Polarización, desigualdad y ayuda al desarrollo en América latina

Abstract

The aim of this article is to study whether development aid shows some empirical association with the polarization of income in Latin America. The main hypothesis to be verified is that aid flows, focused on people in the lowest income brackets, could generate lower polarization. To examine this effect, the hypothesis is first inserted into a theoretical framework related to the transfer problem, and then define the indicator of income polarization and study their evolution in 18 countries between 1990 and 2009. This is followed by an econometric regression using the Generalized Method of Moments system estimator. The main result is that aid shows a significant positive association with the polarization, which is interpreted as a lack of effectiveness in its focus on the lowest income decile or an inability to counter-rising incomes in the highest decile of income. In addition, polarization also appears positively associated with public spending and remittances and negatively with Conditional Cash Transfers.