Blackwell Publishing Ltd.Oxford, UK and Malden, USAIJURInternational Journal of Urban and Regional Research0309-13172005 Blackwell Publishing Ltd.

March 2005291110
23Symposium: Globalization and Cities in Comparative Perspective Globalization and Latin American citiesBryan R. Roberts

Volume 29.1 March 2005 110–23 International Journal of Urban and Regional Research

Globalization and Latin American Cities

BRYAN R. ROBERTS

Introduction
Cities have long been enmeshed in global economic and cultural networks, so the
challenge is to differentiate what is distinctive in the current processes of globalization
from long-standing trends. The major cities of Latin America have played an important
role in global economic and political organization since the conquest of the Americas
by Spain and Portugal. In Spanish America, cities such as Mexico City and Lima were
important nodes in the organization both of transatlantic and transpacific trade. They
were also essential elements in ordering the internal economies of the Spanish colonies
so that these could contribute to the global economy (Morse, 1971). Other cities, such
as Guanajuato in Mexico or Potosi in the viceroyalty of Peru performed specialized and
subordinate roles within the urban hierarchy of the colonies as sites of mining and
manufacturing. In Brazil, the cities were equally important in organizing the
participation of the colony in the global economy of the day. Indeed, the unity of Brazil
was, to a certain extent, maintained in the face of centrifugal forces by the trade and
communication between its major coastal cities. With independence, the new countries
of Latin America were configured around the major cities and around the economic and
political projects of the elites that dominated those cities. Within countries, distinctive
regions emerged around important urban centers, which organized politically and
economically the agricultural and extractive economies — Cali and Medellin in
Colombia, Guadalajara and Monterrey in Mexico, Trujillo, Arequipa and Huancayo in
Peru (Walton, 1977; Long and Roberts, 1984).
Overlaying the centrifugal processes in each country was the increasing primacy of
the urban system in most of Latin America (Browning, 1958; Gilbert, 1992; Roberts,
1995: 38–41). Primacy is itself a feature of integration into the global economy. By the
end of the nineteenth century and the beginning of the twentieth century, the economies
of most Latin American countries were developing as a result of their ‘natural’ advantage
in providing primary products to Europe and the United States. These export-oriented
economies were organized by the foreign and national commercial and political elites
resident in the major cities. Only in these was there a domestic market sufficient to
sustain substantial service industries, craft and manufacturing industries. The growth of
secondary centers was consequently slower than that of the major cities, with some
exceptions such as Colombia and the ‘twin’ growth of São Paulo and Rio de Janeiro in
Brazil.
For most of the twentieth century, even in the period of import-substituting
industrialization (1940s–1980s), primacy continued to be a marked feature of the Latin
American urban systems. The major cities contained by far the largest markets for
consumption and poor communications made ease of access to markets important to
profitability. Consequently, the tariff-protected manufacturing industries located in the
major cities. The organization of the global economy and polity has, then, been decisive
for the shape of the Latin American urban systems, and these systems, in turn, account
for much of the character and variation in Latin America’s social, political and economic
organization. Indeed, dependency theories, which were perhaps the earliest systematic
attempts to analyze the negative aspects of globalization, stressed that dependency was

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Globalization and Latin American cities 111

not simply an external relation, but one that was also based on internal economic and
social structures. Though this was not analyzed by dependency theories, it is clear that
the variations in the urban systems of the countries of Latin America help account for
the differences within and between Latin American countries in the nature of their
dependency and their prospects for development.
In face of this long experience of globalization, what does the current focus on
globalization processes and on ‘global’ cities offer that is new for the understanding of
Latin American urban development? The global cities approach emphasizes the
functional interdependence and specialization of urban economies that results from
increasingly unrestricted capital flows, near instantaneous means of communication, and
the organizing capacity of the cluster of business activities concentrated in the large
cities (see Friedmann and Wolff, 1982; Sassen, 1994; Hall, 1998; Lo and Yeung, 1998:
9–11). National boundaries and nation states become less significant for the pattern of
economic development, it is claimed, than the global flows of people and capital between
world cities (Sassen, 1998; 2000). This perspective has, however, limited applicability
to Latin American cities.1 David Smith (2001) points out that the analysis of the global
city system has basically left out the cities of the poor in the ‘South’ which ‘tend to be
both under-emphasized and under-theorized’. Alan Gilbert (1998: 181) argues that even
major Latin American cities, such as Buenos Aires, Mexico City, Rio de Janeiro and
São Paulo, do not fulfill truly ‘global’ or ‘world’ city roles, despite their importance
within the region for the control and coordination of global financial and other business
services. In the 1990s, economic recessions, debt problems and fiscal austerity severely
restricted the economic growth of Latin America’s major metropolises. These same
difficulties increase the control that foreign capital exercises both over local enterprises
and over urban infrastructure. That, of course, is an important aspect of contemporary
globalization, but it is not exactly a new one.
Despite persisting national differences in urbanization processes in Latin America
and the weak development of a globally organized system of cities, globalization does
have important consequences for urban social and economic organization in the region.
Some of these changes are those predicted by world/global city models — the increasing
functional interdependence and specialization of Latin American cities as seen in the
growth of producer services in the large cities and of cities specializing in export
manufacturing in Mexico and the Caribbean. More pervasive, however, are the
consequences for urban social organization of the reduction in the costs of
communication, of the opening up of economies to free trade, of the free movement of
capital and of the reduction of state intervention in the economy. These forces are likely
to have important consequences for contemporary urban organization even when they
do not increase functional specialization and interdependence. As Townroe (1996: 21)
states, their combined impact places ‘cities rich and poor into an environment of greater
social and economic turbulence than hitherto’.
I argue that the low and middle-income populations of the cities in Latin America
have been affected in new ways by contemporary economic and cultural globalization,
that the impact has varied depending on a city and a country’s particular path of
development, and that globalization has had significant, direct and indirect, consequences
for urban social and public policy. My analysis will take account both of the ways global
forces structure urban economies and spatial organization, globalization ‘from above’,
and of what Appadurai (2000) calls globalization ‘from below’. Globalization from
below examines the possible implications of globalization for citizen rights and
1 This is less the case of the international migration movements that are characteristic of current
globalization. These have increased between the Latin American countries and between them and
the United States and Europe. Even here, however, the lack of economic dynamism of even the richer
Latin American economies means that they are not powerful magnets attracting migrants from
poorer Latin American countries. For instance, the percentage of those born in the neighboring and
poorer countries has remained the same as it was at the early 1900s — approximately 2% — in the
metropolitan area of Buenos Aires.

