II.40
Latin America (2003-2007): variation in the population who believes that taxes
are very high and growth in per capita GDPa
(Year-on-year averages)
Q: All in all, do you think that taxes in [country] are very high, high, low, very low, or just right?
2.5
2.0
Change in perception of tax burden
1.5
1.0
0.5
-2.0
-1.5
-1.0
-0.5
0.0
-0.5
0.0
0.5
1.0
1.5
2.0
2.5
-1.0
-1.5
-2.0
GDP growth
Source: Economic Commission for Latin America and the Caribbean (ECLAC), on the basis of special tabulations of the 2003
and 2007 Latinobarómetro surveys.
Standardized values, median of 0 and standard deviation of 1. In the case of the perception of the tax burden, the standardized
values were the relative rates of year-on-year variation. Adjusted R-square 12%, p = 0,023, B (unstandardized) = –3.29, B
(standardized) = –0.382, n = 36 observations.
a
the positions occupied by respondents in the social structure are associated
with tax opinions in general and opinions on specific taxes (home owners are
more hostile to direct taxes and non-owners towards excise taxes) (Bowler
and Donovan, 1995). In addition, schooling and knowledge of the features
of the tax system influence attitudes towards taxation (Lowery and Sigelman,
1981: Fallan, 1999). In this connection, figure II.41 shows that respondents’
position on the social ladder influences their perceptions of tax burden:
those with more subjective income show less hostility towards taxation, while
individuals who classify themselves as being on the lower rungs of the social
ladder show more hostility towards taxes.
As regards factors relating to government performance, an interesting
indicator is whether citizens trust States to use the resources collected through
taxation. As background, it should be noted that, in 2003, 83 per cent of
the population of Latin America did not trust States to spend taxes well,
whereas in 2005 this proportion was down to 78 per cent. Despite the trend
towards greater trust, public opinions in the countries of the region regarding
the quality of spending seem to be almost as negative as perceptions of tax
burden. It should also be borne in mind that distrust regarding the use of tax
133
Chapter II
Social gaps and perceptions of inequality
■■
Figure II.41
Latin America (2003-2007): population who believes that taxes are very
high and subjective income assessmenta
Q: All in all, do you think that taxes in [country] are very high, high, low, very low, or just right?
Q: Are your wages and your family’s total income sufficient to cover your needs? Which of
these positions are you in: income sufficient to cover all needs and be able to save;
income just sufficient to needs; income insufficient to cover needs, having some difficulties;
income insufficient to cover needs, having great difficulties?
2.0
2.0
Population who think taxes are very high
1.5
1.0
0.5
0.0
-3.0
-2.0
-1.0
-0.5 -0.0
1.0
2.0
-1.0
-1.5
-2.0
-2.5
Population with insufficient income to cover needs
Source: Economic Commission for Latin America and the Caribbean (ECLAC), on the basis of special tabulations of the 2003,
2005 and 2007 Latinobarómetro surveys.
Standardized values. In the case of the perception of the tax burden, the standardization was based on the distribution of the
percentages of the population who thinks that taxes are very high, for the years 2003, 2005 and 2007, and in 18 countries of
the region. Adjusted R-square 18%, B (unstandardized) = 0.521, B (standardized) = –0.453, n = 53 observations.
a
resources declined mainly in countries with small social gaps (decline of 80 per
cent in 2003 and 64 per cent in 2005). On the other hand, in countries with
moderate gaps, the decline in distrust was much smaller (from 87 per cent
to 83 per cent) and in countries with large gaps there was very little change
(82 per cent in 2003 and 83 per cent in 2005).
An analysis of the relationship between hostility to taxation and
perceptions about the use made by States of tax revenue in the region
indicates that in general people who do not trust States to spend taxes have
a more recalcitrant attitude towards taxation than those who do, with the
largest differences found in countries with small gaps in 2003. In 2005,
the differences between trustful and distrustful individuals were quite large
in all the groups of countries (17 per cent, 15 per cent and 15 per cent in
countries with small, moderate and large gaps, respectively). These data can
134
Latin America in the mirror. Objective and subjective dimensions of social inequity and well-being in the region
■■
Figure II.42
Latin America (2003 and 2005): population who believes that taxes are very high,
by confidence in tax spending and social gaps in countries
(Percentages)
Q: All in all, do you think that taxes in [country] are very high, high, low, very low, or just right?
