Distinguished Lectures

Chiles's Success Story

Publication Number: ECES-DLS2-E

June, 1996

Author : Hernan Büchi

Type : Distinguished Lectures

When the military took control in Chile in 1973, the economy was in ruins, and roughly 20 percent of the population was living in extreme poverty. Since then, a rigorous reform program has been adopted, ultimately surviving the debt crisis of 1982 and a change to democracy in 1989, and bearing results that are the envy of the developing world. Besides achieving an average growth rate of about 7 percent annually for half a generation, Chile significantly reduced poverty through innovative social programs. Viewed by many as the star of Latin America, Chile's experience holds important lessons for other countries. Hernan Buchi, one of the major forces behind Chile's sweeping transformation, argues that reform is like a jigsaw puzzle, because it is important to put enough pieces correctly in place in order to get results. Buchi looks first at basic reform ingredients, then assesses the strengths and shortcomings of reforms in several Latin American economies, and finally focuses on Chile's reform program. In his presentation and the discussion that followed, Buchi provided a non-technical survey of the "similarities between countries with respect to the problems that have to be faced and the decisions that should be made."