How Better Policy Choices Could Help Governments Prevent Inequality-Driven Protests

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By Michael Higgins, Program Director for the Grand Challenge on Inequality and Exclusion.

In Chile, it was an increase in the price of a metro ticket. In Lebanon, it was a proposed tax on WhatsApp calls. In Ecuador, the match that lit the fire was the cancellation of a long-standing fuel subsidy at the demand of the International Monetary Fund (IMF). Throughout the month of October, protesters filled the streets of one capital city after another, from Quito to Santiago to Beirut to Baghdad. While the sparks that touched off the unrest varied from place to place, the underlying motivation — a sense of outrage at suffocating and structural forms of inequality and exclusion — was the same. Long-simmering frustrations over austerity, corruption, and reduced or failing public services erupted, and show no signs of dying down soon.

Protesters in Santiago, Chile in October 2019. (Marcelo Gonzalez/CC BY-SA 2.0)

Nor is this dynamic limited to developing and middle-income countries. France saw a similar trajectory when President Macron’s 2018 reforms spurred months of gilets jaunes protests, and austerity likely played a role in the UK’s Brexit referendum in 2016. More than a decade after the great recession of 2008, and long since the Washington Consensus should have receded from view, it ought to be clear that we cannot build sustainable, flourishing societies on a foundation of austerity and inequality. Crumbs from the high table will not satisfy the demands of the protesters — nor should they, because key aspects of neoliberal policies like boilerplate fiscal austerity and capital account liberalization don’t work. The IMF’s own research has cast doubt on the efficiency and benefits of this approach to fiscal policy, while showing that these reforms can increase inequality and lead to political backlash. In fact, a growing number of countries that have heeded the lessons of recent decades are already taking innovative steps to address inequality. But too many governments are still failing to see that an alternative path is possible.

Read the full blog post: https://cic.nyu.edu/blog/how-better-policy-choices-could-help-governments-prevent-inequality-driven-protests

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