Policy Performance


Economic Policies

Despite a stable macroeconomic regime and generally prudent budget policy, Chile falls into the lower-middle ranks (rank 26) with regard to economic policies. Its score on this measure is unchanged relative to 2014.

GDP growth improved during the review period, reaching about 4%. The economy is open and competitive, but depends strongly on commodity exports rather than industrial activity. Collective-bargaining reforms under the new administration improved employers’ leverage, while potentially promoting labor flexibility and productivity.

The unemployment rate increased slightly to above 7%, a high rate as compared to the last six years. The vast majority of workers earn low wages. Labor productivity is low. Recent tax reforms increased corporate taxes, while further simplifying the tax system and ease burdens on SMEs. A strong reliance on high, flat value-added taxes remains.

An increase in tax revenues and decline in current expenditure resulted in lower deficits in 2018. Overall public debt levels are growing slowly, but remain low by international standards, in large part due to a fiscal rule that links government spending to estimated revenue trends.

Social Policies

With wealth determining access to some critical social resources, Chile receives comparatively low rankings (rank 33) in the area of social policies. Its score in this area has improved by 0.2 points relative to 2014.

Protests over severe gaps between poorly funded, poor-quality public schools and expensive private schools have led rising funding and subsidies for vulnerable students. A new program provides tuition-free university access for low-income students.

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. An influx of Venezuelan refugees has radically swollen the migrant population. Special visas for this group are available, but immigration rules have otherwise been tightened by executive degree.

Health care is split between private and public systems. The public system provides broad coverage, with varying – though improving – quality. Gendered health-contribution policies mean maternity-care costs are borne solely by women. Abortion laws have been loosened, but remain restrictive. Provision of preschool education is improving, but often fails to correspond to parents’ working hours.

Environmental Policies

Having lacked a strong focus on conservation in the past, Chile scores comparatively poorly (rank 34) with regard to environmental policies. However, its score in this area has improved by 1.0 point 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.

A new climate-change law has been in development, with an emissions-reduction system and climate-governance system expected to be enacted in 2019.

Chile has signed and ratified the Paris agreement on climate change, which may accelerate institutional efforts to protect and preserve natural resources and environmental quality. The country does provide support for existing global environmental regimes, but does not initiate reforms or seek to shape agendas.



Quality of Democracy

Despite generally stable institutions, Chile falls into the lower-middle ranks (rank 27) with regard to quality of democracy. Its score on this measure is unchanged since 2014.

A new electoral law, applied in 2017 for the first time, has expanded both legislative houses, changed the proportional-representation model and introduced gender quotas for candidate lists. New anti-corruption measures have been implemented in response to political-party funding scandals, though no mechanisms are in place for monitoring conflicts of interest for high-level politicians.

A bailout package allowed the main state-owned TV station to survive bankruptcy in 2018. A recently passed law bars civilians from being tried by military courts. The new government has continued plans to create a ministry for and secure constitutional recognition for indigenous peoples.

Gender and ethnic discrimination remain concerns, but same-sex civil unions have been accepted, and new electoral and labor laws promote women’s participation. Courts are strong and independent. Links between political and economic elites reinforce existing patterns of privilege.



Executive Capacity

With a stable but still-modernizing state, Chile falls into the middle ranks (rank 19) with regard to executive capacity. Its score in this area is unchanged 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. Ex post evaluations are occasionally carried out by external consultants. The government’s frequent consultation with civil society is skewed toward economic interests, which have considerable influence over the development of some regulations. However, agencies subsequently tend to enforce regulations without bias.

Education and primary health care standards in poor regions are improving, but a huge gap remains to be closed. An ongoing decentralization program giving greater power and funding flexibility to elected regional governors, to be directly elected for the first time in 2020, is intended to address these and other structural weaknesses.

Executive Accountability

With a mixed pattern of strengths and weaknesses, Chile falls into the bottom ranks (rank 37) with regard to executive accountability. Its score in this area has improved by 0.1 point relative to 2014.

Legislators have modest resources, but good formal executive-oversight powers. However, under Chile’s non-parliamentary system, congressional committees’ institutional degree of control is rather low. No general ombuds office or data protection authority exists, but a new children’s ombudsman has been created, and a transparency office is being expanded to cover personal data protection issues.

Low education levels combined with a dependence on TV news means that a large share of the population has a poor understanding of public policy. The oligopolistic media distorts policy discussions, while the bailout package for the state-owned TV station has preserved its mandate to provide more balanced reporting.

Presidential candidates’ platforms are more relevant than party agendas, and party leaders control candidate selection. Numerous think tanks are directly connected to economic interest groups. These groups’ policy proposals tend to be plausible but narrowly focused. The civil-society sector has a wide range of capabilities.
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