In the last decade, research on social policy in Latin America has multiplied tenfold. However, few clear patterns have emerged despite the large number of new studies, especially on social policy since the 1980s. For example, several quantitative studies examining the relationship between economic globalization, particularly trade and financial liberalization, cannot seem to agree on under what circumstances and to what extent economic liberalization contributes to either the contraction or expansion of spending on public social security, health and education. Similarly, qualitative studies have documented both retrenchment and expansion of social protection policies, including public pensions and social assistance.

This paper contends that the apparent contradictions and ambiguity in social policy change since the 1980s reflect an overall shift in public welfare policy away from social insurance toward maintaining minimum benefit floors and expanding targeted social assistance or means‐tested noncontributory benefits. The paper also suggests that this pattern of change can be best understood as a product of economic liberalization, political liberalization, and social policy legacies. These three factors intersected in ways that shaped both efforts to retrench or privatize social insurance and expand social assistance or insurance coverage and benefits for low‐income groups.