Why Isn’t Falling Inequality Making Latin America Safer?

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A common refrain for one of the root causes of violence in Latin America is the wide gap between the rich and the poor. Yet homicides in the region have continued to rise even as income inequality has fallen significantly.

Security analysts have frequently pointed to the unequal distribution of wealth in Latin America as a generator of crime and violence throughout the region, as well as in certain cities such as Salvador, Brazil. There is certainly some logic to this argument. After all, Latin America doubles as the most violent and the most unequal region in the world, according to the United Nations.

But a closer look at the data reveals surprising trends that run counter — or at least, call into question — this line of thinking.

During the first decade of the new millennium, Latin America was the only region in the world that experienced an increase in homicides. As can be seen in the graph below, this rise in violence was primarily due to a spike in the murder rates of El Salvador and Honduras, as well as the doubling, or near doubling, of homicides in Mexico, Panama, and Peru.

During that same time period, strong economic growth in Latin America was accompanied by a dramatic drop in income inequality across the region, as seen in the graph below. El Salvador’s Gini coefficient – which measures income distribution within a country — dropped by over 10 points, the second-biggest decrease of the selected countries, trailing only Bolivia.

As with homicides, Latin America’s changing inequality rate becomes even more significant when compared to trends in the rest of the world. As the gap narrowed between the rich and the poor in Latin America, it became wider all across the globe.

So during a time when homicides were on the decline and income equality rose in every other region of the world, the exact opposite occurred in Latin America (see graph below).

These lower inequality rates were due to Latin America’s expanding middle class, as opposed to stagnant income growth for the rich. Before 2000, the number of Latin Americans in poverty was about 2.5 times higher than those in the middle class, according to a 2012 report by the World Bank (pdf). By the end of the decade, an estimated 50 million people across Latin America had escaped poverty, and, for the first time ever, the size of the region’s poor and middle classes were nearly the same. This trend is noteworthy in terms of how inequality in Latin America relates to violence, since poverty is often used as a recruitment tool for criminal organizations in the region.

InSight Crime Analysis

The odd coupling of Latin America’s impressive economic performance with increased homicide rates during the 2000s suggests a reassessment of how inequality affects violence in the region may be in order. This is especially true for El Salvador’s case, which saw one of the biggest declines in income inequality yet also experienced one of the steepest increases in murder rates. El Salvador’s sharp fall in homicides in 2012 is considered to be largely due to the country’s gang truce that was signed in March of that year.

SEE ALSO: El Salvador News and Profiles

This doesn’t necessarily mean income inequality plays no role in the high levels of violence in Latin America. Despite falling Gini coefficients throughout much of the region, the divide between the rich and the poor remains more like a chasm than a fissure. “The picture of inequality dynamics in Latin America during 2000-10 evokes contradictory emotions: the levels remain unacceptably high, but the changes are undeniable and point in the right direction,” the 2012 World Bank report states.

But the data indicates the causal link between inequality and violence in Latin America may be weaker than typically thought. If this is indeed the case, it would suggest another variable likely has a much bigger impact on homicide levels in Latin America than in other parts of the world: organized crime activity. Indeed, the United Nations Office on Drugs and Crime (UNODC) 2011 Global Study on Homicide (pdf) found:

In comparison to countries in other regions, countries in the Americas have, on average, high homicide rates associated with relatively high levels of development, suggesting that factors other than development, such as organized crime, play a disproportionate role in driving homicide levels.

SEE ASLO: Coverage of Homicides

Other factors like political upheaval can also create a spurious relationship between inequality and violence, rather than one of cause-and-effect. For example, Honduras experienced unprecedented levels of violence as well as soaring income inequality in the years following a military coup in 2009.

The World Bank has yet to release Gini statistics past 2012, but the significant deceleration of Latin American economies in recent years may be reversing the remarkable advances against inequality that were made in the previous decade. Nonetheless, Latin American countries may at least take solace in knowing it’s unlikely higher levels of income inequality will have a direct impact on homicide rates.

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