World Bank

Shared prosperity and poverty eradication in Latin America and the Caribbean World Bank

Marc Notes: Over the last decade, the Latin America and the Caribbean (LAC) region has experienced a steady decline in poverty rates. This trend has been accompanied by strong income growth of the bottom 40 percent, which is the World Bank Group's indicator for measuring shared prosperity. Nonetheless, further poverty reduction and steady income growth of the bottom 40 percent face challenges as LAC has witnessed both a slowdown of economic activity and a decline in the pace of inequality reduction. This book recognizes that the emphasis on improving the welfare of the less well-off in LAC requires transformational policies that restore growth and preserve macroeconomic stability, while at the same time reinforcing the ability of the less advantaged groups to participate in and contribute to growth. Publisher Marketing: Over the last decade Latin America and the Caribbean region has achieved important progress towards the World Bank Group's goals of eradicating extreme poverty and boosting income growth of the bottom 40 percent, propelled by remarkable economic growth and falling income inequality. Despite this impressive performance, social progress has not been uniform over this period, and certain countries, subregions and even socioeconomic groups participated less in the growth process. As of today, more than 75 million people still live in extreme poverty in the region (using $2.50/day/capita), half of them in Brazil and Mexico, and extreme poverty rates top 40 percent in Guatemala and reach nearly 60 percent in Haiti. This means that extreme poverty is still an important issue in both low- and middle-income countries in the region. As growth wanes and progress in reducing the still high levels of inequality in the region slows, it will be more important than ever for governments to focus policies on inclusive growth. The book includes an overview that highlights progress towards the goals of poverty eradication and shared prosperity between 2003 and 2012, unpacks recent gains at the household level using an income-based asset model, and examines some of the policy levers used to affect social outcomes in the region. It draws on 13 country studies, eight of which are featured in this volume: Argentina, Brazil, Colombia, El Salvador, Mexico, Paraguay, Peru, and Uruguay. The other case studies include: Bolivia, Chile, Dominican Republic, Ecuador, and Honduras, which will be included in the web version of the book. Contributor Bio:  Cord, Louise TIMOTHY BESLEY is Professor of Economics at the London School of Economics and Director of Suntory Toyota International Centres for Economics and Related Disciplines. LOUISE CORD is Sector Manager at the Poverty Reduction Unit, Poverty Reduction and Economic Management Network (PREM) Vice Presidency, World Bank.