Abstract
Social capital is considered a productive resource for societies. The increase in social trust is usually related to both economic growth and a reduction in inequality. In Latin American countries, and particularly the economies that belong to the Pacific Alliance, the relationship between social capital and income inequalities has not been studied at regional level. The paper aims to analyze whether social capital impacts income inequality in the case of the Pacific Alliance regions. Dynamic panel data models were used, covering 72 regions during the period 2002-2011. The results show that the decline in generalized trust and congress trust impacts negatively income inequality, while government trust, police trust and company trust have not effect.
Highlights
The theory of capital is increasingly relevant in regional studies (Borozan and Funaric, 2016; Bengoa, Román and Pérez, 2017)
In Latin American countries, and the economies that belong to the Pacific Alliance, the relationship between social capital and income inequalities has not been studied at regional level
Based on the results of income distribution at a regional and country level, our attention is drawn to analyzing whether advances in social capital reduce intraregional income inequality for the regions of the countries that belong to the Pacific Alliance
Summary
The theory of capital is increasingly relevant in regional studies (Borozan and Funaric, 2016; Bengoa, Román and Pérez, 2017). Through cooperation in collective actions and participation in decision-making, an increase in generalized and institutional trust should act as a means of reducing economic inequality (Knack and Keefer, 1997; Putnam, 2000; Ram, 2012; Wang and Lu, 2016). In the Pacific Alliance countries, social capital is unevenly distributed, with a low contribution to the economy, because different actions have been taken and with little importance to the implementation of social policies that help increase social capital. Based on the results of income distribution at a regional and country level, our attention is drawn to analyzing whether advances in social capital reduce intraregional income inequality for the regions of the countries that belong to the Pacific Alliance. The research question arises due to DIEM (1) 2022 the fact, shown by Putnam (2000), that the societies which present a higher rate of participation in networks, civic norms and trust, have economic equality within the members of a society, on the contrary, if they lack this resource, income inequalities will be persistent
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