Political Institutions, Policymaking Processes and Policy Outcomes in Chile

Joaquín Vial, Cristobal Aninat, John Landregan and Patricio Navia

No 3222, Research Department Publications from Inter-American Development Bank, Research Department

Abstract: This analysis characterizes the salient features of the policymaking process (PMP) in Chile. It emphasizes the influence of political institutions on the PMP and examines the linkage between policymaking and policy outcomes in Chile. The salient features of the Chilean PMP are the electoral system and the associated party system, characterized by two long-lived coalitions, a powerful Executive, with de facto control over the agenda, a relatively independent judiciary, a bureaucracy that is relatively free from corruption even by the standards of the OECD, and a series of veto points in the policymaking process that permit adversely affected actors to block policy change. Consistent with the theoretical framework of Spiller and Tommasi (2003), the small number of actors who interact repeatedly and the predictability of policy implementation and of law enforcement lead to a policymaking process in which transaction costs are low and inter-temporal political exchanges are credible. The veto players help to give inter-temporal exchanges their credibility, but they can also block reforms. Looking at policy areas in cross section, we find that policy areas in which policymakers` interests are more nearly aligned, and in which there is more rapid exogenous change, are associated with more successful efforts at reform, while in areas in which the interests of the Executive and the various veto players diverge, policy tends to stagnate.

Date: 2006-02
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Working Paper: Political Institutions, Policymaking Processes and Policy Outcomes in Chile (2006)
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