The unexplained paradox of Latin America
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2020-06-26
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en
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Latin America faces high and persistent levels of economic inequality. These persistent levels of inequality have profound consequences for its societies. Economic inequality can be decreased by wealth redistribution policies. Nonetheless, actual redistribution remains behind in the Latin American region. By using multilevel regression analysis, I have investigated this unexplained paradox of Latin America. This research focuses on the relationship between income and income inequality and support for wealth redistribution. The analysis shows that the self-interest theory is very important in explaining individual’s support for wealth redistribution, as people with a higher income have lower support for wealth redistribution. Moreover, if income inequality increases, this relationship between income and support for wealth redistribution becomes stronger. This suggests that individuals are self-interested human beings, who will do what is financially best for them. However, by using different theories, I demonstrated that this effect of self-interest works differently for different sub-groups. Individuals with post-material values are less affected by their income-level. This supports the explanatory value of the cultural theory. Moreover, young individuals and individuals with high levels of education have positive expectations of the future, which also makes them less affected by their current income-level. This indicates the importance of the social mobility theory. Surprisingly, people with high levels of political trust are more touched by the effect of income on support for wealth redistribution. More research on the principal-agent theory of trust is therefore needed. By connecting these different theories, important steps are made in solving the unexplained paradox of Latin America.
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Faculteit der Managementwetenschappen