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Income Redistribution and Elections in Latin America

Open Panel

Abstract

In this paper, I analyze how the spread of Conditional Cash Transfer (CCT) programs across Latin America has impacted on incumbents’ electoral performances. The direct transfer of cash to poor families, attached to educational and health conditionalities, has been associated with the recent reduction of poverty and income inequality in the continent, and incumbents have extensively advertised these positive effects during their reelection bids. The emphasis on CCT programs during incumbents’ campaigns led scholars to inquiry about their real effect on electoral results. The current consensus is that these programs have increased the incumbents’ support among the poor, helping them to get reelected. Without contradicting these findings, I show that CCT programs were also opposed by the upper classes in every country where they were implemented. This opposition led the Nicaraguan government to discontinue its CCT program (Red de Protección Social) in 2006, and remains an important source of pressure against their continuation and expansion in other countries. I claim that targeted income redistribution triggers electoral polarization across social classes, and is, therefore, a risky electoral strategy. To estimate this polarization effect, I analyzed electoral and survey (LAPOP) data from eighteen Latin American countries, and found that the larger and more expensive the program was, and the more inegalitarian the country is, the stronger was the program’s polarizing effect. My conclusion is that the upper classes’ opposition to income redistribution in Latin America is the most important obstacle to the reduction of its level of inequality, and this phenomenon helps us to understand why the continent remains the most inegalitarian region of the world.