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Political Institutions, Policymaking Processes and Policy Outcomes in Chile

  • Joaquín Vial
  • Cristobal Aninat
  • John Landregan
  • Patricio Navia

This analysis characterizes the salient features of the policymaking process (PMP) in Chile. It emphasizes the influence of political institutions on the PMP and examines the linkage between policymaking and policy outcomes in Chile. The salient features of the Chilean PMP are the electoral system and the associated party system, characterized by two long-lived coalitions, a powerful Executive, with de facto control over the agenda, a relatively independent judiciary, a bureaucracy that is relatively free from corruption even by the standards of the OECD, and a series of veto points in the policymaking process that permit adversely affected actors to block policy change. Consistent with the theoretical framework of Spiller and Tommasi (2003), the small number of actors who interact repeatedly and the predictability of policy implementation and of law enforcement lead to a policymaking process in which transaction costs are low and inter-temporal political exchanges are credible. The veto players help to give inter-temporal exchanges their credibility, but they can also block reforms. Looking at policy areas in cross section, we find that policy areas in which policymakers` interests are more nearly aligned, and in which there is more rapid exogenous change, are associated with more successful efforts at reform, while in areas in which the interests of the Executive and the various veto players diverge, policy tends to stagnate.

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Paper provided by Inter-American Development Bank, Research Department in its series Research Department Publications with number 3222.

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Date of creation: Feb 2006
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Handle: RePEc:idb:wpaper:3222
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  1. Green, Edward J & Porter, Robert H, 1984. "Noncooperative Collusion under Imperfect Price Information," Econometrica, Econometric Society, vol. 52(1), pages 87-100, January.
  2. Eduardo Lora, 2001. "Las Reformas Estructurales en América Latina: Qué Se Ha Reformado y Cómo Medirlo," IDB Publications (Working Papers) 7638, Inter-American Development Bank.
  3. Alejandra Mizala & Pilar Romaguera, 2001. "La legislaci�n laboral y el mercado del trabajo en Chile: 1975-2000," Documentos de Trabajo 114, Centro de Economía Aplicada, Universidad de Chile.
  4. Barry Eichengreen & Ricardo Hausmann & Jürgen Von Hagen, 1999. "Reforming Budgetary Institutions in Latin America: The Case for a National Fiscal Council," Open Economies Review, Springer, vol. 10(4), pages 415-442, October.
  5. Alesina, Alberto & Hausmann, Ricardo & Hommes, Rudolf & Stein, Ernesto, 1999. "Budget institutions and fiscal performance in Latin America," Journal of Development Economics, Elsevier, vol. 59(2), pages 253-273, August.
  6. Marcel, Mario, 2001. "Balance Estructural del Gobierno Central. Metodología y Estimaciones para Chile
    [Structural Bazlance of Central Government. Methodology and estimates for Chile]
    ," MPRA Paper 43338, University Library of Munich, Germany.
  7. Pablo T. Spiller, 2003. "The Institutional Foundations of Public Policy: A Transactions Approach with Application to Argentina," Journal of Law, Economics and Organization, Oxford University Press, vol. 19(2), pages 281-306, October.
  8. Mariano Tommasi & Pablo T. Spiller & Ernesto Stein, 2003. "Political Institutions, Policymaking Processes, and Policy Outcomes. An Intertemporal Transactions Framework," Working Papers 59, Universidad de San Andres, Departamento de Economia, revised Jul 2003.
  9. Friedman, James W, 1971. "A Non-cooperative Equilibrium for Supergames," Review of Economic Studies, Wiley Blackwell, vol. 38(113), pages 1-12, January.
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