Growth, inequality and poverty in selected Caribbean and Latin American countries, with emphasis on Guyana

Journal of Latin American Studies

Volumn 30, Issue 3, 1998, Pages 591-617

  Gafar, John ^a  

^a LONG ISLAND UNIVERSITY   (United States)

Author keywords

[No Author keywords available]

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EID: 0008697777     PISSN: 0022216X     EISSN: None     Source Type: Journal    
DOI: 10.1017/S0022216X98005173     Document Type: Article

References (66)

1. It should be stressed that this article relies heavily on (and borrows freely from) World Bank reports and studies conducted under World Bank auspices. I am not in a position to generate my own data, and take no credit for the findings by the World Bank. The aim of this study is to make accessible to students on Latin American and the Caribbean some of the evidence on inequality and poverty in a single source. I apologise for this over reliance on World Bank data, but, sadly, the World Bank data are all that is available.
2. World Bank, World Development Report 1990 (New York, 1990), p. 26.
3. Amartya Sen, 'A Sociological Approach to the Measurement of Poverty: A Reply to Professor Peter Townsend', Oxford Economic Papers, vol. 37, no. 4 (1985), p. 669.
4. See Hollis Chenery, Montek Ahluwalia, Clive Bell, John Duloy and Richard Jolly, Redistribution with Growth (New York, 1974).
5. For a discussion of the World Bank's experience with poverty programmes, see World Bank, Poverty Reduction and the World Bank: Progress and Challenges in the 1990s. (Washington, D.C., 1996).
6. Pranab Bardhan, 'Research on Poverty and Development Twenty Years after Redistribution with Growth' in Michael Bruno and Boris Pleskovic (eds.), Annual World Bank Conference on Development Economics 1995 (World Bank, 1996), pp. 59-72.
7. Montek Ahluwalia, 'Comment on Inequality, Poverty, and Growth: Where Do We Stand?' by Albert Fishlow, in Michael Bruno and Boris Pleskovic (eds.), Annual World Bank Conference on Development Economics 1995, pp. 59-72.
8. Albert Fishlow, 'Brazilian Size Distribution of Income', American Economic Association Papers and Proceedings, vol. 62, no. 2 (1972), pp. 391-402.
9. See Gary Fields, Poverty, Inequality and Development, (Cambridge, 1980), pp. 47-50, for a discussion of this point.
10. For a discussion of poverty reducing strategies see World Bank, World Development Report 1990.
11. World Bank, Poverty Reduction and the World Bank: Progress and Challenges, p. 18.
12. Martin Ravallion, 'Growth and Poverty: Evidence for developing countries in 1980S', Economic Letters, vol. 48 (1995), pp. 411-417.
13. Nancy Birdsall and Richard Sabot, 'Asset Inequality: An Assessment of the World Bank's Approach to Poverty Reduction', American Economic Review, Papers and Proceedings, vol. 87, no. 2 (1997), P. 35.
14. Simon Kuznets, 'Economic Growth and Income Equality', American Economic Review, vol. 65, no. 1 (1955), pp. 1-28.
15. See Montek Ahluwalia, 'Income Inequality: Some Dimensions of the Problem', in Hollis Chenery et al., Redistribution with Growth, pp. 3-37; and Montek Ahluwalia, 'Inequality, Poverty and Development', Journal of Development Economics, vol. 6 (1976), PP. 307-342.
16. See Montek Ahluwalia, 'Income Inequality: Some Dimensions of the Problem', in Hollis Chenery et al., Redistribution with Growth, pp. 3-37; and Montek Ahluwalia, 'Inequality, Poverty and Development', Journal of Development Economics, vol. 6 (1976), PP. 307-342.
17. Michael Todaro, Economic Development 5th ed. (New York, 1994), p. 155.
18. The reader should refer to the statistical evidence summarised in Gary Fields, Poverty, Inequality, and Development.
19. Sudhir Anand and S. M. Ravi Kanbur, 'The Kuznets Process and the Inequality Development Relationship', Journal of Development Economics, vol. 40 (1995), pp. 25-52
