Perceived inequality and support for trade liberalization in Latin America

• Date: 20 June 2016
• Pages: 102-114
• Published date: 20 June 2016
• DOI: https://doi.org/10.1108/JITLP-06-2016-0014
• Author: Christina Fattore,Brian Fitzpatrick
• Subject Matter: Strategy,International business,International business law,Economics,International economics,International trade

Perceived inequality and support

for trade liberalization in

Latin America

Christina Fattore and Brian Fitzpatrick

Department of Political Science, West Virginia University, Morgantown,

West Virginia, USA

Abstract

Purpose – Previous studies have focused on individual preferences regarding trade liberalization

without considering an individual’s perceptions of income inequality. This study aims to utilize the 2007

Latinobarametro to test a hypothesis regarding the relationship between an individual’s perceived

income inequality and their support for trade liberalization in their country. The authors focus primarily

on Latin America, as it is a region that has a long, entrenched tradition of income inequality with far

reaching political and economic consequences. It is also a region that is relatively new to trade

liberalization, as it only began to open up in the 1980s, after a decade-long commitment to import

substitution industrialization.

Design/methodology/approach – The authors utilize a logit model to analyze the 2007

Latinobarametro data to test the hypothesis.

Findings – The authors nd that individuals who perceive income inequality to be fair in their country

are more likely to support trade liberalization, whereas those who perceive income inequality to be

unfair are less likely to support liberalization.

Originality/value – This study allows for a more complete portrait of what inuences individual

preferences toward trade policy and advocates for policy elites to be more responsive to their citizens’

concerns about trade liberalization.

Keywords Latin America, Trade liberalization, Income inequality, Public opinion

Paper type Research paper

Latin America is notorious for its extensive income inequality. This is not a recent trend,

but instead, it has permeated through modern history. Inequality seems to touch every

aspect of a citizen’s life: from their educational opportunities to access to clear water,

food and health care to job possibilities and even political involvement (de Ferranti et al.,

2004). In the immediate post-Second World War period, Latin American states

attempted to shrink income inequality through a number of policies, but, in particular,

import substitution industrialization. Policymakers believed that minimizing

dependence on external markets for trade (specically, the USA) would help these

countries grow, shrinking the gap between the rich and the poor. Instead, import

substitution failed miserably, to the point that those who were already impoverished

were hurt even worse.

This paper was previously presented at the 2016 annual meeting of the International Studies

Association, Atlanta, GA. The authors would like to thank Tony Heron and Joel Quirk for their

helpful comments on a previous draft.

The current issue and full text archive of this journal is available on Emerald Insight at:

www.emeraldinsight.com/1477-0024.htm

JITLP

15,2/3

102

Journalof International Trade Law

andPolicy

Vol.15 No. 2/3, 2016

pp.102-114

©Emerald Group Publishing Limited

1477-0024

DOI 10.1108/JITLP-06-2016-0014