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

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  • Solimano, Andres
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    Abstract

    The Chilean development story of the last two to three decades is a mix of successes in the macro, growth, poverty and trade fronts but also of failure in reducing chronic inequality of income and wealth. In addition, the current growth patterns have serious impacts on the environment, natural resources and energy demand. Adverse features of the Chilean development model include urban insecurity and rising crime, pollution, pressure on natural resources, congestion and social stratification in access to education, health and pensions. A reduction in social inequality would require changes in several fronts: more public-sector resources devoted to education; curtailing current concentration of wealth and market shares in banking, retail trade, and private pensions systems, private health provision, and other sectors; more effective regulation of big business; rebalancing of labour unions. bargaining power capacities and effective support to the sector of small and medium size enterprises. Chilean democracy would benefit from a redefinition in development priorities towards less power for the dominant elites (economic and political) and broader social participation for the middle class and the working people to support dynamic and more equitable

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    File URL: http://www.wider.unu.edu/stc/repec/pdfs/rp2009/RP2009-37.pdf
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    Paper provided by World Institute for Development Economic Research (UNU-WIDER) in its series Working Paper Series with number UNU-WIDER Research Paper RP2009/37.

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    Length: 35
    Date of creation: 2009
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    Handle: RePEc:unu:wpaper:rp2009-37

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    Keywords: Chile; development; inequality; growth; natural resources; social policy; middle class;

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    1. Rodrik, Dani & Alesina, Alberto, 1994. "Distributive Politics and Economic Growth," Scholarly Articles 4551798, Harvard University Department of Economics.
    2. Rodrigo Fuentes & Mauricio Larraín & Klaus Schmidt-Hebbel, 2006. "Sources of Growth and Behavior of TFP in Chile," Latin American Journal of Economics-formerly Cuadernos de Economía, Instituto de Economía. Pontificia Universidad Católica de Chile., vol. 43(127), pages 113-142.
    3. Davies, James B. & Sandstrom, Susanna & Shorrocks, Anthony & Wolff, Edward N., 2008. "The World Distribution of Household Wealth," Working Paper Series DP2008/03, World Institute for Development Economic Research (UNU-WIDER).
    4. López, Ramón & Miller, Sebastian J., 2008. "Chile: The Unbearable Burden of Inequality," World Development, Elsevier, vol. 36(12), pages 2679-2695, December.
    5. José Díaz & Rolf Lüders & Gert Wagner, 2007. "Economía Chilena 1810-2000. Producto Total y Sectorial. Una Nueva Mirada," Documentos de Trabajo 315, Instituto de Economia. Pontificia Universidad Católica de Chile..
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