The presentation of the report in Paris was held two days before the annual meeting of the IDB's Board of Governors. The seminar gave Latin American officials and European economists a chance to examine the effect of social policies on inequality and discuss possible mechanisms to cushion the blow of financial shocks on the poor. Jean Bonvin, president of the OECD's Development Center in Paris, pointed out that Latin America's macroeconomic achievements have not been matched by similar progress against inequality over the past decade. This shortcoming took its toll on the region's growth potential, capital accumulation and social development. Bonvin stressed that there would be no quick fix for this problem, which demands a complex combination of economic, social, political and institutional policies.
Inequality also has disturbing implications for the region's hard-won democracies.
The IDB report found that support for democratic rule was lowest in the countries with the widest income gaps. The chief one hinges on incomes, and can mostly be pinned on the education chasm that separates the richest Latin Americans from the less fortunate in the region. While schooling has been growing steadily in Latin America for decades, relatively few of its inhabitants have university educations, while a vast majority drops out before finishing high school. This trend is made worse by the fact that the quality of public education is dismal in most Latin American countries, widening the differences between the students whose parents can pay for private schools and the children in the state-run system. Family size can also affect income distribution.