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Inequality in Latin America

The Role of Conditional Cash Transfer – An Interview with Armando Barrientos

24 January 2014

In this interview Professor Armando Barrientos reviews the recent UNU-WIDER project on inequality in Latin America which looks at the regional trend of decreasing inequality since 2000 and the reasons behind it.

The current trend stands out as it goes against the historical high and constantly rising inequality of the second half of the 20^th century. Barrientos briefly describes three contributory factors that became clear throughout the project: Nora Lustig et al. stress the impact of education on labour markets eroding the premium for skilled labour and contributing to greater equality by increasing the supply of skilled labour. Andrea Cornia, the director of the project, emphasizes fiscal rules and stabilization. Barrientos himself stresses the role of social policy, including conditional cash transfers (CCTs), in contributing to human development.

In Brazil, a new social contract following 20 years of dictatorship culminated in an understanding in the 1988 constitution that people have a right to social protection and that the government must make this right effective.

Barrientos stresses that CCT programmes such as Bolsa Familia (Brazil) and Oportunidades (Mexico) at 0.5% of GDP are not expensive, compared with the poverty reduction programmes of Malawi or Ethiopia which are about 4% of GDP and largely donor financed. There is an important policy discussion to be held in Africa about this approach.

Barrientos concludes his interview with a reflection on the value of the UNU-WIDER network—he emphasizes especially the openness of policy agendas and the way researchers from different regions are brought together for a cross-fertilization of ideas.

Armando Barrientos is Professor in Poverty and Social Justice, University of Manchester; Research Director, Brooks World Poverty Institute (BWPI).