COVID-19, elites and the future political economy of inequality reduction in Latin America Benedicte Bull and Francisco Robles Rivera Abstract The literature is divided on the impact of pandemics on income inequality. The economic literature points to an increase in inequality as a result of pandemics, whereas historical and political science literature argue that pandemics may create breakdowns of institutions, maintaining inequality due to elite shifts and pressure from below. We review current data on the impact of COVID-19 and find that there is evidence of an upward income transfer as well as some elite shifts in the region. However, elites have controlled the economic measures to alleviate and confront the crisis and there is little evidence of a resultant institutional breakdown. Keywords COVID-19, viruses, epidemics, economic aspects, income distribution, elite, wealth, poverty, economic policy, Latin America JEL classification N46, P16, D36 Authors Benedicte Bull is a professor in the Centre for Development and the Environment (SUM) at the University of Oslo, Norway. Email:
[email protected]. Francisco Robles Rivera is a researcher in the Institute of Social Research and Lecturer at the School of Communication at the University of Costa Rica. Email:
[email protected]. 78 CEPAL Review N° 132 • December 2020 I. Introduction The debate on the effect of the coronavirus disease (COVID-19) on inequality has changed dramatically over the last months. While COVID-19 was portrayed as “the great equalizer” in the early stages of the spread of the infection and lockdown measures (Mein, 2020), evidence now abounds that the pandemic will increase poverty and inequality (Busso and Messina, 2020).