This article adopts the concept of development as freedom and the relationship between income and capabilities to analyze and compare macroeconomic, demographic and poverty trends and inequalities in Latin American and the Caribbean countries, and the responses from governments to promote the inclusion of the poorest and marginalized population groups in development and policies. Differences in population structures indicate that poverty and gender, generational and race inequalities fragment societies. Policies oriented to reduce poverty have been implemented with a set of combined programs such as cash transfers articulated with actions in nutrition, health, education, day-care programs for poor children, civil registration and other programs to promote poverty reduction and the conciliation of domestic and work life for poor women and social protection. Some good practices are discussed, particularly in Brazil and Mexico. During the last 15 years, the Conditioned Cash Transfers programs raised public support and political consensus, guaranteeing continuity in their implementation, development and integration with other social protection programs. Currently there are 18 countries implementing such programs, covering approximately 25 million households and over 133 million people, representing 19% of the Latin American and Caribbean. Policies to reduce poverty, in combination with income distribution and social protection in nutrition, health, education, civil registration and day-care for children, have contributed to human development, and also promoted internal market of consumers, even in rural areas, mobilizing local economies and promoting the return of investments to development. Despite the economic crisis in 2008-2009, Latin America had a relatively good performance in the world economy, demonstrating that social and economic inclusion can be compatible with development. That positive balance is fundamental to guarantee the inclusion of rural, indigenous, women and youth in access to services, as well as to reducing poverty and inequalities in the region.