Chile

   

Policy Performance

#36

Economic Policies

#22
Despite a stable macroeconomic regime and generally prudent budget policy, Chile receives a middling overall score (rank 20) with regard to economic policies. Its score on this measure has improved by 0.1 point since 2014.

The economy is open and competitive, but depends strongly on commodity exports rather than industrial activity. While the labor market is highly regulated, the government is seeking to change labor laws that date to pre-democratic times, hoping in part to address the country’s high degree of inequality.

Though unemployment rates are stable and moderate, the vast majority of workers earn low wages. Labor efficiency is low. A recent tax reform increased corporate taxes, but a strong reliance on high, flat value-added taxes remains. The government has been unable to pass more ambitious tax reforms addressing issues such as evasion and equity.

A fiscal rule linking spending tightly to revenue estimates has been challenged by declining copper prices and a slowdown in growth.

Social Policies

#34
With wealth determining access to some social resources, Chile scores relatively poorly (rank 34) in the area of social policies. Its score in this area is unchanged relative to 2014.

Persistent gaps between relatively poor-quality public schools and expensive private schools have sparked protests since 2010. Reforms have increased public funding, but the system remains divided and in need of improvement.

The income distribution is highly unequal, with the lower-middle class in particular often living precariously on credit. Exclusion often follows ethnic lines, and social mobility is limited. The government’s pending labor, education and tax proposals are expected to have pro-inclusionary effects.

Health care is split between private and public systems. The public system provides broad coverage, with varying – though improving – quality. Provision of preschool education is improving, but often fails to correspond to parents’ working hours. The pension system is financially sound, but does not prevent poverty for many recipients.

Environmental Policies

#36
Lacking a strong focus on conservation, Chile falls into the bottom ranks internationally (rank 36) with regard to environmental policies. Its score in this area has improved by 0.3 points relative to 2014.

Environmental institutions have been modernized in recent years, with oversight bodies becoming increasingly effective. However, policy is oriented toward complying with international markets rather than toward sustainability. Industrial interests have considerable influence over policy, but courts have occasionally halted development on environmental grounds.

The country does provide support for existing global environmental regimes, but does not initiate reforms or seek to shape agendas.

Democracy

#31

Quality of Democracy

#31
Despite generally stable institutions, Chile receives a low overall ranking (rank 31) with regard to quality of democracy. Its score on this measure has declined by 0.2 points since 2014.

A new electoral law expanded both legislative houses, changed the proportional-representation model and introduced gender quotas for candidate lists. Wide-ranging evidence of corruption in political-party funding has emerged across the political spectrum. New anti-corruption measures have been proposed in response.

Attempts to influence the media vary by governing coalition. While civil rights are generally protected, protests by indigenous groups and students have been strongly repressed. Gender and ethnic discrimination remain concerns, but same-sex unions have been newly accepted.

Courts are strong and independent. Links between political and economic elites reinforce existing patterns of privilege.

Governance

#29

Executive Capacity

#17
With a stable but still-modernizing state, Chile falls into the upper-middle ranks (rank 17) with regard to executive capacity. Its score in this area has improved by 0.1 point relative to 2014.

Specialist units in ministries engage in strategic planning. The government office has sufficient capacities to evaluate line-ministry proposals, and collaborates in their development. Informal coordination plays an important role.

RIAs regularly address fiscal impact, but not environmental or social issues. The government’s frequent consultation with civil society is skewed toward economic interests. Implementation performance is excellent on general budgetary issues, but can be poor in other areas. The current government has scaled back ambitious reforms, but has launched debate on constitutional reform that could make them more feasible.

National standards for services such as education and health care are not met in some poor regions. An ongoing decentralization program is intended to address these and other structural weaknesses.

Executive Accountability

#35
With a mixed pattern of strengths and weaknesses, Chile scores relatively poorly overall (rank 35) with regard to executive accountability. Its score in this area has declined by 0.7 points relative to 2014.

Legislators have modest resources, but good formal executive-oversight powers. The Comptroller serves as an independent and influential audit body. No ombuds office exists.

Low education levels combined with a dependence on TV news give a large share of the population a poor understanding of public policy. The oligopolistic media distorts policy discussions.

Presidential candidates’ platforms are more relevant than party agendas, while party leadership controls candidate selection. Economic interest groups’ policy proposals tend to be plausible but narrowly focused. The civil-society sector has a wide diversity of capabilities.
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