chapter  2
26 Pages

Social Policy Retrenchment Under Military Rule in Chile, 1973-1990

INTRODUCTION Until 1973, Chile was considered a pioneer Latin American country in terms of social policy as it developed one of the most generous, universalistic systems on the continent (Mesa Lago 1994: 115; Raczynski 1994: 1). As Kurtz has argued, until 1973 "a substantial welfare state emerged and aimed at universalism on the consumption side of social citizenship (health, pensions, income); it utilized national planning and eventually asset redistribution to achieve poverty abatement on the production side" (Kurtz 2002: 294). Yet the military government that ruled Chile from 1973 to 1990 replaced the old universalistic scheme with a market-oriented system that strengthened means tested policies,2 transferred important responsibilities to the private sector, curtailed benefits, tightened eligibility rules, and significantly reduced the state's participation in social policy provision and administration. Scholars and policy makers have cited both the extreme budget deficit before these reforms and the authoritarian regime itself as factors behind Chile's dramatic shrinking of social protection. Such an account, however, fails to explain why other authoritarian regimes facing budgetary crises (for example, Argentina and Uruguay) did not also pursue radical social policy reforms. While retrenchment took place in all social policy areas, reforms were less radical in some policy areas than in others. Specifically, the retreat in health care was less radical than in education and pensions. This is not to say that the health care reform was moderate. Indeed, this was undoubtedly the most virulent health care reform in Chilean history. Yet compared with changes in other social sectors, retrenchment in health appears less thorough.