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 has declined by 0.1 point since 2014.

While economic activity has picked up somewhat, GDP growth rates remain low. The economy is open and competitive, but depends strongly on commodity exports rather than industrial activity. Recent labor reforms have sought to broaden collective bargaining and strengthen women’s representation in labor-union management. A key goal is to address the country’s high degree of inequality.

The unemployment rate remained stable but relatively high by historical standards, at about 6.9%. The vast majority of workers earn low wages. Labor efficiency is low. Recent tax reforms increased corporate taxes and addressed issues such as evasion, equity, and the promotion of company investments and private savings. A strong reliance on high, flat value-added taxes remains.

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

Social Policies

With wealth determining access to some critical social resources, Chile receives comparatively low rankings (rank 34) in the area of social policies. Its score in this area has improved by 0.3 points 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, particularly for vulnerable students. However, further steps promoting equity and improving quality standards are needed.

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. Concerns over the pension system have led to massive protests in recent years. An influx of Venezuelans has changed the character of the migrant population.

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. Provision of preschool education is improving, but often fails to correspond to parents’ working hours.

Environmental Policies

Lacking a strong focus on conservation, Chile scores comparatively poorly (rank 35) with regard to environmental policies. However, its score in this area has improved by 0.7 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.

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 29) 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.

The largest state-owned TV station was declared bankrupt in 2017, clouding its future. A new law bars civilians from being tried by military courts. The government issued an apology to the indigenous population for past treatment, and introduced a plan offering recognition of the community’s collective and linguistic rights.

Gender and ethnic discrimination remain concerns, but same-sex unions have been newly 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 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. All recent governments have shown some communication incoherencies.

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 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 36) with regard to executive accountability. Its score in this area has declined by 0.4 points relative to 2014.

Legislators have modest resources, but good formal executive-oversight powers. However, as Chile does not have a parliamentary system, congressional committees’ institutional degree of control is rather low. 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, while the bankruptcy of the state-owned TV station raised questions as to the future of its 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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