Bogliaccini 2013

Bogliaccini, Juan Ariel. 2013. "Trade Liberalization, Deindustrialization, and Inequality: Evidence from Middle-Income Latin American Countries". Latin American Research Review. 48 (2): 79-105.

• Introduction
• article shows that trade liberalization reform played an important role in the destruction of formal employment in industry... (79)
• ...and a concomitant deindustrialization that increased inequality
• literature review:
• two competing arguments to increase in inequality: opening to international trade, and technological improvement (82)
• this article argues that trade destroyed most job opportunities for lower social groups (83)
• in every case there was reviewed there was some development of industrial production, usually created through ISI spending
• with traded openings, these businesses could not compete and shut down
• this brings into question the theoretical claims behind the liberal model, that new export possibilities would trigger greater industrialization (85)
• Data and model
• author expects the destruction of employment to have a negative effect on inequality, and for the effect to increase as liberalization increases (88)
• author expects inequality to increase less in countries with stronger democratic institutions (89)
• Results
• two broad conclusions (90)
• trade liberalization produced significant destruction of employment in industry
• the destruction of this employment increased inequality
• as trade liberalization advanced, formal employment in industry shrank
• membership in Mercosur rsulted in loss of employment (95)
• membership in NAFTA resulted in RISE in employment
• in this model GDP per capita has a NEGATIVE relationship to employment in industry
• decrease in informal employment increases inequality in the long run, and these variables are not independent of one another over time (96)
• increase in informal sector is related to increase in inequality (97)
• increases in GDP per capita are related to increases in inequality my take: financialization?
• increase in length of time under democracy decreases inequality (98)
• Conclusions
• trade reform had a clear and detrimental effects on equality through its fostering of deindustrialization
• in particular, the Latin American version of liberalization failed to include and alternative welfare structure for coping with the deindustrialization and informalization of their economies