This research will examine the successes and failures of the expansion of the global economy at income distribution between creditor and debtor nations and between social classes in Latin America. The origins of the "global economy" will be discussed and its eventual transformation from a purely liberal perspective to today's neoliberal perspective will be charted. Finally, the current impact of the neoliberal global economy on income distribution in Latin America will be assessed.
The expansion of the global economy--especially as guided by the neoliberal perspectives of the creditor countries and the International Monetary Fund--has had a dramatic, albeit less than successful, impact on economic growth in Latin American countries. The philosophy of creditor countries to promote economic growth in Latin America and elsewhere in the Third World has undergone several transformations over the last half century, ranging from a purely liberal perspective to today's neoliberal perspective. Thus far, each regime has not been successful in terms of a variety of different measures, such as growth in overall gross national product, economic independence among Latin American nations, and the distribution of income among creditor countries and debtor countries as well as among social classes within Latin America.
Income distribution is a politically explosive issue with a complex and troubled history. It has once again become an important theme in today's development debate--and for good reason, too. More than 50 years ago, the International Monetary Fund (IMF) and the World Bank were created to promote a liberal order that would give rise to global prosperity. At first glance, their mission has been successful. Between 1950 and 1992, world income increased from $4 trillion to $23 trillion. But the distribution of that income is highly skewed. Today, the richest 20 percent of the global population captures 85 percent of global income; th...