ABSTRACT
This chapter looks at two main issues: the meaning of deindustrialization and the relationship between the changes in productive efficiency and deindustrialization. It analyzes how these issues relate to the Chilean case. The chapter describes the economic policies that were applied in Chile from 1974 to 1982 and the process of resource reallocation that was generated by these policies. One theoretical issue relates to the meaning of deindustrialization and the conditions under which it can be understood as a structural "mal-adjustment" of the economy. This point is especially relevant for a small developing country like Chile, which was put through a rapid-fire combination of policy measures that drastically changed the structure and functioning of its economy. The extent to which deindustrialization can be understood as a structural maladjustment of the economy has also been analyzed from an open economy perspective. The cases of loss of employment in the industrial sector as a result of deindustrialization are particularly enlightening.
