Trapped by Inequality: The Politics of Redistribution in Latin America

Garcia-Montoya, Laura

doi:https://doi.org/10.21985/n2-nny1-6t68

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Trapped by Inequality: The Politics of Redistribution in Latin America

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My dissertation identifies the causes of inequality traps - i.e., high and persistent levels of economic inequality - in Latin America and explains how and why some countries manage to escape such traps and embark on paths of diminishing inequality. I argue that the Redistributive State Power shapes the main redistributive institutions (e.g. tax and agrarian reform legislation) and, thereby, long-run economic inequality. I define Redistributive State Power (RSP) as the power of the state to redistribute income and wealth from the richer segments to poorer segments of the society. A country’s RSP depends on State Capacity and the Political Cohesiveness of the Economic Elite. Unlike most research on this topic, I use a small-n design to theorize on the patterns of economic inequality over the course of the twentieth century, an approach that unveils moments of divergence that are lost in cross-country statistical analyses. To test my theory, I integrate different methodological approaches. The main component is a comparison of the historical trajectories of inequality between Colombia and Peru ́. This comparison allowed me to choose two time periods characterized by mounting pressures toward redistribution and reforms to the main redistributive institutions: 1920-1940 and 1960-1970. Over the course of 10 months of fieldwork, I collected data from transcripts of congressional debates as well as official communications (e.g. government reports, discourses, correspondence) related to tax and agrarian reform legislation in these time periods. I use process-tracing and comparative methods to analyze and uncover the processes through RSP shape the politics of redistribution in the making of tax and agrarian reform legislation within each case. Finally, I test the observable implications of my argument using a large-N data-set of all countries for the period between 1960 and 2018. I find that the effect of state capacity on economic inequality is conditional on the strength of the economic elite.

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