The response that best analyzes the argument that high levels of inequality have led to political instability in Latin America is:
"An elite social group with its roots in the power of the Spanish, Portuguese, and French colonial elite still controls much of the region's resources and money. This causes institutions to look after the needs of this elite group, rather than all of a country’s population."
This response directly addresses the issue of inequality by highlighting how the concentration of economic and political power in the hands of a small elite can lead to neglect of the broader population, contributing to political instability.