In Chilean Economic Development under Neoliberalism, Andrés Solimano and Gabriela Zapata-Román set out ‘to examine the economic, social, and development policies applied in Chile and their outcomes in the past six decades, with an emphasis on the long cycle of the neoliberal model built around market deregulation, privatization, and a minimal state’ (p. 1).
Part of the Cambridge Elements series, this concise volume offers a compact yet rigorous overview of Chile’s political economy over the long run, with particular attention to the neoliberal period inaugurated in the late 1970s. Combining historical and economic perspectives, the authors identify enduring patterns in Chile’s development trajectory while seeking to provide a more ‘balanced’ account of its recent economic performance. The volume comprises an introduction and a conclusion and four substantive chapters on Chilean developmental models (chapter 2), structural transformation, financialisation and deindustrialisation (chapter 3), on macroeconomic management of inflation and Inequality and Growth (chapter 4) and on social policies (chapter 5).
The book’s principal strength lies in its careful synthesis of empirical evidence. Solimano and Zapata-Román acknowledge the widely noted achievements of the Chilean model, including macroeconomic stabilisation, inflation control, reductions in poverty, and the consolidation of fiscal discipline and central bank independence. At the same time, they offer a systematic assessment of its structural limitations, foremost among them the persistence of extreme economic inequality. Drawing on data from sources such as the World Inequality Database, the authors document the exceptional concentration of wealth in Chile, where both income and wealth inequality rank among the highest in Latin America and globally.
In this respect, the book reinforces an argument that has gained increasing prominence in the literature in the past few decades: that Chile’s so-called development or ‘miracle’ was remarkably fragile and even something of a mirage. The authors effectively illustrate how processes such as financialisation and deindustrialisation (chapter 3) have shaped Chile’s development path, contributing to a pattern of growth marked by structural imbalances and social disparities. The authors also highlight a particularly striking and relatively under-reported piece of evidence concerning inequality. Drawing on World Inequality Database estimates, they note that ‘in 2017, the wealth Gini index for Chile was 0.911, more than double the income Gini estimated by the Chilean Ministry of Social Development, the highest in Latin America, and 0.46 points above the regional average for income’ (p. 62). This finding is reinforced by their observation that ‘the share of wealth held by the richest 1 per cent is also the highest in Latin America and among the highest globally, approaching 50 per cent of total wealth in 2021’ (p. 62).
While the empirical contribution is strong, the analysis would at times benefit from a more explicit theoretical framing. While this does not necessarily diminish the contribution of a work of this kind, which is aimed at a broader audience, the book is at times overly descriptive. This is particularly evident in three different instances.
First, in the discussion of Chile’s structural position in the global economy. Chile is presented as a country with a small domestic market which, unlike Brazil, Argentina and Mexico, ‘did not allow for effective development of capital-intensive industries such as the automotive and heavy machinery industries’ (p. 3). In this regard, the authors draw on Ricardo Ffrench-Davis to characterise Chile as a capital-scarce economy. While this is analytically accurate, it leaves the country’s position within the global production system underexplored. The issue is not simply one of a limited domestic market size constraining the development of higher value-added industries. Chile also occupies a structurally defined role within the international division of labour as a supplier of primary commodities, a position that more advanced economies have a material interest in preserving. This pattern, widely observed across the Global South, is associated with forms of subordinated industrialisation that tend to reinforce existing global hierarchies, particularly in contexts where technological capabilities and intellectual property remain concentrated in the Global North.
A similar limitation arises in the treatment of neoliberal reform. The authors outline the policy agenda associated with the ‘Chicago Boys’ – including trade liberalisation, privatisation, deregulation and macroeconomic stabilisation – but offer a relatively limited interpretation of its underlying dynamics. The authors state that ‘[Chicago Boys’] agenda called for abolishing price controls, privatizing state enterprises, deregulating markets, reducing import tariffs to boost exports and cheapen imports, reducing the inflation rate by establishing macroeconomic discipline …’ (p. 17). This is empirically accurate, but it is worth asking what authors interpret about these policies, as the analytical framing remains somewhat implicit. One possible avenue would be to situate the reforms within established Marxist critical political economy perspectives. From a more politically oriented standpoint, the neoliberal programme has been understood as a project aimed at restoring class power to sectors whose position had been challenged by post-war social-democratic arrangements. From a more explicitly economic perspective, grounded in the labour theory of value, policies such as shock stabilisation, the weakening of organised labour, the commodification of social provision, the privatisation of public enterprises and trade liberalisation may be interpreted as mechanisms counteracting the falling rate of profit. Greater engagement with such frameworks would have clarified the analytical interpretation of the reforms discussed.
Finally, the discussion of labour market outcomes (chapter 5) also raises questions that remain only partially addressed. While the authors document empirically high levels of labour market flexibility, precarious employment, low wages, high turnover rates and weak collective bargaining institutions (p. 74), the mechanisms underpinning these patterns are not elaborated. In other words, the crucial question of ‘Why is this the case?’ remains unexplored. A more explicit analysis of how labour market institutions interact with broader dynamics of capital accumulation and social stratification would have strengthened this section. Poor labour conditions, alongside underemployment, unemployment and weak institutional protections, can be understood as mechanisms that both exclude segments of the population from stable access to livelihoods and exert downward pressure on wages. In this sense, they play a central role in regulating the price of labour within capitalist economies, particularly in peripheral contexts. However, the analysis stops short of engaging with underlying dynamics that might account for these patterns, notably the role of economic exploitation in structuring class relations and inequality. Existing evidence suggests that this dimension is especially pronounced in Chile, as reflected, for instance, in the significant share of labour time appropriated as profits relative to that returned in wages.
These observations, however, should be read in light of the format and aims of the Cambridge Elements series, which prioritises accessibility and concision. Within these constraints, Chilean Economic Development under Neoliberalism succeeds in offering a clear, well-documented and analytically suggestive account of Chile’s recent economic history. It provides a valuable point of entry for readers seeking to understand both the achievements and the contradictions of neoliberal development in Latin America.