Q: Do you trust that tax money will be well spent by the State?
60
40
55
55
51
50
44
45
41
34
51
49
46
35
27
30
20
10
0
2003
2005
Small gaps
2003
2005
Moderate gaps
Trusts
2003
2005
Large gaps
Does not trust
Source: Economic Commission for Latin America and the Caribbean (ECLAC), on the basis of special tabulations of the 2003
and 2005 Latinobarómetro surveys.
be interpreted in different ways: for example, hostility towards taxation and
distrust regarding the use of taxes could be expressions of values and beliefs
that are individualist and hostile to government, but this interpretation is
not consistent with the results of earlier studies, in which it was observed
that the population of Latin America is inclined to be pro-state.42 Another
interpretation is that recalcitrance towards taxation could be derived from
the cost/benefit ratio which people associate with the payment of taxes, in
which perception about the use made of tax resources approximates to the
benefit perceived by people in return for payment of taxes (for example,
quantity and quality of public services).
Figure II.42 shows some of the main reasons for non-payment of
taxes43 mentioned by the population of Latin America in 1998 and 2004,
disaggregated again by countries classified on the basis of their social gaps.
In countries with small and moderate gaps, the main reason is the perception
that taxes are very high, followed to a lesser extent by corruption. On the
other hand, in countries with large gaps the main reason for non-payment of
42
43
Latinobarómetro report (2008).
Causes related to “tax mentality” (for example, dishonesty of fellow citizens) were omitted and those
related to tax policy and performance of institutions were included.
135
Chapter II
Social gaps and perceptions of inequality
taxes is corruption and the importance of this reason increased between 1998
and 2004 (from 44 per cent to 57 per cent). In the latter countries, high taxes
are given as the second reason for non-compliance with tax obligations, with
an increase in 2004 compared with 1998. In countries with large gaps, there
is also an increase in references to misuse of resources, from 31 per cent in
1998 to 45 per cent in 2004, and a high rate of perceptions of tax evasion
by those with more resources (45 per cent compared with 31 per cent and
34 per cent in countries with moderate and small gaps).
H. Conclusions
In contrast to what was found in the chapter on economy and perceptions
of well-being, in the area of social gaps and perceptions of inequality, direct
associations between objective and subjective indicators were not observed
so frequently and the two expressions of reality sometimes seemed to be
following different paths, which in some cases made it necessary to explore
situations found in selected countries and to construct ex-post explanations.
The analyses conducted also showed that social identities (or where
respondents place themselves on the social ladder) act as an interface between
the social structure of inequality and poverty (social gap) and individuals’
representations of that reality, and that they can therefore be used as an
analytical link for the understanding of the relationship between objective
and subjective data.
As regards the specific results of this exploration, although in aggregated
terms perceptions of high distributive inequity coincide with the inequality
objectively existing in Latin America, analysis of the changes in the two factors
over time showed converging trends in some countries and diverging trends
in others. This means, for example, that in some countries slight reductions
in income concentration coincided with movements in different directions
in perceptions of distributive inequity, and vice versa.
These data indicate that a policy limited to material redistribution,
slightly altering income distribution, will not suffice to change perceptions
of distributive inequality. The analysis conducted shows that distributive
perceptions must be understood in a much broader context and provides
preliminary evidence to support the hypothesis that simultaneous
redistribution of material and symbolic goods (subjective inclusion by ensuring
more dignity, recognition and opportunities for influence) is a viable way of
changing perceptions. More rigorous proof of this hypothesis is required,
because differences in perceptions could be related to factors endogenous
to countries (for example, differing memories of inequality).
136
Latin America in the mirror. Objective and subjective dimensions of social inequity and well-being in the region
Figure II.43
■■
Latin America (1998 and 2004): reasons for not paying taxes,
by social gaps in countries
Q: Why do you think people do not pay their taxes?
