Abstract
The Chilean policy experience in the period following the fall of Allende in September 1973 has been the subject of much controversy, with views ranging from the unqualified defense of the policies applied to their wholesale rejection. The controversy has pertained to the interpretation of the evidence and to the empirical evidence itself. At the same time, there has been a tendency to evaluate the Chilean experience independently of the international context and to consider the entire period as a unit.
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Notes
T. Jeanneret, ‘The Structure of Protection in Chile’, in B. Balassa et al. The Structure of Protection in Developing Countries (Baltimore, Md.: Johns Hopkins University Press, 1971) pp. 146–58.
J. Behrman, Foreign Trade Regimes and Economic Development (New York: National Bureau of Economic Research, 1976), pp. 85–94.
R. Ffrench-Davis, ‘Exchange Rate Policies in Chile: The Experience with the Crawling Peg’, in J. Williamson (ed.), Exchange Rate Rules (London: Macmillan, 1979) p. 162.
B. Balassa et al. Development Strategies in Semi-Industrial Economies (Baltimore, Md.: Johns Hopkins University Press, 1982) pp. 45, 52.
B. Balassa, ‘The Newly Industrializing Developing Countries after the Oil Crisis’, Weltwirtschaftliches Archiv, CXVII (1981) 142–95. Reprinted in
B. Balassa, The Newly Industrializing Countries in the World Economy (New York: Pergamon Press, 1981) pp. 29–81. The newly-industrializing countries were defined to include countries that had per capita incomes between $1100 and $3000 in 1978 and where the share of the manufacturing sector in the gross domestic product was 20 percent or higher in 1977. The countries in question are Argentina, Brazil, Chile, Mexico, Uruguay, Portugal, Spain, Yugoslavia, Israel, Hong Kong, Korea, Singapore, and Taiwan.
B. Balassa, ‘Tariff Reform in Chile’, in B. Balassa, Policy Reform in Developing Countries (Oxford: Pergamon Press, 1977) pp. 70–2.
Ffrench-Davis, ‘Import Liberalization.’ These conclusions are confirmed by more recent data reported in S. Edwards, ‘Economic Policy and the Record of Economic Growth in Chile: 1973–1982’, in G. M. Walton (ed.), The National Economic Policies of Chile (Greenwich, Conn.: JAI Press, 1984).
McKinnon and Sjaastad also criticized these wage adjustments, with Sjaastad arguing that ‘Chile’s wage policy really constitutes a second (and superfluous) numeraire (the first being the exchange rate)…’; L. A. Sjaastad, ‘Failure of Economic Liberalism in the Cone of Latin America’, The World Economy, VI (1983) p. 16. Carrying this argument to its logical conclusion would call for stopping wage indexation rather than establishing a fixed exchange rate as the absence of wage indexation would equally affect the prices of traded and non-traded goods and would not give incentives for an excessive inflow of foreign capital by providing a virtual exchange rate guarantee.
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© 1985 The World Bank and Bela Balassa
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Balassa, B. (1985). Policy Experiments in Chile, 1973–83. In: Change and Challenge in the World Economy. Palgrave Macmillan, London. https://doi.org/10.1007/978-1-349-17991-6_8
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DOI: https://doi.org/10.1007/978-1-349-17991-6_8
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