Inequality in Brazil
I. Introduction
Brazil is almost as famous for its inequality as for its soccer. According toFacing Up to Inequality in Latin America, the IDB (1998) ranked both Brazil's total Gini coefficient1 (0.60) and its urban-only Gini coefficient (0.57) as the highest in the region. Its ratio of per-capita urban to per-capita rural household incomes (3.0) was also the highest in Latin America. The World Bank's point estimates for Gini coefficients, listed in Attacking Poverty (WDR 2001) for as many countries as the Bank dares, include only two countries higher than Brazil: Sierra Leone and the Central African Republic.
There is very little doubt that Brazil has one of the most unequal income distributions in the world. Furthermore, while most fellow unequal societies - Sierra Leone, CAR, Paraguay and Guatemala – are relatively small countries, Brazil has the fifth largest population and the eighth largest GNP in the world.
Poverty and Income Distribution: linked but different
Income inequality is not the same as poverty, although the two issues are closely related in Brazil's case. One can imagine, for example, a policy in Brazil that would eliminate poverty (by any absolute measure) and yet leave the income distribution highly uneven. Furthermore, measures to eliminate poverty are easier to envision because they focus on relatively easily identifiable subpopulations, such as… . Attacking income distribution, on the other hand, requires attention to the entire population. Most of the relevant debate in Brazil and abroad has been over eliminating poverty, not reducing income inequality.
Because income distribution involves a relationship, not absolute levels of deprivation, moreover, it is more difficult to address. In this paper, we will review the current debate on inequality in Brazil by addressing the factors that may increase or reduce income inequality.
Modern-Day Economic Causes of Brazil's Persistent Income Inequality
The reasons for Brazil's enormous
Brazil is almost as famous for its inequality as for its soccer. According toFacing Up to Inequality in Latin America, the IDB (1998) ranked both Brazil's total Gini coefficient1 (0.60) and its urban-only Gini coefficient (0.57) as the highest in the region. Its ratio of per-capita urban to per-capita rural household incomes (3.0) was also the highest in Latin America. The World Bank's point estimates for Gini coefficients, listed in Attacking Poverty (WDR 2001) for as many countries as the Bank dares, include only two countries higher than Brazil: Sierra Leone and the Central African Republic.
There is very little doubt that Brazil has one of the most unequal income distributions in the world. Furthermore, while most fellow unequal societies - Sierra Leone, CAR, Paraguay and Guatemala – are relatively small countries, Brazil has the fifth largest population and the eighth largest GNP in the world.
Poverty and Income Distribution: linked but different
Income inequality is not the same as poverty, although the two issues are closely related in Brazil's case. One can imagine, for example, a policy in Brazil that would eliminate poverty (by any absolute measure) and yet leave the income distribution highly uneven. Furthermore, measures to eliminate poverty are easier to envision because they focus on relatively easily identifiable subpopulations, such as… . Attacking income distribution, on the other hand, requires attention to the entire population. Most of the relevant debate in Brazil and abroad has been over eliminating poverty, not reducing income inequality.
Because income distribution involves a relationship, not absolute levels of deprivation, moreover, it is more difficult to address. In this paper, we will review the current debate on inequality in Brazil by addressing the factors that may increase or reduce income inequality.
Modern-Day Economic Causes of Brazil's Persistent Income Inequality
The reasons for Brazil's enormous