70
60
52
50
45
39
40
30
45
27 29
25 26
36 34
33
57
51
49
45
38
35
26
42 44
42
31
45
45
38
30 31
20
10
0
1998
2004
Small gaps
They do not see the benefits
1998
2004
1998
Large gaps
Moderate gaps
Because they are misspent
Taxes are very high
2004
Corruption
Those with the most do not pay taxes
a
Source: Economic Commission for Latin America and the Caribbean (ECLAC), on the basis of special tabulations of the 1998
and 2004 Latinobarómetro surveys.
a
This answer choice was only included in 2004.
In addition, perceptions about injustice in income distribution vary
systematically depending on the socio-economic status of persons (or class
social identity), indicating the absence in the population of Latin America
of an inter-group consensus of any significance regarding social inequality
and demonstrating the persistence of tension relating to social class. In fact,
tension between the rich and the poor is more important for the population of
the region than tension related to ethnicity, unlike the situation, for example,
in the countries of Western Europe. In addition, as distributive concentration
increases in the countries of the region, the perception of tension between
classes increases.
Both the tension perceived between persons of different races and
the opinions that ethnic majorities are the groups suffering most from
discrimination are more important in the countries which are more
heterogeneous from the ethnic-racial viewpoint and in the population which
identifies itself as belonging to the indigenous or Afrodescendent peoples.
The perception that ethnic minorities are the groups suffering most from
discrimination declined between 2001 and 2008, especially in countries with
a smaller indigenous and Afrodescendent population. Simultaneously with
the decline in the perception of ethnic minorities as the group suffering most
from discrimination, there was an increase in references to homosexuals as
the group suffering most from discrimination
137
Chapter II
Social gaps and perceptions of inequality
As regards gender-related perceptions of inequity, the perception of
tension between men and women increases as gender gaps widen in countries
and are more prevalent among women than among men. In addition, the
poorest women living in countries with the largest social gaps have the
highest levels of social isolation, showing that the domestic confinement of
women is still a major obstacle for initiatives to encourage social protection
and integration of women in the labour market. Other significant subjective
barriers to greater inclusion of women are sexist attitudes, reproducing
traditional stereotypes of gender roles, and women’s perceptions of
discrimination in the world of work.
Homicide rates are lower in countries with the smallest social gaps and
correlate with perceptions of violence but with deviations in some countries,
where very high perceptions of violence coexist with low rates of homicide,
or vice versa. In addition, perceptions of violence increase as countries’ social
gaps widen and are accentuated by perceptions of intergroup tension. The
highest victimization rates are found among persons with a higher socioeconomic status living in countries with larger social gaps, and the fact of
having been the victim of a crime increases perceptions of insecurity.
Lastly, levels of tax hostility, although they declined between 2003 and
2007, are very high in the region, which could pose a problem for the financing
of policies designed to eliminate gaps in the region. It is noteworthy that, with
the exception of Brazil, there is no correlation between the objective tax burden
and perception of the burden, but there is a relationship between tax hostility
and the extent to which the government finances its operations through taxation.
In addition, distrust regarding the use of revenue obtained from taxation and
a poor evaluation of one’s personal financial situation are linked to an increase
in tax hostility. The main reason for non-payment of taxes mentioned by the
population living in countries with the largest social gaps is corruption.
138
Latin America in the mirror. Objective and subjective dimensions of social inequity and well-being in the region
Concluding remarks
In this book, ECLAC and Latinobarómetro bring together tables from two
types of sources: official records and household surveys from the countries,
and those from public opinion surveys conducted by Latinobarómetro.
Although splicing these tables was something aspired to by Almond and
Verba as long as 50 years ago, linking the two sources for 18 Latin America
countries represents a pioneering exercise which had never been done for an
entire region and is eminently exploratory in nature.
Joining the tables is not only a matter of linking different data sources. It
also means relating perspectives from social sciences that have developed along
separate tracks. It is a task that involves economics, political economy, political
science, sociology, psychology and the relatively new discipline of comparative
politics. The introduction of public opinion studies into comparative politics
is even more recent. In this framework, theoretical approaches capable
of building bridges between the perspectives and traditions of different
disciplines are tremendously important.
The key question the authors of this book have sought to answer has to
do with the links between facts and perceptions. In particular, the work explores
the meaning of relationships, consistency (of lack of it) between objective and
subjective phenomena, and the synchronicity or asynchronicity of the changes
that occur in these two dimensions of reality.
