Chile Is a Victim of Its Own Success

For more than two weeks, protesters have thronged the streets of Chile’s major cities. Initially angry over a rise in train fares, the protesters have remained in the streets to rail against inequality, poverty and corruption. This might lead many casual news readers to conclude that Chile is one more broken emerging-market country, mired in economic stagnation and authoritarian rule. The opposite is true: Chile has been one of the developing world’s biggest success stories.

From 1973 to 1990, Chile was ruled by the right-wing military dictator Augusto Pinochet. Though hardcore free-marketers applauded his laissez-faire policies, Pinochet’s economic record was fairly underwhelming. The dictator encouraged a real estate bubble that went bust and took the economy with it, and his fiscal austerity made the slump worse. But in the years since democracy was restored in 1990, the country has enjoyed a long run of steady growth. It has not only outpaced its Latin American neighbors, but has closed a little of the gap with the U.S. as well: