Understanding the Political Economy behind the Latin American Paradox: Managing Good Economic Performance but Social Discontent (2000–2017)

Abstract

Between 2000 and 2017, Latin America presented a positive economic performance, with an average GDP growth of 2.6%. This helped in the decrease of unemployment, poverty and inequality rates. Nevertheless, improvements prove to be deficient and did not better social discontent and mistrust. Hence, Latin America experienced a paradox of economic growth but simultaneous social unrest and conflicts. The present aims to address the dynamics of the paradox and provide an explanation for its occurrence. This is achieved through an analysis of the policies used by the states regarding social expenditure and macroeconomic stability, as well as their overall performance fulfilling their role as governments. It is argued that the lack of institutional presence of the government in the poorest sectors was the reason they failed in translating the economic growth into welfare.