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112 Bryan R. Roberts

consciousness as a result of the activities of international organizations, of national and

international NGOs and of increased access to information by community groups.

Latin America in the global economy of the 1990s

The decade of the 1990s was one of relatively slow growth of per capita income in Latin
America, averaging 1.1% annually between 1990 and 1999. This growth rate conceals
a substantial volatility, with negative rates of growth after the Tequila shock of 1994.
There was a subsequent recuperation, which was followed by recession again by the
end of the decade as a result of the Brazilian and Argentine devaluations and of slowing
US growth. Both in the 1980s and 1990s, the economies of the region were affected
similarly by external economic crises, indicating that globalization generally brings
increasing external vulnerability and economic volatility.
For most Latin American countries, the 1990s also increased dependence on global
economic forces through (a) the rise in foreign direct investment and portfolio
investment and (b) the increasing share of imports and exports in the GNP. Latin
America contrasts with some other developing regions in that its long involvement in
global trade and its relatively early development of an internal market has made it a
relatively attractive location for private investment. Latin America attracted substantial
amounts of foreign direct investment (FDI) with FDI increasing as a proportion of net
resource flows from 1980, constituting 20.4% of flows until 1998 when it made up some
70% of net resource flows (World Bank, 1999, Vol. 1: 194). It went mainly to Argentina,
Brazil, Chile, Colombia and Mexico, attracted by the privatization of state-owned
companies in energy, utilities and communications, but also investing in financial
services, in export-related manufacturing sectors, in tourism and in the domestic market
(restaurant chains, supermarkets and shopping malls). Also important has been the
increase in short-term portfolio investment in the 1980s and 1990s, which increased
the potential volatility of Latin American markets. The Mexican crisis of 1994/5 and
the Argentinean one in 2001 showed the consequences of this volatility, when the rapid
outward flow of capital was a major factor forcing devaluation.
External trade dependence also increased during the 1990s, but with important
differences between countries (see Table 1).
Note that though external trade increased throughout the region, countries varied in
whether it increased most through imports or through exports. Only Chile, Cost Rica
and Mexico of the five countries in the table showed an equal increase in both imports
and exports, and both countries have high export and import coefficients. In contrast,

Table 1 Export and import coefficients for selected countries of Latin America (average
values with respect to GNP in 1995 dollars)

1989–90 1999
Exports Imports Exports Imports
Argentina 8.2 4.0 10.9 13.1
Brazil 7.1 3.7 8.0 9.4
Chile 25.4 20.9 34.8 26.7
Costa Rica 25.4 26.4 65.4 60.1
Mexico 15.1 16.9 35.5 36.3
Peru 10.5 8.8 13.4 14.0
Uruguay 15.9 12.8 19.2 22.2
Latin America 12.1 9.9 19.8 20.1
Source: ECLAC (2001: 6).

