Democratic Chile: The Politics and Policies of a Historic Coalition
Kirsten Sehnbruchand
Peter Siavelis
11th February, 2013
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Table of Content, Part 1Politics and Policymaking • From a Necessary to Permanent Coalition,
Peter M. Siavelis• The Alianza’s Quest to Win Power Democratically
Patricio Navia and Oscar Godoy• Democratizing Chile through Constitutional Reforms
Claudio Fuentes• The Military and Twenty Years of the Concertación
Greg Weeks• Political Reform and Gender Equality
Merike Blofield and Liesl Haas • Human Rights under the Concertación
Cath Collins
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Table of Content, Part 2Economics and Social Development• Economic Policy and the Ideology of Stability
Oscar Landerretche• Fiscal Policy: Promoting Faustian Growth?
Ramón López• Reducing Poverty: Real or Rhetorical Success?
Silvia Borzutzky, Claudia Sanhueza and Kirsten Sehnbruch• Social Policies: From Social Debt to Welfare State?
Dante Contreras and Kirsten Sehnbruch• A Precarious Labor Market
Kirsten Sehnbruch• Education: Freedom of Choice or Enterprise?
Gregory Elacqua and Pablo González• Conclusion: The Future of the Rainbow Coalition
Peter M. Siavelis and Kirsten Sehnbruch
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A view from futureInterpretations of History• Given political constraints, to what extent did
Concertacion governments achieve what was possible?
• How was Chile transformed politically, socially and economically during the four Concertación governments?
• How did the coalition maintain itself in power for twenty years?
• Is the Concertación indeed a political and economic "model"?
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From authoritarian to transitional enclaves• A consensus model of politics established by
the transition• But the authoritarian enclaves became
transitional enclaves• In each area of government, there is a
(different) transition point when this occurred • A permanent interplay of political constraints
on development and vice versa
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The Pinera Government
• The transitional enclaves are no longer associated just with the Concertacion: the Alianza had to operate under them, too
• The Alianza has not attempted to institute policies that it has advocated for 20 years or implemented policies it had advocated against: eg. labour reform, “asistencialismo”, increase in taxes, regulation of education, etc.
Nicknamed 5th government of the Concertacion
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Distinguishing comparative democratic features• Authoritarian and transitional enclaves• Elite domination: more extensive power
concentrated in hands of elites that are more entrenched than elsewhere
• A remarkably homogeneous intellectual elite: Washington Consensus vs neoliberalism
Disillusion with politics, declining political participation, loss of “mistica” or “proyecto pais”, which makes formulating an alternative development model problematic
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Transitional Enclaves
• Binomial election system and constitutional enclaves
• Informal political institutions• Cuoteo, elite control of candidate selection
and electoral politics • Party dominated politics• Elitist and extra-institutional policy-making• Untouchability of the economic model
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The Fault Lines of the Concetacion
• Parties (PS & PPD vs PDC)• Technocrats vs “the Left” (which never had a
strong technocratic base)• Business interests vs “the Left”• Traditional transitionists vs “latecomers”• Intra-generational differences
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Unintended Consequences• Social security dilemma• Productivity dilemma• Inequality dilemma• Some “neoliberal” reforms have taken on a life of their
own: natural resource dependency, environmental degradation, LM flexibilisation, privatisation and the business of education, etc.
• A failure to shift from quantity to quality• Growth sustainability dilemma A failure to close the development gap
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Chapter contents
• Each chapter analyses Concertacion policies on a particular subject from the perspective of a research question
• We have attempted to combine political and development analysis throughout
• Each chapter relates to the transitional enclaves argument and identifies its respective “transition point”
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Myths of the Model• A neoliberal economic model• The Concertacion successfully lowered poverty rates thanks
to its social spending efforts• The Concertacion invested in paying off the “social debt”
inherited by the dictatorship• “flagship” social programmes of each Concertacion
government illustrate their commitment to social equity (eg. Chile Joven, Chile Barrio, Chile Solididario, Chile Crece Contigo)
• Labour market problems will be resolved through growth• Social programmes (later universal benefits) can
compensate for labour market weaknesses
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The Economic Model (Oscar Landerretche)• Imperative of stabilisation turned into an ideology:
exhausted from utopian experiments • Economic stability was seen as redistributive• Model was not neoliberal in the macroecon sense: soft
landing during 1990s, Keynesian anti-cyclical spending, financial market stability
• Irony: model was more neoliberal in other policy areas, esp social policies
• “Redefinition” of economic model through pressure from the Left…discolos
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Problems with the Model• One of the world’s most open economies but
unable to diversify its exports sufficiently• Chile has not closed the development gap despite
being the best economic performer in LA: 1960: 23% of US GDP in PPP, 32% in 2012, 38% in 2020
• Dutch disease• Failure to close inequality gaps on all levels
(income, health, employment, less so education and housing)
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Poverty and Income Distribution
Table 10.1: Poverty Rates and Income Distribution, 1990 - 2009
Poverty Rate, %
Extreme Poverty Rate, %
Poverty Rate without Fiscal
Subsidies, %
Extreme Poverty Rate
without Fiscal
Subsidies, %
Social Expenditure
as a % of GDP
Poverty Rate based on 60% of
Median Income, %
Gini
Coeff.
