ABSTRACT
One of the most radical neoliberal reforms devised and implemented in Chile under the military regime led by General Augusto Pinochet (1973 to 1990) was the major revision of the Water Code in 1981. This legal and policy process was introduced in Chapter 2 of this book. Designed according to free market principles embraced by the ‘Chicago Boys’ – a group of Chilean economists who studied at the University of Chicago – the result was an extremely neoliberal water law, which introduced a system of private water rights that could be freely traded with almost no government regulation. In Chile, rights to use all surface and groundwater resources are defined as property rights, and the Water Code applies to all uses, including agriculture, drinking water supply, industry, mining and hydroelectric power. Furthermore, the Chilean Water Code has also become significant internationally for its application of neoliberal principles to water management to an unprecedented extent (e.g. Simpson and Ringskog, 1998). These principles corresponded to the free market reforms that were aggressively promoted by multilateral financial institutions (especially the World Bank) to governments of indebted low- and middle-income countries under structural adjustment programmes since the 1980s. In line with the influential 1992 Dublin Principles, water-sector reforms urged during the 1990s included privatization of urban water utilities and the use of water markets to increase the efficient usage of water resources (e.g. Budds and McGranahan, 2003).
