Is Chile a model for economic development?

Abstract

The Chilean economy is usually highly praised as a successful one since the imposition of neoliberal reforms, under the dictatorship of general Pinochet in 1973. The fact is that the four decades that have elapsed include sub-periods with quite different policy approaches and notably diverse outcomes. There is neither one unique model nor only one outcome. The four decades growth is moderate, averaging 4.2% per year; during the 16 years of dictatorship averaged 2.9% (meager), during one quarter of a century of democracy, 5.1%, a good performance, but a vigorous 7.1% in the first years (1990-98) and a modest 3.9% in the fifteen more recent years. Sometimes has performed closer to become a “model” for development, sometimes the opposite. Focusing in three episodes (1973-81, 1990-98 and 2008-13), we explore the underlying explanatory variables and some lessons for building “a model for development”.