Abstract
Chile's economic and political evolution after the 1982–83 financial crisis has been offered as a model for the rest of Latin America. This paper interprets the 1973 military coup, and national recovery during the 1980s and 1990s, in terms of the presence and absence, respectively, of the Hillinger (1971) paradox. The paradox arises when democratic voting on platforms consisting of several issues leads to majority support for a platform, itself consisting of issues, none of which is supported by the majority. In the early 1970s, a particular expression of the Hillinger paradox led Chile to the verge of a bloody civil war, and to a prolonged military dictatorship. In the mid 1980s, an important policy question, that of differentiated industrial protection versus free trade, was solved by a stable compromise in favour of the latter. This avoided the Hillinger paradox and eventually made electoral politics possible again.
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Chakravarty, S.P., Hojman, D.E. Voting, Collective Action, and Liberalisation in Latin America: The Rise and Fall of the Hillinger Paradox. Public Choice 101, 215–233 (1999). https://doi.org/10.1023/A:1018319919728
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DOI: https://doi.org/10.1023/A:1018319919728