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Globalization and Latin American cities 113

Table 2 Economically active population by sector of employmenta (percentages in selected

sectors)

Metropolitan Areab Economic Sector

Manufacturing Commerce Producer Services
1990c 2000d 1990c 2000d 1990c 2000d
Buenos Aires 23.8 16.6 16.9 17.8 7.8 11.3
Lima 17.7 15.8 31.2 28.6 5.5 6.7
Mexico City 23.5 20.4 20.7 22.1 6.6 8.3
Montevideo 24.0 15.4 15.7 17.0 6.9 11.2
Santiago 23.2 17.8 16.3 18.6 5.3 9.1
São Paulo 27.0 16.6 14.6 16.6 10.2 11.1
Seoul 32.9 23.3 18.7 17.1 7.9 14.4
a
The percentages are based on the employed population only.
b
This includes the central city and its surrounding urban areas. In the case of Seoul, for instance, it includes both
Seoul and Kyunggi.
c
The beginning year is 1991 for Lima and Montevideo.
d
The end year is 2001 for São Paulo.

Source: Household Surveys of Buenos Aires (EPH), Lima (ENNIV), Mexico City (ENEU), Montevideo (ECH),
Santiago (CASEN), São Paulo (PNAD) and Seoul.

Argentina and Brazil increased their external trade mainly through imports, and in both
countries, external trade dependence is very low.
What do these trends mean for the economic and employment structures of major
Latin American cities? Does globalization mean an increasing specialization of these
cities in producer services for international, national and regional markets as the world
city literature suggests? Table 2 shows the trends in the sectoral composition of the
labor force for six major Latin American cities, focusing on manufacturing, commerce
and producer services.2 I have included Seoul for comparative purposes because of its
close links with the international economy as indicated by the large number of Fortune
500 companies that are headquartered there (Kwon, 2001).3 The data in Table 2 indicate
that the increases in foreign investment and external trade in the 1990s have been
associated with the increase in producer services as a proportion of employment. Note,
also, the consistent decline in all seven cities in the proportions employed in
manufacturing. Whereas in all the cities in 1990, with the exception of Lima,
manufacturing employment was a larger proportion of the labor force than commerce,
by 2000, only in Seoul was manufacturing a more important source of employment than
was commerce.
These trends conceal, I suggest, different underlying economic dynamics. The fastest
rates of increase in the producer services occur in the two cities — Santiago and Seoul
— whose countries did experience a relatively consistent export-oriented growth in the
1990s. Also, both Chilean and South Korean capital invested substantially in their
respective regions of Latin America and Asia in this period. Mexico also had an export-
oriented growth in the 1990s, but this was heavily based on the maquiladora (in-bond)
industry, which, given Mexico’s proximity to US producer service providers, was
unlikely to stimulate the growth of complementary producer services within Mexico.
The growth in producer services (finance, real estate, professional and financial services)
in the other cities is due, I suggest, to the role of these services in promoting and
2 I am grateful to Robin Luo who provided the data for the sectoral composition of the Latin American
cities.
3 Mikyung Kim provided the sectoral data for Seoul and the data on Korea’s multinational companies.

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114 Bryan R. Roberts

organizing domestic consumption in the modern economy, and not to any new function
that these cities are playing in the organization of the global economy. Buenos Aires
has always been one of the cities with the highest per capita income in Latin America
and the ‘overvalued’ peso of the 1990s fueled a major boom in consumption in which
imports played a large part. The finance sector in Argentina helped develop that boom
through consumer credit, but was less active in providing loans to small and medium-
size business or in investing in productive operations outside of Argentina. The relatively
high cost of labor in Argentina also meant that there was little investment in export
manufacturing. By 2002, both the Argentinean and Uruguayan financial sectors were in
deep crisis. São Paulo had the largest amount of employment in producer services in
1990, as befits the city that is most often listed as Latin America’s candidate for a
regional world city. The increase in producer service employment was, however, modest
by 2000, and far surpassed by Seoul.
The growth in producer services in the Latin American cities is likely, however, to
have similar consequences for class and income inequality. It reinforces a situation in
which there is a polarization between the relatively few jobs that pay substantial incomes
and the large majority of jobs that pay, at best, a subsistence wage. Producer service
occupations demand very high levels of qualification, which places an effective barrier
on social mobility for those without the cultural and material resources to gain the
highest and, increasingly, privatized levels of education.
It is on these consequences for inequality and vulnerability to poverty that I
concentrate in the remainder of this article. These more indirect effects of economic
globalization are likely to be a powerful homogenizing force for Latin American cities.
To understand the novelty of these effects, we need to consider briefly the effects of the
apparently similar homogenizing forces affecting cities during the import-substituting
industrialization (ISI) period of Latin American urban growth — those of economic
centralization and concentration that accompanied urbanization and industrialization. In
the ISI period from the 1940s to the 1980s, urban labor markets begin with high levels
of self-employment and ‘informal’ employment in micro enterprises or unpaid family
employment, but the share of these types of employment declined over time as a large-
scale domestic manufacturing industry and related services increased its share of urban
employment (Oliveira and Roberts, 1994). In this period, even the ‘informal’ sector was
dynamically related to the large-scale sector, through subcontracting or through selling
low-cost goods to the workers of the large-scale sector, goods that were not profitable
for the large-scale sector to produce. Another characteristic of labor markets during the
ISI period is the dynamism of public sector employment. In the ISI period, state-led
development meant the expansion of public employment. By the 1980s, this employment
accounted for as much as half of white-collar employment in the cities of Latin America
(ibid.). Because Latin American countries and cities were at different stages of
development during the ISI period, there were marked contrasts in their labor markets,
between, for instance, the highly formal labor markets of Buenos Aires and the high
degree of informality of the Mexico City labor market.
Through free trade in goods and capital, contemporary globalization simultaneously
brings greater competition for domestic firms and provides the financial and
technological means whereby some firms, often foreign owned, meet that competition
through restructuring. The effect is to increase the share of high-tech manufacturing
and producer services in the Gross Domestic Product, but without a commensurate
increase in employment in the dynamic sectors (Altimir and Beccaria, 1999). Small
and medium-size firms, particularly in commerce and manufacturing, find it difficult to
compete and employment in them either declines absolutely or in terms of relative
wages.
In both cases, globalization is likely to mean that self-employment or employment
under informal working conditions is likely to increase. Fiscal austerity policies
resulting from debt renegotiation have reduced the growth of public sector employment,
either absolutely or relatively, in Latin American cities. In many cases, the equivalent

