Three Decades of Neoliberal Economics in Chile: Achievements, Failures, and Dilemmas

Abstract

This chapter assesses the strengths and weaknesses of the Chilean development model based on neoliberal economic policies, combined with the more active social policies but in the context of persistent inequality of income and wealth. The chapter is organized as follows. Section 2 provides an overview of the Chilean economy from a medium- to long-run perspective. Section 3 analyses the main features of the macroeconomic policies and the economic growth in Chile in the years 1990–2007, comparing the economic performance of the Aylwin, Frei, Lagos, and Bachelet administrations. Section 4 looks at the joint behaviour of growth, poverty, and inequality in the last twenty years, and provides data on income and wealth distribution. Section 5 reviews the factors that impinge on the development potential of the Chilean economy, such as education, spending on science and technology, the cost of doing business, institutional capacities, and other factors. Section 6 concludes.

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