Unformatted text preview: Chile under Military Rule April 15 Not Temporary Military Intervention Designed to be permanent form of authoritarian rule "Bureaucratic-Authoritarian" Rule in Latin America
How did it differ from patrimonial authoritarianism? More "modern" form of authoritarian rule; later stage of economic and political development Rule by professional military institutions Doctrine of National Security; focus on domestic enemies Demobilization of previously activated popular sectors; systematic repression Technocratic allies; emphasis on economic modernization Authoritarian Rule and Market Reform Chile's free market experiment; birthplace of the modern trend toward economic liberalism, rapid diffusion to rest of Latin America after 1980's debt crisis Led by University of Chicagotrained Chilean economists "Chicago Boys" Based on rejection of state intervention in the economy; believe state intervention distorts markets, undermines competitiveness, and breeds "rent seeking" behavior Strong faith in the marketplace, private enterprise, and opening to global markets Strong international support: U.S., private banks, IMF, World Bank Core Features of the Neoliberal Model Cut government spending and public employment Liberalize trade; cut tariffs, etc. Privatize stateowned enterprises Privatize social services (pensions, health, etc.) Eliminate price controls and subsidies Deregulate labor markets (i.e., easier to hire and fire workers) Encourage foreign investment Did Market Reforms Depend on Military Rule? Dictatorship insulated technocrats from popular political pressures; high level of state "autonomy" Dramatic weakening of labor unions, peasant associations, and other organized interests that would have blocked market restructuring under democracy Even promilitary business allies had limited influence on public policies But eventually spread to other Latin American countries with democratic regimes in the 80's and 90's following the debt crisis Positive Effects of Chile's Neoliberal Model Two busts (197475, 198283), two booms (197681, post1984); little net growth, but set the stage for prolonged economic expansion late 80's through the 90's Gradual reduction of inflation to single digits Develop dynamic new export sectors agriculture, forestry, fishing, etc. Attract widespread foreign investment Increased efficiency and competitiveness become a model for the rest of Latin America Chile's Neoliberal Model under Pinochet: The "Social Deficit" Lower wages Higher unemployment, job insecurity More people below the poverty level, though some gains in alleviating extreme poverty Increased inequality Sharp declines in labor unions, peasant associations; "atomization" of civil society ...
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- Spring '07
- ROBERTS, K
- Free Market, authoritarian rule, Neoliberal Model