growth of tax revenues in Latin America has been the fastest in the world, and this growth has translated to higher spending to reduce inequality. For instance, between 2002 and 2011, income inequality dropped in 14 of the 17 countries where there is comparable data.During this period, approximately 50 million people moved into the middle class, meaning that for the first time ever, more people in the region belong to the middle class than are living in poverty.
The report continues:
By some estimates, social spending as a percentage of GDP across Latin American countries increased by 66 percent over the past twenty years. The impact is noticeable, given that not long ago the region had among the lowest public spending levels in the world. Increased spending on health and education has had the greatest impact on inequality reduction.
The report concludes with a set of recommendations, including:
- Stronger regulation of markets;
- Curbing the power of the rich to influence political processes and policies that best suit their interests.
- Cracking down on financial secrecy and tax dodging;
- Redistributive transfers; and strengthening of social protection schemes;
- Investment in universal access to free healthcare and education;
- Progressive taxation;
- Strengthening wage floors and worker rights;