Poverty Reduction in Brazil and Mexico. Growth, Inequality and Public Policies

This paper compares poverty reduction performance of Brazil and Mexico between 1990 and 2013, showing the great differences brought about by the substantial falls in Brazil and very limited results in Mexico. This paper explains these contrasting outcomes focusing on the interaction between growth and inequality reduction, and on the different public policies developed by each country. Mexico’s greater openness exposed the country to external shocks (a financial shock in 1995 and another in 2008, caused by the USA crisis in 2008) and, at the same time, the rise of China as a global power had a negative impact on Mexico and a positive one on Brazil. On the other hand, labour market policies were also different (i.e. in minimum wage development) and the welfare state was less developed and less generous in Mexico than in Brazil.
Miguel Carrera Troyano and Rafael Domínguez Martín
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