1990 38.6 13.0 39.4 14.2 11.9 27.9 0.57 1992 32.9 9.0 33.8 10.2 12.2 27.9 0.56 1994 27.6 7.6 28.5 8.7 12.5 28.5 0.57 1996 23.2 5.8 24.8 7.1 12.8 28.7 0.57 1998 21.7 5.6 23.5 7.1 13.7 28.6 0.58 2000 20.2 5.6 21.8 6.6 15.0 28.9 0.58 2003 18.7 4.7 20.6 6.1 14.4 27.7 0.57 2006 13.7 3.2 15.8 4.5 12.1 26.4 0.54 2009 15.1 3.7 19.3 6.3 16.5 25.4 0.55
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Reality beyond the Rhetoric• Economic growth, not social policies lowered
poverty, but not as much as in other countries• Social investment has not been significant enough to
redistribute• Multidimensional poverty: investment in health,
housing and education has paid off. LMs are still very problematic
• A focus on absolute poverty rates has led to complete neglect of income distribution, which was considered less important
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Chilean Labour Market Problems• Informality and precarious employment conditions in the
formal sector • High job rotation, sub-contracting, multiple tax IDs,
Freelance contracts for salaried workers, etc.• Labour market segmentation with little mobility (esp for
older workers)• Antiquated legislation that segments labour market
further (esp. severance pay)• Labour reform stalled since Pres Aylwin• Weak unions, unconstructive in development process
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Employment Duration
Type of Contract, % of total contributors 0-13 m
+13 m - 2 yrs
+ 2 - 3 yrs
+3 - 4 yrs
+4 - 5 yrs
+5 - 6 yrs
+6 - 7 yrs Total
Per centages of total workforce Open-ended contracts 19.8 10.0 7.5 5.4 4.2 3.4 3.0 53.3 Atypical contracts 38.6 5.1 1.7 0.6 0.3 0.2 0.1 46.7 Total labour force 58.4 15.1 9.2 6.1 4.5 3.6 3.2 100.0
Vertical Per centages, by duration of employment Open-ended contracts 33.9 66.2 81.5 88.5 93.3 94.4 93.8 53.3 Atypical contracts 66.1 33.8 18.5 9.8 6.7 5.6 3.1 46.7 Total labour force 100.0 100.0 100.0 98.4 100.0 100.0 96.9 100.0
Horizontal Per centages, by type of contract Open-ended contracts 37.1 18.8 14.1 10.1 7.9 6.4 5.6 100.0 Atypical contracts 82.7 10.9 3.6 1.3 0.6 0.4 0.2 99.8 Total labour force 58.4 15.1 9.2 6.1 4.5 3.6 3.2 100.1
Source: Superintendencia de AFP .
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Social Security• Objective: pay “social debt” and shift towards universal
entitlements ….and by implication lay foundation for a welfare state (“sistema de proteccion social”)
• With low fiscal revenues • Little political will to undertake structural reform (“Fondos
Solidarios”)• A tendency to institute elaborate programmes with minimal
funding• Focus on coverage (quantity) not quality• Existing social benefits cannot compensate for deficiencies in
employment conditions Rhetoric has been more successful than fact
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Transition points: Lagos presidency failed to take advantage of his statemanship• Lagos felt restricted by being the first socialist president of the
Concertacion, cautious by nature:• Auge negotiation under Lagos• Lagos was a “big picture” president without a political mayority,
view to future history of his presidency• Management of economic crisis missed opportunity for anti-
cyclical spending• Lagos pushed back against political constraints, but probably not
hard enough from hindsight• Intellectual exhaustion of Concertacion set in + alienation of PDC
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Transition points: Bachelet presidency
• First political majority• Constrained by being the first female president• An attempt to break out of politics as usual: gender parity, gobierno
ciudadano, new faces, but no big push for pol. reform• Illustrates strength of status quo; by 2007 Bachelet government
ressembled previous ones• Social protection rhetoric constructed after the fact, not presented
as an alternative: “next step” policy
• Management of crisis broke economic molds • Lack of genuinely new political ideas and “mistica”• Concertacion exhaustion and fragmentation
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Political Conclusions• Normalization of politics typical of post-
transitional societies• But entrenched elites continue to shape
politics: no significant push for strengthening of democracy
• Contradictory normalisation: elites vs citizens• Disenchantment of electorate with politics• Transitional enclaves became accepted as
“normal” until students demonstrated
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DevelopmentConclusions• Gradualist approach to change and
development• No big ideas, no development strategy after
2000, no risky political decisions• Gradual increase in concern over sustainability
of the economic model among the centre-left• Student protests put new issues on the
agenda