Jeffrey Miron
Economic reform doesn’t usually make for a good movie, except in the case of the “Chicago Boys,” a group of UChicago-trained Chilean economists who instituted neoliberal reforms in concert with the Pinochet dictatorship.
New research examines the long-run effects of these reforms. By comparing
Chile’s economic performance with an estimate of how its economy might have developed without the reforms … [the researchers found that the] 2019 real GDP per capita was approximately $4,012 higher than it would otherwise have been, a gain of about 41 percent relative to the estimated alternative.
Some question
whether the gains reflect the outcomes of economic liberalization or the military dictatorship itself … [but the findings] suggest that the dictatorship’s establishment alone does not explain Chile’s later economic success. … The reforms also outlasted military rule: Elected governments maintained much of the economic framework after Chile returned to democracy.
The study highlights the
the importance of distinguishing economic policy from political regime: The evidence points to gains associated with liberalization, rather than demonstrating that the authoritarian government was necessary for economic success.
Cross-posted from Substack.
