Chile's Reform Decision Points

The Brenthurst Foundation is pleased to announce the release of May's final discussion paper - Chile's Reform Decision Points.

From poverty levels of 50 per cent and a per capita income of just US$730 in 1975, Chile’s real income per person has increased to over US$13 000 in four decades, while life expectancy has risen from 63 to 79 over this time. Successive civilian governments have, since 1990, built on a foundation of openness and fiscal prudency established by the military during their 17 years of rule.

Overall, five lessons stand out from Chile’s reforms: The first involves a word of warning for those authoritarians attracted by the Pinochet growth thesis, aside from the ugly human rights aspects. While the military government put in place the foundations of growth, the economy only took off after the reinstallation of democracy.

A second lesson lies in an overarching imper- ative to take care of creating growth with equity. A third lesson is the need for low inflation and high growth as important prerequisites to development. Fourth, Chilean politicians have, until now, been remarkably acces- sible. Related to this, finally, Chile’s experience speaks of the importance of political continuity.