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Globalization and Latin American cities 115

employment is taken up in the private and non-profit sector, often under less protected
conditions of work. Labor market deregulation, often implemented as part of
restructuring ‘packages’ organized by the IMF, adds to informal working conditions by
permitting employers to prolong the periods during which they can keep workers without
formal contract or social security benefits.

Inequality and vulnerability to poverty

I mainly use data from four cities to explore the implications of globalization for
inequality and vulnerability to poverty — Buenos Aires, Mexico City, Montevideo,
Santiago.4 The four cities are similar in that they are the capitals of their respective
countries and also head urban systems of high primacy. All four cities concentrate
approximately 40% of their countries’ national product. They differ both in the
complexity of their urban systems and in the timing of urbanization. Montevideo and
Santiago are capitals of small countries with few economically important cities outside
of the metropolitan regions. Buenos Aires and Mexico City dominate large countries,
which have important provincial regions and provincial cities. Buenos Aires and
Montevideo are examples of early urbanization in Latin America, attaining high rates
of urban and industrial growth in the first half of the twentieth century. This urbanization
was accompanied by earlier reductions in fertility and population growth than elsewhere
in Latin America. These countries and their urban populations also had the first and
most extensive social security coverage in Latin America. Chile and Santiago urbanized
almost as rapidly, in the 1950s and 1960s, and also had an early and extensive
development of social security protection. Mexico City was the last of the four cities to
grow rapidly and to industrialize, its highest rates of growth being in the 1960s and
1970s. It was slower than the other countries in extending social security protection to
the population.
The four cities and their respective countries have acquired somewhat different roles
in the global economy. Argentina and Uruguay have maintained their traditional roles
as exporters of primary products, and to a lesser extent, of sophisticated manufactured
goods. Both Buenos Aires and Montevideo provide financial and professional services
for the region, but their importance in this respect is challenged by the increasing
dominance of São Paulo in the regional economy. With a smaller internal market,
Uruguay is much more dependent than Argentina on external trade. Chile has, in recent
years, acquired a special niche in the global economy. Non-traditional agricultural
products, such as fruit and wine, now complement its traditional exports of copper and
other mining products. The financial services sector located in Santiago is also acquiring
a regional presence that it did not have before. Mexico has similarly acquired a special
niche in the global economy. The in-bond manufacturing sector — the maquiladora
sector — located mainly on the northern border of Mexico is, along with petroleum,
tourism and migrant remittances, the major source of the country’s export earnings.
Mexico City’s role within Mexico’s urban system is increasingly that of a producer
services and commercial center.

4 These data come from a project on Assets and Vulnerability in the Southern Cone of Latin
America directed by Ruben Kaztman and Guillermo Wormald, with the collaboration of Carlos
Filgueira and Luz Cereceda, and funded by the Ford Foundation (Kaztman and Wormald, 2002).
Three doctoral candidates at the University of Texas at Austin and myself were associated with
this project, with responsibility for the analysis of the data for Mexico City and Buenos Aires. The
data are obtained from labor market surveys in the four countries and from community-based
interviews in three of the cities (Buenos Aires, Montevideo and Santiago). The interpretation given
in this article and any errors in comparability are my sole responsibility. They are taken from
chapters written by Carlos Filgueira, Guillermo Wormald and Luz Cerceda, Georgina Rojas, Cristina
Bayon and Gonzalo Saravi.

