Search

This paper uses the 1996-2001 National Socioeconomic Survey panel database to analyse poverty dynamics in Chile, drawing a distinction between chronic and transient poverty. We found that while 20 per cent of the population was living below the official poverty line both in 1996 and 2001, only 9 per cent of the population was poor at both dates. We also found that when the poverty line was raised, the amount of households which could be considered chronically poor rose steadily, whereas the transitory component of poverty remained more or less stable. Analysis of the direct reasons for changes in household poverty status leads us to the conclusion that labour dynamics are far more relevant than demographic changes. Household heads who suffered health problems are significantly less likely to leave poverty. Household human and physical capital are also relevant, as well as the sector in which the household head works. Simulating this exercise using different poverty lines reveals that some variables are not robust to changes in the definition of poverty, while others which originally appeared to be insignificant become so for most other possible poverty lines. [ABSTRACT FROM AUTHOR]

The 2003 US-Chile free trade agreement, regarded by many as consistent with Chile's long-held trade liberalisation strategy, nonetheless engendered a surprisingly vigorous debate focused on the proposed elimination of the bandas de precio protecting traditional agricultural crops. Opposition to the agreement, mounted by the conservative Alianza por Chile, offers an intriguing political case study that suggests that populist posturing surrounding free trade agreements may persist long after a trade liberalisation strategy has become well-established. This article argues that agricultural liberalisation will be a significant challenge for Chile's governing coalition if it wishes to pursue trade negotiations while seeking to avoid costly political battles at home over the economic costs of abandoning price supports and the challenges of `reconverting' to an export-oriented sector. Even given the strong elite consensus around trade liberalisation in Chile, the interconnections between sectoral interest groups, domestic politics and trade negotiations remain relevant, and deserving of analytical attention. [ABSTRACT FROM AUTHOR]

After reviewing progress in Latin America's economic stabilization and international competitiveness in the last two decades, this essay discusses the current post-Washington Consensus "social democratic convergence" agenda, which aims to sharpen market efficiency, improve the quality of democratic governance, and advance equity goals by attacking the social deficit. Two illustrative examples, at opposite ends of the development spectrum, are Nicaragua's pro-CAFTA agenda and Chile's Chile Compete program. More generally, pluralistic democracy can hamper progress by giving veto powers to recalcitrant vested interests; but enlightened political leadership can make gains by combining carefully crafted coalitions, international support, popular pressures, and an attractive ideological message. [ABSTRACT FROM AUTHOR]