-Came across an interesting article by Stephen Haber on Latin America's economic transformation in today's Wall Street Journal. Chile is described as a model for economic stability and growth in the region. I’ve pasted relevant sections below along with a link to the article in its entirety. –Saludos...
“Chile provides perhaps the most obvious example of a country that has been undergoing dramatic changes -- and its success has served as a model for the rest of the region. Beginning in the 1970s, a series of reforms reshaped the economic playing field. Analysts often point to Chile's sound macroeconomic policies -- and rightly so. But these policies are the result of parliamentary rules that create incentives for legislators to converge on balanced budgets and of electoral rules that favor the two largest parties -- one of which is center-right and the other center-left, thereby minimizing the probability of a return to populist economic policies.
Other institutional reforms changed the nature of regulation and the enforceability of property rights. Under the Chilean constitution, the government can only expropriate private property if Congress enacts a specific law, and even then compensation must be paid in cash at market prices; all economic activities are legal, unless Congress passes specific laws regulating them; and citizens can protect themselves from arbitrary government actions that reduce their rights to life, liberty and property by obtaining an injunction from an appellate court -- in which they need not be represented by legal counsel. Chilean gross domestic product per capita has doubled over the past 18 years, the fastest sustained expansion in the country's history. Poverty rates have fallen precipitously. Young Chileans from humble families are attending college and buying homes. Indeed, Chile has a homeownership rate roughly equal to that of the United States, about 70%.”
Read the full article
“Chile provides perhaps the most obvious example of a country that has been undergoing dramatic changes -- and its success has served as a model for the rest of the region. Beginning in the 1970s, a series of reforms reshaped the economic playing field. Analysts often point to Chile's sound macroeconomic policies -- and rightly so. But these policies are the result of parliamentary rules that create incentives for legislators to converge on balanced budgets and of electoral rules that favor the two largest parties -- one of which is center-right and the other center-left, thereby minimizing the probability of a return to populist economic policies.
Other institutional reforms changed the nature of regulation and the enforceability of property rights. Under the Chilean constitution, the government can only expropriate private property if Congress enacts a specific law, and even then compensation must be paid in cash at market prices; all economic activities are legal, unless Congress passes specific laws regulating them; and citizens can protect themselves from arbitrary government actions that reduce their rights to life, liberty and property by obtaining an injunction from an appellate court -- in which they need not be represented by legal counsel. Chilean gross domestic product per capita has doubled over the past 18 years, the fastest sustained expansion in the country's history. Poverty rates have fallen precipitously. Young Chileans from humble families are attending college and buying homes. Indeed, Chile has a homeownership rate roughly equal to that of the United States, about 70%.”Read the full article
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