Source: authors’ elaboration on the basis of the ECLAC’s BADECON database. Notes: Tax revenue
does not include non-tax revenue (such as royalties) which accrues to governments. *Argentina,
Bolivia, Brazil, Chile, Ecuador, Mexico, Peru, and Venezuela; **r=0.56 without Argentina and
Brazil.
Thus, in the absence of a CGE model, the general equilibrium
effects of the commodity boom on income inequality are
difficult to map out. Improvements i n the balance of payments
do relax the foreign-exchange constraint t o g r o w t h and m a y
stimulate production in labor- i n t e n si v e i n d ust r i e s with the
effect of reducing income inequality. The effect via tax and non-tax
revenue seems limited. An equalizing effect could occur via a
reduction in interest rates (due to the expansion in money creation
from abroad induced by growing export receipts), which favors
firms and households, and penalizes banks and rentiers. Yet,
commodity booms also can produce ‘Dutch Disease’ effects
which slow growth in the non-commodity traded sector, with
the possible effect of increasing income inequality, as many low -
income people work in the traded sector of the economy. All in
all, while it is plausible that the recent commodity bonanza had a
favorable effect on growth, the impact on inequality is
undetermined as it depends to a large extent on the use of the
additional resources.
02468101214160 50 100 150 200 250D. International Terms of Trade (x-axis) vs. Non Tax
Revenue/GDP(y-axis)
of the 8 m ain commodity L.A. exporters, 1990- 07r=0.39** (0.63 for 2003-07)