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116 Bryan R. Roberts

Economic insecurity
By various measures of economic insecurity, the situation of the economically active
population worsens in the four cities included in the project.5 In Buenos Aires, the
proportion of heads of households who are unemployed increases from 6% to 14.7%
between 1990 and 2000 and those without social security coverage increases from 25.3%
in 1990 to 35.2% in 2000 (Bayón and Saraví, 2002: 84–8). In Mexico City, the
proportion of the economically active population that had no coverage during the whole
year increased from 22.9% in 1990–91 to 34.2% in 1999–2000 (Rojas, 2002: Cuadro
8, 10). Unemployment, in contrast remained relatively constant, declining from 6% to
3.9% between 1990 and 2000 or from 6.6% to 5.6% if those that work less than 15
hours a week are added to the open unemployment figure (ibid.: 276). In Montevideo,
underemployment and insecure (lack of social security coverage and lack of written
contract) working conditions increases from 20.5% of the economically active
population in 1991 to 21.5% of the population in 1998); open unemployment increases
from 8.9% to 11.7% (Filgueira, 2002: Cuadros 6–7). In Chile, which had the fastest rate
of economic growth of the four countries, open unemployment increased from 7.9% in
1990 to 9.7% in 1998; the percentage of full-time employees without a contract increases
from 11.8% to 15.8%; and the proportion of the economically active population who
were working under insecure conditions (without social security protection and/or
receiving one or less minimum salaries) increases from 4.2% in 1990 to 7.9% in 1998
(Wormald et al., 2002: Cuadros 19–24, 30).
Note the differences between the four cities in the ways that labor markets worsened
during the 1990s. In the two labor markets that historically had the most formal labor
markets and strongest system of labor protection — Buenos Aires and Montevideo —
the proportions of open unemployment increase faster than precarious employment. In
Mexico City, in contrast, unemployment decreases, but precarious employment
increases substantially. Unemployment in Buenos Aires is concentrated among women
and the young. In both cases, these are usually dependent members of a household.
Since rates of female participation in the labor market have been higher in Buenos Aires
than in Mexico City, higher unemployment in Buenos Aires is partly explained by the
greater demand for work on the part of women. However, women in Mexico City are
also increasingly entering the labor market and are finding work, even if at low levels
of pay and under informal working conditions. So what is it that enables people under
the conditions of Mexico City to find work, but not in Buenos Aires? A possible
explanation for these differences is the degree of formalization of the labor market
resulting both from labor regulations and from the nature of the urban environment.
Buenos Aires has extensive regulations covering not only employment, but also self and
family employment. It is also a city with high transport costs. In contrast, Mexico’s labor
regulations are often ignored in practice and transport is subsidized. Moreover, the
relatively more informal living environment of Mexico City means that people can get
by on less than in Buenos Aires.
In Chile, both unemployment and precarious employment increase at similar rates.
The indirect effects of globalization in the cases of Mexico City and, to a lesser extent,
Santiago, are, I suggest, to make pay and conditions of work even worse, but do not
eliminate the possibility of getting employment. The dynamism of the informal economy
is undermined by cheap imports and by high-tech sectors in manufacturing and services,
which do not put out work, as did the domestic manufacturing sector of ISI.

Poverty and inequality

The trend in terms of poverty is in a different direction, and varies more between cities
(see Table 3). In general, there appears to be a reduction in poverty throughout the
decade, with the partial exception of Mexico City. In Montevideo, the percentages of
5 The following statistics are taken from Kaztman and Wormald (2002).

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Globalization and Latin American cities 117

Table 3 Evolution of household poverty (comparable years)

% Households below the poverty line

Santiago Buenos Aires Montevideo Mexico City
1990 28.5 25.1 20.5 50.0
1992 22.1 14.3 15.0 47.5
1994 17.8 14.2 12.8 46.5
1996 12.4 19.4 15.9 59.7
1998 12.4 18.2 15.9 56.5
2000 12.7 20.4 51.4
Sources: Bayón and Saraví (2002), Filgueira (2002), Rojas (2002), Wormald et al. (2002)

