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The article discusses poverty and inequality in Latin America as of 2014. Latin America is the world's second most unequal region on the plant according to the Centro de Estudios Distributivos, Laborales y Sociales and World Bank. Inequality is considered as one of the main challenges to combat poverty, affirm democracy and sustain sovereign economic growth in the region. Also examined is the evolution of poverty and inequality in the region since the 1980s.

The period between 1980 and 2005 registered declining poverty, especially in its extreme form, and increasing economic inequality with implications for the economic footing of the global poor- and low-income groups. Disentangling the roles of economic growth, openness and political institutions in determining poverty and inequality using cross-national data faces enormous methodological challenges. Nevertheless, panel data regressions estimated here suggest that the poor- and low-income groups do not benefit much from economic openness and political democracy. While economic growth and government expenditures do not significantly affect poverty, they prove somewhat effective at containing inequality. Copyright © 2010 John Wiley & Sons, Ltd. [ABSTRACT FROM AUTHOR]