Date of Defense

Spring 4-22-2011

Department

Political Science

First Advisor

Gunther M. Hega, Political Science

Second Advisor

Susan Pozo, Economics

Third Advisor

Priscilla Lambert, Political Science

Keywords

developing nations, developed nations, taxes

Abstract

This thesis examines the factors affecting income distribution in Latin America, specifically, the cases of Chile, the Dominican Republic, and Venezuela. The focus of this study is to identify economic, as well as, political factors that may be causing the inequality levels of income distribution to increase or decrease within the countries previously stated. Economic factors investigated include freedom to trade, trade as a percentage of GDP, economic growth, and educational enrollment levels. Furthermore, the political factors analyzed in this thesis are: corruption levels, legal structures, security of property rights, rule of law, democratic or non-democratic status, expenditure in social welfare programs and taxation structure. Two key results are found in this study. First, some independent variables used in this thesis are found not to significantly sway the distribution of income in these three countries by themselves ; however, ignoring one variable for another is a mistake for they, together, may influence the distribution after all. On the other hand, taxation systems do seem to take an effect on income distribution. Although the impression is that taxation has negative effects on income distribution (it, many times, augments inequality), an effect is clearly present. Second, not only the existence, but the power exercised by leftist parties in Venezuela seems to have a greater impact on income distribution than did the other factors. Furthermore, although I understand the limited characteristic of the data, the next step would be to include multivariate regressions and the effects of unions and union strength in an effort to improve this analysis.

Access Setting

Honors Thesis-Open Access

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