Easy and Hard Redistribution: The Political Economy of Welfare States in Latin America

Comparative research on Latin American welfare states recently has focused on the extension of non-contributory benefits to those outside the formal labor market. This extension of benefits constitutes a major break from past exclusionary welfare regimes. Yet there also are substantial areas of continuity, especially in the contributory social-insurance system that absorbs most of welfare budgets. We develop here a framework for studying changes in Latin American welfare states that reconciles these trends. We argue that Latin American governments enjoyed an easy stage of welfare expansions in the 2000s, characterized by distinct political coalitions. Bottom-targeted benefits could be layered on top of existing programs and provided to wide segments of the population. But many Latin American governments are nearing the exhaustion of this social-policy model. We explore policy and coalitional challenges that hinder moves to hard redistribution with case studies of unemployment insurance in Chile and housing in Colombia.