Fair growth: economic policies for Latin America’s poor and middle-income majority

Macroeconomic vulnerability, insignificant job creation during the 1990s and reforms lacking social concern have created a sense of economic insecurity with middle-income and poor households in Latin America. This volume presents tools to make life in Latin America more equitable and fair for this silent majority.

First, it puts forward macroeconomic policies such as:

• rule-based fiscal discipline
• monetary and banking tools to smooth booms and busts
• social safety nets that trigger automatically
• more taxes on the rich and better spending on the rest

Then, policies particularly beneficial for workers are proposed:

• support for small businesses through broader access to finance and a reduction of the costs of doing business
• promotion of job mobility through the portability of social benefits, health insurance for informal sector workers and national standards for the certification of skills
• protection of workers’ rights
• reparation of rural markets through titling and increased spending on infrastructure

Further policies should respond to the needs of consumers and citizens by:

• tackling corruption
• providing schools for the poor, a performance-based school reform, enhanced accountability of schools and access to preschools for the poor
• encouraging minority groups to exercise their political and social rights and establish programs to protect women against domestic violence
• establishing consumer-driven public services in a bottom-up approach including enhanced competition and information, special efforts to reach the poor and a political strategy to deal with public opinion

Finally, the role of the United States is addressed. The US could support pro-equity reforms in Latin America by opening its markets, facilitating remittances from migrants in the US and a new focus on poverty in its war against drugs.