20. Lionel Demery, Binayak Sen and Tara Vishwanath, 'Poverty, Inequality and Growth', ESP Discussion Paper Series No. 70, The World Bank, June 1995.
21. The econometric evidence reported by Michael Bruno, Martin Ravallion and Lyn Squire, 'Equity and Growth in Developing Countries: Old and New Perspectives on the Policy Issues', Policy Research Working Paper 1565, The World Bank, January 1996 showed that growth reduces absolute poverty. These authors found no sign in the cross-country data to suggest that growth has any significant or systematic effect on inequality.
22. Ralph Henry, 'Inequality in Plural Societies: An Exploration', Social and Economic Studies, vol. 38, no. 2 (1989), pp. 69-110; and P. K. Watson, 'Income Inequality Comparisons in Trinidad and Tobago: Some Methodological Issues', Research Papers No. 12, Central Statistical Office, Trinidad and Tobago (1983), pp. 81-92.
23. Ralph Henry, 'Inequality in Plural Societies: An Exploration', Social and Economic Studies, vol. 38, no. 2 (1989), pp. 69-110; and P. K. Watson, 'Income Inequality Comparisons in Trinidad and Tobago: Some Methodological Issues', Research Papers No. 12, Central Statistical Office, Trinidad and Tobago (1983), pp. 81-92.
24. The reader should consult Samuel Morley, Poverty and Inequality in Latin America: Past Evidence, Future Prospects, Overseas Development Council Essay No. 13, (Washington, D.C. 1994); Samuel Morley, Poverty and Inequality in Latin America: The Impact of Adjustment and Recovery in the 1980S (Baltimore, 1995); and Samuel Morley, 'Structural Adjustment and Determinants of Poverty in Latin America' in Nora Lustig (ed), Coping with Austerity, Poverty and Inequality in Latin America (Washington, D.C. 1995), pp. 42-70.
25. The reader should consult Samuel Morley, Poverty and Inequality in Latin America: Past Evidence, Future Prospects, Overseas Development Council Essay No. 13, (Washington, D.C. 1994); Samuel Morley, Poverty and Inequality in Latin America: The Impact of Adjustment and Recovery in the 1980S (Baltimore, 1995); and Samuel Morley, 'Structural Adjustment and Determinants of Poverty in Latin America' in Nora Lustig (ed), Coping with Austerity, Poverty and Inequality in Latin America (Washington, D.C. 1995), pp. 42-70.
26. The reader should consult Samuel Morley, Poverty and Inequality in Latin America: Past Evidence, Future Prospects, Overseas Development Council Essay No. 13, (Washington, D.C. 1994); Samuel Morley, Poverty and Inequality in Latin America: The Impact of Adjustment and Recovery in the 1980S (Baltimore, 1995); and Samuel Morley, 'Structural Adjustment and Determinants of Poverty in Latin America' in Nora Lustig (ed), Coping with Austerity, Poverty and Inequality in Latin America (Washington, D.C. 1995), pp. 42-70.
27. United Nations Development Programme (UNDP), Human Development Report 1995 (New York, 1995) and various issues of this report. Some of the conceptual issues and statistics utilised here rely heavily on the Human Development Reports (HDR).
28. See UNDP, Human Development Report 1995, pp. n-11-12.
29. World Bank, Poverty Reduction and the World Bank: Progress and Challenges in the 1990s, P. 10.
30. Samuel Motley, Poverty and Inequality in Latin America: The Impact of Adjustment and Recovery in the 1980s, p. 46.
31. Albert Fishlow, 'Inequality, Poverty, and Growth: Where Do We Stand?' in Michael Bruno and Boris Pleskovic (eds.), Annual World Bank Conference on Development Economics 1995, pp. 25-39.
32. John Gafar, 'Real Wages and Output: Some Evidence from Latin American and Caribbean Countries', mimeo unpubl., 1996.
33. Samuel Morley, Poverty and Inequality in Latin America: Past Evidence, Future Prospects, P. 27.
34. Michael Todaro, Economic Development, p. 140.
35. World Bank, World Development Report 1990, p. 32.
36. Alan Riding, 'The Struggle for Land in Latin America', New York Times, Sunday edition, March 26, 1989, Section 4, p. E1.
