Crafting Sustainable Social Contracts in Latin America: Political Economy, Public Attitudes, and Social Policy


This paper focuses on the need to develop social contracts as a means to address the challenge posed by widespread insecurity and extensive inequality. Even the winners in the best performing countries in the region are vulnerable to negative shocks, such as those related to volatility in international capital markets. In the advanced economies, permanent safety nets and social insurance systems are part of a fiscally and politically sustainable social contract. Ultimately, developing social contracts and sustainable welfare systems—no matter how limited—will be integral to the region’s economies becoming competitive and stable participants in the global economy. The paper highlights the importance of public attitudes—about the causes of poverty, about the distribution of opportunities, and about redistribution, among others—in crafting such contracts. It provides an analysis of Latin American public attitudes compared to those in the United States.