Determinants of state mining enterprise resilience in Latin America

The performance of many state‐owned mining firms in Latin America has been disappointing. There is at least one interesting exception: Chile's Codelco has been more resilient than, say, its counterparts in Bolivia and Peru. The state mining firms of Bolivia and Peru were decapitalized by low autonomy, flawed tax policies and weak macroeconomic policies ‐ even as the importance of such firms in the economy increased. In contrast, Codelco benefited from an orthodox macroeconomic policy which sensibly, if belatedly, adopted a mineral stabilization fund. It also enjoyed a more profit related tax regime and somewhat higher commercial autonomy. Nevertheless, the Chilean experience requires some important qualifications before it can be used as a model for other developing countries.