37. Albert Fishlow, 'Inequality, Poverty and Growth: Where Do We Stand?', p. 29.
38. Nancy Birdsall and Richard Sabot, 'Inequality As a Constraint in Latin America', Development Policy: Newsletter on Policy Research by the Inter-American Development Bank, September 1994, pp. 1-5.
39. See Samuel Morley, Poverty and Inequality in Latin America: Past Evidence, future Prospects, p. 80, footnote 10.
40. World Bank, Poverty Reduction and the World Bank: Progress and Challenges in the 1990s, p. 5.
41. Ibid, p. 4, Table 1.2.
42. See World Bank, Guyana: Strategies for Reducing Poverty Report No. 12861-GUA, p. I. This section benefited from World Bank, Guyana: From Economic Recovery to Sustained Growth, (Washington, D.C., 1993) and World Bank, Guyana: Public Section Review (Washington, D.C., 1993) reports; Clive Thomas, 'Lessons from Experience: Structural Adjustment and Poverty in Guyana', and John Gafar, 'Guyana: From Cooperative Socialism to Economic Liberalization and Growth: 1976-1994', The Journal of Developing Areas, vol. 31, no. 1 (1996) pp. 41-74. Much of this section of this paper relies on the World Bank, Guyana: Strategies for Reducing Poverty: Report No. 121861-GUA (here-in-after referred to as World Bank, Report No. 12861); and we take no credit and lay no claim to the originality regarding the findings of poverty in Guyana. I believe, rightly or wrongly, that rather than letting the World Bank Report No. 12861-GUA remain in archives gathering dust, a summary of its findings is appropriate to publish for the benefit of researchers and policy debate.
43. See World Bank, Guyana: Strategies for Reducing Poverty Report No. 12861-GUA, p. I. This section benefited from World Bank, Guyana: From Economic Recovery to Sustained Growth, (Washington, D.C., 1993) and World Bank, Guyana: Public Section Review (Washington, D.C., 1993) reports; Clive Thomas, 'Lessons from Experience: Structural Adjustment and Poverty in Guyana', and John Gafar, 'Guyana: From Cooperative Socialism to Economic Liberalization and Growth: 1976-1994', The Journal of Developing Areas, vol. 31, no. 1 (1996) pp. 41-74. Much of this section of this paper relies on the World Bank, Guyana: Strategies for Reducing Poverty: Report No. 121861-GUA (here-in-after referred to as World Bank, Report No. 12861); and we take no credit and lay no claim to the originality regarding the findings of poverty in Guyana. I believe, rightly or wrongly, that rather than letting the World Bank Report No. 12861-GUA remain in archives gathering dust, a summary of its findings is appropriate to publish for the benefit of researchers and policy debate.
44. See World Bank, Guyana: Strategies for Reducing Poverty Report No. 12861-GUA, p. I. This section benefited from World Bank, Guyana: From Economic Recovery to Sustained Growth, (Washington, D.C., 1993) and World Bank, Guyana: Public Section Review (Washington, D.C., 1993) reports; Clive Thomas, 'Lessons from Experience: Structural Adjustment and Poverty in Guyana', and John Gafar, 'Guyana: From Cooperative Socialism to Economic Liberalization and Growth: 1976-1994', The Journal of Developing Areas, vol. 31, no. 1 (1996) pp. 41-74. Much of this section of this paper relies on the World Bank, Guyana: Strategies for Reducing Poverty: Report No. 121861-GUA (here-in-after referred to as World Bank, Report No. 12861); and we take no credit and lay no claim to the originality regarding the findings of poverty in Guyana. I believe, rightly or wrongly, that rather than letting the World Bank Report No. 12861-GUA remain in archives gathering dust, a summary of its findings is appropriate to publish for the benefit of researchers and policy debate.