The data analysed show evidence of both consistency and inconsistency
between objective reality and perception. Apparently, we do either hide from
reality behind the mask44 described by Octavio Paz in his Labyrinth of Solitude,
or recognize the facts as they are.
This publication looks at relations between the objective and subjective
aspects of well-bring and inequality, with the aim of arriving at a deeper
understanding of social phenomena and contributing to better public-policy
design. It also develops more complex explanations and shows up certain
statistical problems in our societies and in the conceptual frameworks within
which they are produced and interpreted.
First, there is the difficulty of using data that have been generated for
different purposes and which are sometimes not standardized across the region.
Second, the indicators available for joining the tables measure phenomena that
exist on different plains, added to the fact that measurements are not always
taken to the same level of detail. Third, generally speaking, opinion polls do
not capture facts, but the subjectivity that arises from them.
44
The mask illustrates lack of authenticity, whose first manifestation is denial of what one truly is (identity).
139
Chapter II
Social gaps and perceptions of inequality
How much of the non-correlation —or the correlation— is due to
data problems and how much is attributable to the fact of convergence —or
non-convergence— between the objective and the subjective? One possible
answer to this question is the theoretical plausibility of the relationship being
observed; but, as has been seen, the state of the theory in this regard is far
from satisfactory. Progress must be made in improving data quality and in
the design of conceptual frameworks for these purposes.
The development of more reliable measurements, specifically designed to
“combine the tables” is a possibility. Both public opinion research and studies
of regional socio-economic classifications require indicators that are valid as
well as comparable. This is particularly true in the case of studies that attempt
to compare objective and subjective data.
Perhaps the greatest contribution of this publication, in terms of its
contribution to the formulation and oversight of public policies, is that it
represents a first systematic regionwide attempt to build a broader and more
holistic picture of development, which enquires into the relations between
objective ingredients, such as per capita GDP growth and social gaps existing
in countries, and subjective or demoscopic considerations.
On specific issues, chapter I showed that per capita GDP growth is
important but that the way its benefits are distributed (the social gaps in
countries) is also important, not only in terms of present well-being but also
as regards expectations for the future. In practical terms, this means that
countries should continue to strive to attain sustainable economic growth and
to ensure that the benefits of development are distributed more equitably
among the population.
Knowledge of the nature of the relationship between subjective wellbeing, economic growth and distribution of the resulting benefits creates
important challenges for countries in terms of the responsibility with which
they administer or manage this linkage. Indeed, recent history offers many
examples in which countries of the region have pursued policies to win
popular support in the short term, compromising economic well-being and the
distribution of benefits. This may enhance the optimism and the expectations
of the population, but such policies must be responsible and sustainable.
The findings of this research also indicate that public policies should not
be limited to the material aspects of distribution, if the goal is to reduce the
perceptions of inequality existing among the population. Increasingly, policies
require the distribution of symbolic goods such as dignity and recognition
of identities and social groups which are traditionally devalued and excluded
(women, ethnic minorities, the poor), in order to promote greater social
140
Latin America in the mirror. Objective and subjective dimensions of social inequity and well-being in the region
inclusion. Inequality is a multidimensional phenomenon and, as such, requires
action to tackle its various components.
This should be reflected not only at the level of new constitutional
arrangements or in communications policies but also in the definition of
goals and in the configuration and operation of institutions geared to the
narrowing of social gaps. The fact that the population’s perceptions are so
marked by social identities of class, ethnicity and gender shows that we live
in fragmented and segmented societies, in which ties between the different
social groups are considerably weakened. Consequently, one of the tasks for
institutions is to recreate inter-group ties and to generate common spaces
for the creation of a greater sense of belonging at a group level, based on
recognition of the diversity and the characteristics of others.
In order to do this, institutions must have adequate financing and this,
as ECLAC has stated on several occasions, requires the creation of a kind of
protection and social inclusion covenant conducive to broad public support. In
this area, as this book has shown, much remains to be done. Achievement of
greater transparency in the use of tax resources, improvement of the efficiency
and impact of public action and progress in combating corruption are, at the
moment, pending tasks, at least from the citizens’ viewpoint, especially in the
countries with the highest levels of poverty and inequality.
141
Chapter II
Social gaps and perceptions of inequality
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