Land of miracles? A critical analysis of poverty reduction strategies in Chile, 1975-2005.

Chile has been lauded as a 'miracle economy' by orthodox development thinkers given its high and virtually uninterrupted economic growth over the past three decades. The social impacts of this economic transformation are controversial; absolute poverty has been reduced considerably, while income inequality has not. This article analyses poverty trends over the last thirty years, paying particular attention to the political approaches that have underpinned alleviation strategies and how these have shifted over time. The key finding of this research is that the radical neoliberal policies and structural adjustment of the 1970s and 1980s during the Pinochet regime had severe negative effects on the poor and middle class. The transition to democracy and the adoption of neostructuralism has produced considerable reductions in absolute poverty, attributed by supporters to the Concertación governments' pro-growth economic agenda combined with progressive social policies and innovative institutional reforms enacted in the context of a conducive political environment. Notwithstanding undeniable progress, there remain significant challenges in terms of reducing relative poverty, social exclusion, isolation and vulnerability underpinned by persistently high levels of inequality, a stratified social protection system and a dual labour market. There are unresolved tensions between the market, social rights and democratic freedoms in the current Chilean model that require resolution if the social achievements of the democratic transition are to be sustained. [ABSTRACT FROM AUTHOR]