45. See World Bank, Guyana: Strategies for Reducing Poverty Report No. 12861-GUA, p. I. This section benefited from World Bank, Guyana: From Economic Recovery to Sustained Growth, (Washington, D.C., 1993) and World Bank, Guyana: Public Section Review (Washington, D.C., 1993) reports; Clive Thomas, 'Lessons from Experience: Structural Adjustment and Poverty in Guyana', and John Gafar, 'Guyana: From Cooperative Socialism to Economic Liberalization and Growth: 1976-1994', The Journal of Developing Areas, vol. 31, no. 1 (1996) pp. 41-74. Much of this section of this paper relies on the World Bank, Guyana: Strategies for Reducing Poverty: Report No. 121861-GUA (here-in-after referred to as World Bank, Report No. 12861); and we take no credit and lay no claim to the originality regarding the findings of poverty in Guyana. I believe, rightly or wrongly, that rather than letting the World Bank Report No. 12861-GUA remain in archives gathering dust, a summary of its findings is appropriate to publish for the benefit of researchers and policy debate.
46. See World Bank, Guyana: Strategies for Reducing Poverty Report No. 12861-GUA, p. I. This section benefited from World Bank, Guyana: From Economic Recovery to Sustained Growth, (Washington, D.C., 1993) and World Bank, Guyana: Public Section Review (Washington, D.C., 1993) reports; Clive Thomas, 'Lessons from Experience: Structural Adjustment and Poverty in Guyana', and John Gafar, 'Guyana: From Cooperative Socialism to Economic Liberalization and Growth: 1976-1994', The Journal of Developing Areas, vol. 31, no. 1 (1996) pp. 41-74. Much of this section of this paper relies on the World Bank, Guyana: Strategies for Reducing Poverty: Report No. 121861-GUA (here-in-after referred to as World Bank, Report No. 12861); and we take no credit and lay no claim to the originality regarding the findings of poverty in Guyana. I believe, rightly or wrongly, that rather than letting the World Bank Report No. 12861-GUA remain in archives gathering dust, a summary of its findings is appropriate to publish for the benefit of researchers and policy debate.
47. See World Bank, Guyana: Strategies for Reducing Poverty Report No. 12861-GUA, p. I. This section benefited from World Bank, Guyana: From Economic Recovery to Sustained Growth, (Washington, D.C., 1993) and World Bank, Guyana: Public Section Review (Washington, D.C., 1993) reports; Clive Thomas, 'Lessons from Experience: Structural Adjustment and Poverty in Guyana', and John Gafar, 'Guyana: From Cooperative Socialism to Economic Liberalization and Growth: 1976-1994', The Journal of Developing Areas, vol. 31, no. 1 (1996) pp. 41-74. Much of this section of this paper relies on the World Bank, Guyana: Strategies for Reducing Poverty: Report No. 121861-GUA (here-in-after referred to as World Bank, Report No. 12861); and we take no credit and lay no claim to the originality regarding the findings of poverty in Guyana. I believe, rightly or wrongly, that rather than letting the World Bank Report No. 12861-GUA remain in archives gathering dust, a summary of its findings is appropriate to publish for the benefit of researchers and policy debate.
48. World Bank, Report No. 12861-GUA, p. 3.
49. World Bank, Caribbean Countries: Poverty Reduction and Human Resource Development in the Caribbean. Report No. 15342-LAC, p. ix. (This will here-in-after be referred to as World Bank, Report No. 15342-LAC).
50. For a discussion of this, see John Gafar, 'Guyana: From Cooperative Socialism to Economic Liberalization and Growth: 1976-1994', p. 46. Public sector wages have been depressed (in some cases about one-third or one-half of that prevailing in the private sector). Most Afro-Guyanese are employed in the public sector, and depressed public sector wages have placed more Afro - Guyanese in poverty, and led to rent seeking activities by public employees, and the pervasiveness of corruption in the public sector. The worsening of the economic condition of Afro - Guyanese has led to political instability in the country, and this partly explains why the main political opposition party, the Peoples National Congress (PNC), an Afro - Guyanese dominated