The Effects Of Economic And Political Shocks On Corporate Governance Systems In Chile

We present a synthesis of the major political and economic events that have influenced the development of laws and capital markets in Chile, and their impact on the evolution of Chilean conglomerates through time. We find that laws and regulations in Chile have been extremely «path dependent», corresponding in most cases to reactions to crises or major events, and argue that these events have persistently shaped corporate governance systems in Chile. We identify the episodes of financial repression and credit rationing, the privatization rounds, the debt crisis of the eighties and the pension fund reform, as the most important events conditioning the development of corporate governance systems in Chile. Since most of these phenomena have also occurred in other countries in the region, this study provides some lessons of general interest.