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The striking turn away from authoritarian regimes in Latin America in recent years opens up new hope for social action to reduce poverty, and raises the importance of finding methods that do not either set back the economy or aggravate social conflict. The core economic problem is that market forces in many of these countries work against equality, and must be reoriented in some ways if poverty is to be reduced significantly, but that running against them is like running into a minefield. Democracy is unlikely to survive unless ways can be found to combine reduction of poverty with a functioning economy, so that both the poor and the non—poor have reason to believe that a democractic system is in their interest. This paper reviews evidence of degrees of success in reducing poverty, examines some problems of interpreting what success means, tries to clarify the mixture of positive and negative relationships between market forces and the persistence of poverty, and places most of its emphasis on the need to shape economic policies in ways favorable for creation of a higher degree of social consensus.


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