homes falling beneath the poverty line decreases from 20.5% in 1990 to 16% in 1998
(Filgueira, 2002: 358). As in Buenos Aires and Mexico City, however, the greatest
reduction in poverty occurs in the first half of the decade, and poverty rises thereafter.
In Mexico City, households below the poverty line rose slightly from 50% in 1990 to
51.4% in 2000. This apparent stability hides considerable fluctuation with a reduction
in poverty to 46.5% in 1994, a rapid increase until 1997 to a high of 60.9% and a decline
thereafter (Rojas, 2002: Gráfico 2). In Buenos Aires, households below the poverty line
decrease from 25.1% to 20.4% of the total between 1990 and 2000. In Buenos Aires
the sharpest decline was to 12.7% in 1993, followed by an increase in levels of poverty
to 19.4% in 1996, and a further decline to 17.9% in 1999 (Bayón and Saraví, 2002:
Cuadro 18). Santiago is the only one of the four cities, in which the decrease in the
proportion of households beneath the poverty line is consistent throughout the decade,
declining from 28.5% in 1990 to 12.7% in 2000 (Wormald et al., 2002: Cuadro 5). The
reduction in urban poverty in the 1990s is one of the more positive aspects of the
economic growth of the period. However, the fluctuations in poverty in the decade are
also considerable, adding to the vulnerability of households.
We can probe these trends further by looking at the vulnerability of different groups
to poverty in the two cities — Mexico City and Buenos Aires — for which panel data
are available.6 Many more families are vulnerable to being in poverty at some stage
during a year than are actually in poverty at any given time. Both in Mexico City and
in Buenos Aires, household poverty increases by over 60% when it is measured by
experience of poverty at some stage during the year. In both cities, vulnerability to
poverty increases during the decade. The households most affected by poverty, as might
be expected, are those in the lowest socio-economic strata, but by the end of the decade
there is an increase in the proportions of households in the higher socio-economic strata
that experience poverty (Bayón and Saraví, 2002; Rojas, 2002).
If poverty became somewhat less of a problem in some Latin American cities, income
inequality remained a persistent problem throughout the decade in most countries and
cities. In Chile, the already high Gini coefficient of 0.57 for metropolitan Santiago in 1990
slightly increased to the 0.58 level by 1998, despite the reductions in poverty. Economic
growth in Chile and in Santiago increased the incomes of the top deciles of the income
distribution as fast as the incomes of the lowest deciles. In 1990 the bottom 40% of income
earners received 12.6% of total income, whereas the top 20% received 56.9%. By 2000,
the bottom 40% received 12.5% of income, and the top 20% remained at 56.9% (Wormald
et al.: Cuadro 9). In Mexico City, the only two occupational groups to increase their real
income between 1990 and 2000 were the managerial/professional groups and the
technical/semi-professional groups. All the other groups saw their real incomes decline
6 The household surveys in Mexico City and Buenos Aires re-interview the same families over a period
of a year.

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118 Bryan R. Roberts

(Rojas, 2002: Cuadro 13). In Buenos Aires, the Gini coefficient of income inequality
increased from 0.406 to 0.414 between 1990 and 1997. In 1980, the Gini coefficient for
Buenos Aires had been 0.387 (Bayón and Saraví, 2002: Cuadro 2). Only urban Uruguay
showed a decline in the Gini coefficient in CEPAL’s figures from 0.353 in 1990 to 0.300
in 1997, though this was contradicted by other studies (Filgueira, 2002: 333).

Spatial segregation
Globalization exercises an important indirect impact on the Latin American city in terms
of socio-spatial segregation. The spatial segregation of cities by social class or ethnicity
and by functional uses is a long observed process in the cities of the developed world,
resulting from the operation of land markets and social discrimination. In the cities of
Latin America, during the ISI period, spatial segregation was complicated by the
imperfection of land markets and by the political necessity of permitting informal
settlement as a solution to the problem of housing. Thus, the evidence for spatial
segregation was contradictory (Portes, 1989). In some cities, such as Santiago, where
dictatorship could ignore popular demand for housing close to sources of work, there
was a clear process of segregation. In others, segregation remained the same or declined,
as the poor sought out housing in unfilled spaces near the wealthy and as a middle class
under financial pressure sought cheaper housing in low-income areas.
The current situation is more homogeneous for several reasons. There are few
available spaces left for informal settlement in the large Latin American cities, other
than on the far outskirts of the city. While this is, of course, not a result of globalization,
it means that changes in urban spatial organization are now more likely to come from
above, through large capital investments, and not from below through land invasion. The
deregulation of land markets and the free movement of capital has brought substantial
investments in all Latin American cities in large-scale commercial developments, such
as shopping malls, and in luxury housing, both in the center city and in suburban
locations. The ability of the rich to segregate themselves from the poor has thus
increased, as has been noted in studies of Rio de Janeiro and other Latin American cities
(Preteceille and Ribeiro, 1999). Another feature of this process is the phenomenon of
gated communities where fences, gates and armed guards mark spatial segregation. The
growth of such communities has been rapid in recent years in Buenos Aires, in Mexico
City and in the Brazilian cities.
This spatial segregation increases inequality. As Kaztman (1999: 263–96) has shown,
when the poor live in homogeneously poor neighborhoods, they score lower on a series
of health, work and educational indicators than do the poor who live in more
heterogeneous neighborhoods. Similar results appear in the community-based analyses
that were done in Montevideo, Santiago and Buenos Aires as part of the Activos y
Vulnerabilidad project. In one of the outlying low-income neighborhoods of Buenos
Aires, for instance, distance from centers of work and the relatively homogeneous
poverty make it difficult for people to get work, to get help locally or to travel to find
work or help. The suggestion is that in homogeneously poor neighborhoods, facilities
are likely to be in worse condition, are over-used, and provide lower levels of health
and educational care. Even ‘social capital’ is likely to be of less utility. Granovetter
(1973) shows how even strong ties with friends and neighbors are of little utility if there
are no resources to share or no one has access to jobs. The public-private divide also
puts the public sector at a competitive disadvantage. Better pay and conditions of work
mean that the private sector can recruit the best teachers and medical personnel.