political party, rejected the results of an apparently free and fair general election on December 15, 1997. The ruling party, the Peoples Progressive Party (PPP) is Indo - Guyanese dominated, and, with racial voting firmly entrenched, the PNC is likely to come second in any election, however free. The security forces, which is more than 70 per cent Afro - Guyanese may well determine the fate of economic reforms and democracy. There is some anecdotal evidence to suggest that economic liberalisation has led to increased employment and increased wages in the agricultural (rural) areas. Indo-Guyanese are engaged primarily in agricultural activities. And, the data suggest that the wage rate in the agricultural areas is roughly double that of the minimum wage for public sector employees in 1995; which suggests that Indo - Guyanese are beneficiaries of the recent economic expansion.
51. See B. McFeeters, 'Guyana: The Economy', in Tim Merrill (ed.), Guyana and Belize: Country Studies, 2nd edition (U.S. Federal Research Division, Library of Congress, Washington, D.C., 1993), pp. 65-106.
52. Reported in World Bank, Report No. 15342-LAC, p. 192, Table 40.
53. Every effort was made to get hold of the actual survey data, but were not successful. The World Bank guards its data base under the rubic of confidentiality. The third world statistical agencies are even more zealous; they stamp anything, and that can be anything, under the rubic of confidentiality. This author is aware of numerous instances where the information is already in the public domain in third world countries, and yet the governments of these countries would officially label the information as 'confidential'. I believe the international organisations stationed in the US (e.g. World Bank, IABD and IMF) should be required to open up their data files to researchers. In these circumstances I am forced to rely on the World Bank, Report No. 12861-GUA.
54. Jean Dreze and Amartya Sen, India Economic Development and Social Opportunity (Delhi, 1995), P. 69.
55. See World Bank, Report No. 12861-GUA, p. 11 and K. Sundaram and S. D. Tendulkar, 'Poverty in Asia and the Pacific: Conceptual Issues and National Approaches to Measurement', in Economic and Social Commission for Asia and the Pacific, Economic Bulletin for Asia and the Pacific, (New York, vol. XLIV, no. 2, December 1993), pp. 42-58.
56. See World Bank, Report No. 12861-GUA, p. 11 and K. Sundaram and S. D. Tendulkar, 'Poverty in Asia and the Pacific: Conceptual Issues and National Approaches to Measurement', in Economic and Social Commission for Asia and the Pacific, Economic Bulletin for Asia and the Pacific, (New York, vol. XLIV, no. 2, December 1993), pp. 42-58.
57. World Bank, Report No. 15342-LAC, p. 3.
58. World Bank, Report No. 12861-GUA, p. 19.
59. See World Bank, Report No. 15342-LAC, p. 21 and p. 172.
60. This is discussed in World Bank, World Development Report 1990, p. 37.
61. World Bank, Trinidad and Tobago: Poverty and Unemployment in an Oil Based Economy. Report No. 14382-TR, (Washington, D.C., October 27, 1995), p. 127.
62. Graduates from technical schools and universities (not primary school) are the first to pack their briefcases and migrate. Allocations of resources to higher learning is a subsidy to the brain drain. According to World Bank Report No. 15342-LAC, p. 24 most of the people who migrated from the Caribbean were skilled people. The statistics indicate that about half of the skilled people who graduated from the Dominican Republic, Guyana, and Jamaica emigrated between 1980-1986.
63. World Bank, Report No. 12861-GUA, p. 73.
64. See World Bank, Guyana: From Economic Recovery to Sustained Growth, pp. 76-79 and World Bank, Report No. 12861-GUA, pp. 52-64.
65. See World Bank, Guyana: From Economic Recovery to Sustained Growth, pp. 76-79 and World Bank, Report No. 12861-GUA, pp. 52-64.
66. World Bank, Report No. 12861-GUA, p. 61.