in the early 90s, Chile from 4.1% to a substantial 7.5%, and Panama from a 0.3% to a superb 7.0%. However, why have poverty levels in these countries persisted when economic growth took place for the late 80s early 90s period? The main cause lies within a political structure where a minor group of privileged leaders govern a country with a deeply rooted system of corruption and of immense abuses of power. In fact, most of the movements intervening to overthrow an existing corrupted government, specifically the case of Central America, brought with them similar ideals to that of the previous rulers. Ideals that set out to benefit the leaders in power and the rich aristocrats the elite that had supported the new authoritarian government. As a result, the solution presented by new leaders to a recurring political problem consisted in a similar camouflaged form of corruption that had as main objective the welfare of a few privileged citizens.According to the modernization theory, one of the positive outcomes of industrialization, and economic growth is an increase in the number of educated people in the population. Therefore, as the number of literate citizens within the population increases, governments begin to experience a great deal of pressure from a more participant educated working class, demanding that governments follow more democratic economic policies fair to all social groups. However, the modernization theory did not prove to be 100% true in Latin America. Despite a better educated population share in most Latin countries, even in 1994 we find that largely this outdated system of abuses is still alive and functioning with some of the old criterias. This conclusion derives from the fact that on average in 1994 most Latin American countries gini-ratio oscillated between the incredibly high figures of 50 and 55. Supported by both a continuing paternalism, and the governments fidelity to the welfare of the elite, the ec...
