Conclusion: Summary and Final Reflections on the Sustainability and Effectiveness of Latin American Welfare Systems

Abstract

This book has studied the reasons why some Latin American countries have historically constructed more developed welfare systems than others during the preglobalization period (i.e., 1920s –1970s) and how these welfare systems have been transformed by the more recent processes of globalization and democratization that have swept Latin America during the last three decades. This concluding chapter recapitulates the main findings, highlights some limitations of the study, and suggests a number of areas for future research. The chapter is divided in two sections. The first section provides an overview of the main findings regarding (1) the historical development of welfare systems in Latin America, (2) the determinants of changes in social spending in the 1973–2003 period, and (3) the in-depth case studies of Chile, Costa Rica, and Peru. The second section briefly analyzes two of the most important challenges facing Latin American welfare systems in the future and suggests a number of issues for future research. The first challenge is how to reconcile current levels of welfare effort, or even expand them, within existing macroeconomic (especially fiscal) constraints. As the cases of Chile under Allende (1970–1973) and Peru under Garcia (1980–1985) demonstrated, to expand social welfare without paying attention to basic macroeconomic fundamentals has devastating consequences for the economy at large and the welfare state in particular. The second challenge is how to increase the effectiveness of Latin American welfare systems.