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ON NOVEMBER 18, 1996, Chile and Canada signed a free trade agreement in Ottawa, Canada. After growing 8.5 percent in 1995, Chilean total output grew at about 7.0 percent in 1996. Economic institutionality under President Eduardo Frei is in harmony with the successful framework created during Gen. Pinochet’s presidency and reinforced during the democratic rule of President Aylwin. Political, social and economic freedoms are increasingly enjoyed within the post-Pinochet democratic regime. Environmental issues are receiving increased, but nevertheless inadequate, attention.
Chilean average per capita income in 1993, measured in purchasing power parity (PPP) dollars, was $8,400, compared to $24,240 for the US in the same year. Per capita income of the poorest 20 percent of households was (PPP) $1,386 in Chile, compared to $5,814 in the US. A profound, largely non-polemic, constructive debate is permeating Chile regarding implementing fundamental strategies for accelerating growth, reducing poverty and inequality, and ultimately, permitting Chile to compete as a developed nation. However, the promising research in this area remains largely incomplete.
Most issues and dimensions of the Chilean economy have been rigorously reviewed and analyzed. The quantity and quality of studies examining such topics as privatization, the social security system, agriculture, industry, mining, education, banking, trade relationships, education and the nonprofit sector are impressive. Macro and micro studies abound. Mesoanalysis of groups and sectors remains limited, if not inadequate.
Although well-researched studies of the relative distribution of private income and consumption and a few focusing on the relative distribution of semipublic (intermediate) consumption and income exist, overall there are major gaps in the knowledge of the nature, causes and cures of inequality and poverty. More research is necessary for understanding the distribution of income among classes (labor and capital), sectors, regions, by gender, and within the labor and property income groups. The relationship between various dimensions of inequality of distribution and poverty on the one hand, and output growth and welfare on the other hand requires attention. Improved statistics on poverty, distribution and inequality are also needed.
All studies reviewed in this section make important contributions to our understanding of the historical evolution of the Chilean economy. The following works stand out in terms of their singular quality: 1) Juan Gabriel Valdes examines the profound impact of the Chicago School on Chile during the Pinochet presidency and beyond (item bi 95021785); 2) Hojman studies education, health, labor markets, foreign trade, and savings and investments (item bi 95007272); 3) Foxley discusses causes of President Aylwin’s successful democratic government (item bi 95000069); 4) MIDEPLAN, guided by Sergio Molina, describes Aylwin’s strategy of growth with equity (item bi 95007482); and 5) CIEDESS provides a comprehensive study of the Chilean social security system (item bi 95007522).