Decentralization
The fourth area in which globalization is shaping Latin American cities in broadly
similar ways is through public policy. The issues facing urban policy-makers are now
more similar than they were in the period of ISI. An important reason for this similarity

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Globalization and Latin American cities 119

is that globalization is accompanied by a relatively uniform policy agenda of economic

reform advocated by the international lending agencies. Privatization and the relative
reduction in state direct expenditures are part of a package accepted with various degrees
of enthusiasm by Latin American governments. Perhaps the most significant part of this
package in terms of the organization of the Latin American cities is administrative
decentralization. Decentralization is now in full swing in most Latin American countries,
even in those like Chile, which are not federations and have a highly centralized tradition
of public administration.
Decentralization entails the devolution of responsibilities for education, health and
social welfare from national government to lower order administrative units, such as
regional units (states, provinces, etc.) or municipalities. In metropolitan areas,
decentralization may mean the devolution of national responsibilities to districts within
the metropolis instead of to a metropolitan government. Accompanying decentralization
is an emphasis on encouraging citizen participation in decision-making, which is also
found in each of the cities that I am considering and also elsewhere in Latin America,
such as in Brazil and in Peru. Countering the participatory aspects of centralization are
the targeting policies that are often part of the decentralization program. These provide
subsidies to the most needy people who are identified by a means test administered by
local government officials. This subsidy, however, is at times in place of subsidies
previously given to community organizations, such as comedores (soup kitchens). One
effect of this can be to reduce the amount of help that the very poor receive since they
are no longer part of a community-based network that includes the somewhat better-off
members of the neighborhood who previously had given their time to run the community
organization. This has been an issue in Lima, where the Fujimori government sought to
weaken popular organizations such as the comedores, and give aid directly and
clientelistically to the very poor.7
In the current period, decentralization can thus have both negative and positive
implications for the welfare of urban inhabitants. Because of fiscal austerity,
decentralization often means the devolving of responsibilities without the finance needed
to implement them effectively. Since many lower-order administrative units have neither
the experience nor the personnel to run the new responsibilities, this can lead to less
effective services at the local level in education, health and welfare. However, local
administration when accompanied by effective participation by local citizen
organizations can lead to a more efficient use of resources through community
mobilization and input. These issues are an important current research agenda, as local
government becomes a crucial issue in the Latin American city (Spink, 2000).

Globalization and popular participation

The other side of economic restructuring in the 1990s has been the intensification of
citizenship concerns. This has come from various sources. One of these is the coming
to power of democratic governments in the late 1980s and 1990s, seeking to break with
authoritarian regimes. This was the case in Chile, Argentina and Uruguay; but even in
Mexico, where the PRI, did not lose power until 2000, there had been a growing
emphasis on democratization and citizen participation. In each country, the national
government runs various programs designed to increase local participation in decision-
making and these are complemented or rivaled by municipal programs. The international
agencies such as the World Bank stress, as part of their social agenda, decentralization
and citizen participation. In all four countries, the international lending agencies and the
United Nations have sponsored projects to raise consciousness about women’s rights,
children’s rights and the rights of citizens in general.

7 Personal communication from Josefina Huaman of Alternativa, Lima.

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120 Bryan R. Roberts

Equally, if not more important, the number of national and international NGOs
concerned with advocacy and community development has risen enormously. An
example from Brazil illustrates the magnitude of this increase. In Brazil, the not-for-
profit sector added 344,149 jobs between 1991 and 1995 to employ 1,119,533 people
(Landim and Beres, 1999). Advocacy groups use international forums and the United
Nations to heighten awareness of the rights of women, children, minority ethnic groups
and other potentially vulnerable groups. Governments often adopt their conclusions.
These international forums have their counterparts in meetings within countries,
mother’s clubs, soup kitchens, neighborhood associations and so on. With the help of
NGOs, these local associations formulate their own demands, incorporating many of
those advocated internationally.
The effectiveness of this citizen participation and of rights advocacy in influencing
outcomes is not clear. The many social movements in Latin America in the 1970s and
1980s had little clear impact in changing the structure of economic inequality. Urban
social movements were, on the whole, ineffective in changing urban power structures and
in securing a better quality of life for the urban poor (Touraine, 1987; Gilbert, 1998).
However, as Jelin (1996) points out, the effectiveness of participation and of rights
advocacy lies as much in the process itself, as in concrete changes in laws or dramatic
shifts in the distribution of resources. The increase in public discourse about rights and
about participation and the activities at the local level around these issues change the
language of political debate. Governments and elites may still seek to impose policies
from above, but they are constrained to do so through the words and symbols that
recognize citizens as participative and rights bearing. Emblematic of this in the countries
that I am discussing is the wide use of Mesas de Concertación (Roundtables for reaching
agreement) in public policy. These meet at the local and national levels, stress
participation by community representatives and serve as a forum for airing public policies.
These developments do not necessarily alter power structures. Indeed, they may
deepen and strengthen the forms of control from above. Latin American states have
become more active and managerial (Bresser Pereira and Cunill Grau, 1998). This is
also the case in the four countries considered here. There is, for instance, an increasing
rationalization of citizenship in which bureaucracies emphasize means, such as numbers
participating in courses or attending meetings, rather than the ends of increasing
effective citizen demand-making (Roberts, 2005). Also, the penetration of the state in
the lives of the Latin American urban population has increased enormously in recent
decades. National and local government agencies have become more active in
implementing anti-poverty and community development initiatives in many low-income
neighborhoods. Add to these initiatives the increasing contact with state agencies
through programs in preventative health or parental involvement in education. When to
state activities are added those of NGOs, there is a sense in which, in contrast to the
1960s, no one leaves the poor alone any more. When they are effective — and often
they are not — they are positive developments for the welfare of low-income
populations. However, the main point I want to derive from this increasing citizen-
related activity is that the lives of city dwellers in Latin America have become
inextricably bound into a web of relations that are local, national and international.
I conclude this section by considering a relatively new initiative in citizen
participation that has been launched in Peru — Mesas de Concertación en contra la
Pobreza. The origin of these Mesas lies in the early 1990s when they emerged among
community groups as a means of mobilizing local energies to combat food and other
shortages in Lima and elsewhere. With the fall of Fujimori in 2000, the transition
government passed a law that made the Mesas de Concertación a constitutional
requirement. By law, Mesas have to be established in every province of the country,
with one for the metropolitan area of Lima. Each Mesa has a council made up of
representatives of government, of NGOs, of the churches and of community
organizations. There is a national Mesa to coordinate the work of the provincial ones.
The tasks of the Mesas are to formulate short, medium and long-term priorities for

