The Reformulation of Social Policy in Chile, 1973-2001: Questioning a Neoliberal Model (original) (raw)

2003, Global Social Policy

This paper subjects the much-heralded Chilean "model" of social policy reform to a critical analysis. It places the Chilean reforms within the political-economic conjuncture from which they emerged and relates the trends towards privatisation and decentralisation to the larger neoliberal movement towards societal restructuring. Through an examination of pension, education and health reforms, the paper argues that the Chilean reformulation of social policy has serious failings in terms of both pervasive structural weaknesses and a profound polarisation of service provision. These factors pose important questions regarding the propagation of similar neoliberal social policy models in the Global South. Pag e The Reformulation of Social Policy in Chile, 1973-2001: Questioning a Neoliberal Model. 1 Chile is often viewed as a trendsetter in introducing fundamental and far-reaching neoliberal reforms. This reputation has been earned through the comparatively early initiation of neoliberal restructuring in Chile and the relatively greater depth and scope of the reforms vis-à-vis other Latin American countries. Moreover, with Chile posting the highest GDP growth rates in Latin America between the late-1980s and mid-1990s, the Chilean example has been heralded as proof of the success to be gained from an uncompromising commitment to neoliberal policy prescription. Emerging from this celebration of Chilean neoliberalism, models of social policy reform closely related to the Chilean experience have been cited as ideal-type neoliberal solutions to the problems of social service provision experienced worldwide since the period of postwar capitalist expansion began to falter in the early 1970s. 2 The elevation of the Chilean reforms to model status has a fairly long history. Regarding economic policy, it began in the late 1970s and has been led by both the advocates of monetarism, located principally in US institutions and universities, and by the Chilean reformers themselves. It continues to be present, although in a more subtle form, in the discourses of the IMF and other multilateral institutions (e.g. Aninat, 2000; cf. Drake and Jaksic, 1999; Ffrench-Davis and Stallings, 2001). Turning specifically to social policy, the strongest instance of the explicit propagation of a Chilean model is the privatised pension system, which is the most widely cited "blueprint" for social security reform at a global level and the basis for the World Bank's prescription (Mesa Lago, 2002). 3 Likewise, Bruce (2000) argues that the Chilean health care reforms were also presented 1 The author would like to thank Leigh Binford, Daniel Chernilo, Simon Clarke, Susanne Soederberg and three anomynous reviewers for their insightful comments and suggestions. 2 These problems have been manifested in Latin America, as elsewhere, through tendencies towards the fiscal crisis of the state, cf. Mesa Lago, 1989. 3 For example, refer to the articles at http://www.pensionreform.org/chileanmodel.htm Pag e as a model worthy of emulation during the first wave of structural adjustment in Latin America in the 1980s. More generally, the breadth and pervasiveness of the Chilean model concept is well illustrated by a plethora of World Bank documents that point to Chilean models in such diverse realms as community Internet provision, water resource management, electricity provision, and fighting corruption in pharmaceutical purchasing. 4