Spatial inequality in capabilities in Latin America

Poverty - Inequality - Aid Effectiveness

Reducing inequality within and between countries is one of the UN’s 17 Sustainable Development Goals. Spatial inequality, that is, disparities among places in economic activities, incomes, and social indicators, is an important component of overall inequality and has very tangible effects on people’s lives. Increasing evidence suggests that the place where a person lives significantly affects his or her opportunities, outcomes, and capability to live the life he or she values, over and above individual characteristics and circumstances (Bebbington et al. 2017). Yet, spatial or territorial inequality is one of the least explored dimensions of development and has received only marginal attention even in the 2030 Agenda.

Latin America is the most unequal region of the world. The distribution of opportunities and outcomes is highly unequal both across individuals and among territories within countries. The series of the Latin American Poverty and Inequality Report (2011, 2013, 2015 and 2017) uses data from censuses and nationally representative household surveys at the lowest available level of spatial disaggregation (e.g. municipality or county), to document and analyze the magnitude of spatial inequality at a given point in time in several dimensions of development.

We used this data to explore the evolution of territorial gaps in capabilities over ten years in ten Latin American countries - Bolivia, Brazil, Chile, Colombia, Ecuador, El Salvador, Guatemala, Mexico, Nicaragua, and Peru. The concept of capability reflects a person’s effective freedom to choose between different ways of living and to achieve the kind of life he or she has reason to value (Sen, 1999). Capabilities refer to the set of valuable functionings, that is, the range of “beings and doings” that a person has effective access to, such as being in good health or receiving quality education.

We look at changes in spatial inequality between two points in time, around 2005 and 2015, in education, health, employment, housing, safety, and income, that is, “basic” dimensions that we consider to be constitutive of human need. Capabilities are often non-observable and difficult to measure. The data that are available at the level of spatial disaggregation we need allow us to analyze functionings in these dimensions and then use this information to make inferences about capabilities.

The comparison of national averages over time shows important improvements in most indicators for the ten countries. However, national averages hide significant differences among regions. We measure the magnitude of spatial inequality in each of the dimensions of capabilities using an index of territorial inequality (ITI). For each dimension, the ITI is calculated as the average gap between each territory and the national average, weighted by the share of the population in the territory. The ITI takes theoretical values between 0 (perfect equality in the spatial distribution of capabilities) and 1 (perfect inequality). The full range of theoretical values is rarely observed in practice, however, and any value above 0.1 can be considered as an indication of high spatial inequality.

Three key findings emerge from the cross-country analysis of the evolution of spatial gaps over time. First, the broad trend across countries and dimensions seems to be a reduction in spatial inequality over time, but the magnitude of the reduction is small, especially considering that we are looking at

a ten-years period, and, in some cases, we observe no change at all. Second, the reduction in spatial inequality is heterogeneous across countries and dimensions. Bolivia and Brazil are the only countries showing consistent reduction in spatial inequality across dimensions, but, overall, the trend of reduction of spatial inequalities is more marked in housing, safety and income, than in education, health and employment. Third, in some cases the national average improves over time, but spatial inequality increases. Guatemala, Mexico, Colombia, and Nicaragua show an increase in spatial inequality in at least one dimension: health and employment in Guatemala, health and education in Mexico, education in Colombia and employment in Nicaragua.

Overall, these findings indicate that spatial gaps are significant and tend to be persistent over time, suggesting that people’s capabilities are significantly influenced by the place where they live. This wide and, sometimes, widening gap is not inevitable: policies matter. Social policies, for example, continue to focus mainly on improving individual assets, as if they were independent of the structural conditions that frame people’s capabilities. If public policy does not address the structure of opportunities and constraints that people face, people-based social policies can fail to provide sustainable positive results.


Bebbington, T., Escobal, J., Soloaga, I., Tomaselli, A. (2017). Poverty, inequality and low social mobility: Territorial traps in Chile, Mexico and Peru. Centro de Estudios Espinosa Yglesias, Rimisp, Universidad Iberoamericana.

Rimisp (2012) Informe Latinoamericano sobre Pobreza y Desigualdad 2011. RIMISP - Centro Latinoamericano para el Desarrollo Rural, Santiago, Chile.

Rimisp (2014) Informe Latinoamericano sobre Pobreza y Desigualdad 2013 – Empleo de Calidad. RIMISP - Centro Latinoamericano para el Desarrollo Rural, Santiago, Chile.

Rimisp (2016) Informe Latinoamericano sobre Pobreza y Desigualdad 2015 - Género y Territorio. RIMISP - Centro Latinoamericano para el Desarrollo Rural, Santiago, Chile.

Rimisp (2018) Informe Latinoamericano sobre Pobreza y Desigualdad 2015 – Articulación para el Desarrollo de los Territorios. RIMISP - Centro Latinoamericano para el Desarrollo Rural, Santiago, Chile.

Sen (1999) Development as Freedom. Oxford, OUP.

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