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Globalization and Latin American cities 121

community development in terms of urban or rural infrastructure, health and educational

services, security, recreation and job creation. The short-term priorities are, in effect, an
executive plan for the following year. In the case of Lima, these plans are formulated
through working-groups created at the municipal and cono (district made up of several
municipalities) level. Community organizations discuss their priorities and elect
representatives to attend the meetings. The priorities of the various districts and conos
are reconciled at meetings at the metropolitan level. Once the strategic plans are
finalized, they are passed to Congress and to the appropriate government departments.
There is, however, no clear mechanism to ensure that these plans become part of the
budget of the government.
In the meeting of the Mesa for metropolitan Lima that I attended in July of 2001,
about 200 people were present to discuss the stages in formulating the plans. The
majority of those attending were representatives of community organizations —
neighborhood associations, housing associations, mothers’ clubs, soup kitchens etc.
There were several mayors of municipalities, NGO workers and some national
government officials. An economist from an NGO explained the planning process,
including the legal requirements for the budgetary process in Peru. The audience
participated actively, with a little tension between participants in terms of priorities and
in terms of the feeling of community representatives that NGO workers sometimes did
not take their opinions seriously. A community representative presented the plan for
health of one of the Conos. The analysis of the health deficits in the Cono was
statistically detailed and convincing. The solutions — more medical personnel, better-
equipped clinics, and free medicines — were also specific and ordered in priority.
My purpose in describing this meeting is to make the basic point that the process of
participation inevitably raises community awareness of urban inequalities and of citizen
rights. There are, of course, many people in low-income Lima neighborhoods who do
not participate, but most are likely to have a neighbor, friend or a relative that does. If
government does not respond, at least partially, to the demands that are being formulated
then it runs the risk of confrontations as a result of the heightened expectations raised
by the participatory process. Remember, also, that these grass-roots activities have
considerable visibility nationally and internationally. They are reported in the media and
supported by international advocacy groups, which both provide information to local
groups and receive it from them. Globalization has, then, a pervasive influence on popular
participation and on the sense of rights in Latin American cities. The process it represents
and its potential consequences for redressing urban inequalities both need study.

Conclusion
The impact of globalization on Latin American cities is ambiguous and contradictory.
The impact of economic globalization on labor markets and on the configuration of
urban space accentuates economic insecurity and urban inequalities. Indirectly, it
isolates low-income populations, reducing the public spaces in which they interact with
the better-off population as private facilities for health, education and recreation spring
up around the city. At the same time, globalization has promoted a greater awareness
on the part of governments, international organizations and citizens of the need for
innovation in social policy. It has also promoted the spread of information of their
rights among low-income populations. Whereas economic policy is bereft of new ideas,
social policy has become the forum for discussing alternative ways forward. The fiscal
austerity imposed by economic policy make these something of an illusion, but they are
illusions that generate much debate and much activity at the local level. The local level
is now, much more than in the past, a dynamic interface where state, international
organizations, NGOs and the poor interrelate. It is thus likely to alter the nature of
urban government. Authoritarian bureaucracy combined with clientelism might have
been sufficient to order the Latin American cities of the past. Now control is more

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122 Bryan R. Roberts

likely to depend on managerial administration combined with at least the appearance of

citizen participation.
Bryan R. Roberts([email protected]), Department of Sociology, University of Texas at
Austin, 1800 Main Building, Austin, Texas 78712, USA.

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