Inequality in Twentieth-Century Latin America: Path Dependence, Countermovements, and Reactive Sequences

Most recent explanations of social welfare and development outcomes have focused on the role and impact of formal institutional arrangements, particularly the state. The institutional legacies of colonial rule and the role of democratic institutions have been common explanatory variables. This article focuses on the historical origins, persistence, and increases in inequality in Mexico and Chile during the twentieth century. It argues that despite important historical economic and political institutional differences, similar processes account for the unequal distributional outcomes that characterize the two cases. Critical conjunctures involved bitter struggle between social groups. While popularly based countermovements (along the lines predicted by Karl Polyani) arose periodically and struggled to improve social conditions, these movements were unable to alter the underlying sources of inequality. By mid-twentieth century, popular pressure had been able to exact only an unequal form of embeddedness (or social protection from the market) that contributed to inequality. Further, waves of popular mobilization linked to critical conjunctures produced reactive historical sequences involving fierce resistance from propertied elites and their middle-class allies. This resistance inevitably gave rise to new conjunctures ushering in new institutional arrangements that entrenched or increased inequality. The absence of a distributive settlement between propertied classes and popular groups was at the heart of the mobilization and countermobilization cycles in both cases; indeed, it was the depth of this disagreement, particularly the disagreement over private property, that fueled reactive sequences and their unequalizing outcomes.