In This Review

The Costs of Inequality in Latin America: Lessons and Warnings for the Rest of the World
The Costs of Inequality in Latin America: Lessons and Warnings for the Rest of the World
By Diego Sánchez-Ancochea
216 pp, I.B. Tauris, 2020
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Sánchez-Ancochea contends that many of Latin America’s woes spring from its gaping economic inequality. He writes for a general audience, drawing primarily on country-by-country case studies rather than bombarding readers with data. Some broad trends leap out. Oligarchic business owners have few incentives to invest or innovate, so their firms cannot compete in global markets; smaller firms, meanwhile, suffer from a lack of access to credit. Wealthy Latin Americans evade taxes and abandon public schools, leaving the poorly educated masses to labor in low-productivity jobs. Corruption among elites also discredits democratic systems. These outcomes fuel destructive, polarizing forms of populism that further undermine democratic institutions. As the book’s subtitle warns, Latin America’s illnesses could spread to other places, where inequalities of wealth and income are becoming more apparent. Although such claims appear plausible, Sánchez-Ancochea does not adequately explain the causal relationship between inequality and these negative political outcomes, and he avoids historical examples that might refute his ideological predilections. On the brighter side, the author cites positive examples of strong social movements and allied progressive political parties that have helped make societies more equal, even though shortsighted interventions or resurgent reactionaries have too often eroded those gains.