Inequality and Poverty in Latin America

Inequality and Poverty in Latin America
ECON 4600-01/6600-01

Fall 2011

Time: Tuesday 2 – 4:15

Location: Tilton Hall 307

Instructor

Nora Lustig

Samuel Z. Stone Professor of Latin American Economics

204 Tilton Hall

Office Hours: M 4:30-5:30 or by appointment. To request an appointment please send an email to the above address.

Description
Latin America is the region with the highest levels of income inequality and where inequality has been most persistent. However, during the last decade inequality declined in most countries while it rose in other regions. Through comparative and in-depth country studies this course analyzes the dynamics of income inequality and poverty in the region focusing on the role of markets and the state. The course includes a review of quantitative methods to measure inequality and poverty and the theories and methods to analyze their determinants. Using a qualitative scorecard, students will learn to assess government efforts to reduce inequality and poverty. The course is largely non-technical and open to graduate and undergraduate students in the social sciences.

Prerequisites: Introductory Macro and Microeconomics or by permission of instructor.

Objective and Learning Outcomes

The purpose of this course is to develop a broad understanding of the dynamics of inequality and poverty in Latin America and how market forces and government policies affect those dynamics. By the end of the course, students should have learned: 1. existing methods to measure inequality and poverty, their properties and limitations; 2. the facts on inequality and poverty in Latin America and where to find them; 3. existing theories and methods to analyze the causes and consequences of inequality and poverty and apply them to the countries covered in the course; and, 4. to apply a qualitative scorecard to assess Latin American governments’ commitment to reduce inequality and poverty.

Program Outcomes

This course contributes to the program outcomes for the BA and BS degrees in Economics by allowing students to develop and demonstrate competency in specialized fields (income distribution and poverty). It contributes to the program outcomes of Economics and LAS graduate degrees by allowing students to also gain knowledge on specific geographic areas (Latin America).

Organization

The course will be conducted as a seminar. Students are expected to actively participate in class and interact with the instructor and each other. Careful and critical reading of the materials is a key component of this course.

Readings

Most of the reading materials can be downloaded or will be posted on blackboard. There are quite a few references under each subject; students should exercise their judgment in choosing those to read in detail.

Assignments and Grading

The course will have two assignments (see details below). Each assignment will consist of an in-class presentation and a paper. The class will be divided in teams depending on class size. The teams will be responsible for the in-class presentations and the papers; the grade shall be the same for all members of the team.

Presentations: In-class presentations should be about 20-30 minutes long and use power point. The power point file must be submitted to the professor at least one day before the presentation. Students are encouraged to use web sources during their presentations, especially for Assignment 1.

Other students will be previously selected to give comments and lead-off the discussion. The dates for in-class presentations will be determined at the beginning of the semester. The date cannot be changed unless the student produces signed evidence of a medical or family emergency. Without such evidence, the grade for the in-class presentation will equal F.

Papers: For undergraduates, each paper will have to be approximately 5 pages long (font size 12; double space), including tables and graphs. For graduate students, each paper will have to be 10 pages long (font size 12; double space) including tables and graphs and use at least one bibliographical source not included in the syllabus (which should be highlighted in yellow in the references of the papers). Papers should be submitted electronically (via e-mail). Please make sure to put your name and date in the top right hand corner or below the title. Papers should include a section with bibliographical references. You can present the bibliography in the style of your preference as long as it includes all the standard information. Also, remember to properly label graphs and add as many explanatory notes as needed. Every table and graph should mention its sources, including the page numbers of the source when applicable.

The due dates for the papers are: October 14 (Friday) for Assignment 1 and December 9 (Friday) for Assignment 2. If a student cannot deliver the paper by the due date, s/he must produce signed evidence of a medical or family emergency. Without such evidence, the grade for the paper will equal F.

Grading: Each assignment will count for 45 percent of the grade: 10 percent for the in-class presentation, 5 percent for leading off the discussion and 30 percent for the paper. The grading of the presentation and discussion will be based on effort (you will not be “punished” for making mistakes)

Attendance, punctuality and participation in class are required and will count for 10 percent of the grade. Students are allowed to miss only one class without excuse. If more than one class is missed (fully or partially), students will be excused only for valid medical or family emergencies. Students must produce signed evidence (by the relevant authority) verifying the reason why they missed, were late to, or had to leave early from a class. Without the signed evidence, the grade for attendance will be equal to F. If a student misses 4 classes or more, s/he will receive an incomplete for the course.

Academic honesty

All students are responsible for knowing and adhering to Tulane University’s Honor Code, available at http://www.tulane.edu/~jruscher/dept/Honor.Code.html .

Assignments for in-class presentations and papers

At the beginning of the semester, each student will select (or be assigned) a country and dates for the two required presentations.

Assignment #1: Assessing the availability and quality of data on inequality and poverty.

Collect information on inequality and poverty from different sources for “your” country for as far back as you can. Typical sources include, for example, CEPAL, IADB, National Statistical Institutes, SEDLAC, World Bank’s POVCAL, World Bank’s Poverty Assessments, World Bank’s World Development Indicators, and MDG Monitoring (web-links are mentioned at the bottom of the syllabus). Using the existing information from at least CEPAL, SEDLAC, WB POVCAL and WB Poverty Assessments, describe what happened to inequality and poverty in “your” country. Are there discrepancies among sources? Are there inconsistencies? What could be the causes? Do trends differ? How do the inconsistencies or discrepancies affect your analysis of the levels and trends in inequality and poverty during the period of analysis? Are results sensitive to the use of alternative inequality and poverty measures? This paper should be written as a memo to the agencies describing the problems and inconsistencies you encountered as well as the questions you want to pose to them.

Assignment #2: Assessing fiscal policy’s impact on poverty and inequality.

Using the Commitment to Equity framewok as guidance, assess the extent to which government fiscal policies in “your” country bring about a sustained reduction in poverty and inequality—and the extent to which they block such a reduction. Which are the most important policy changes that should be implemented to reduce inequality and poverty in the country or countries you assessed?

----------------- 0 ----------------

Session 1: August 30 – Introduction to the course. Concepts, Measurement and Trends in Poverty and Inequality

Rosling’s Ted Talk on Poverty (Video)

http://www.ted.com/index.php/talks/hans_rosling_reveals_new_insights_on_poverty.html

World Bank, World Development Report 2000/01: Attacking Poverty. (Overview chapter) http://siteresources.worldbank.org/INTPOVERTY/Resources/WDR/overview.pdf

World Bank, World Development Report 2006: Equity and Development, (Overview chapter). http://wdsbeta.worldbank.org/external/default/WDSContentServer/IW3P/IB/2005/09/20/000112742_20050920110826/additional/841401968_200508263001833.pdf