Conclusions and Policy Implications

Abstract

I. Chile is virtually a laboratory case of market liberalization based on neoclassical principles. Since 1974, and for almost two decades, it has also been the most thorough and continuous application of neoclassical trade strategy, supposed, by its proponents, to lead to rapid economic growth, higher economic efficiency, labour-intensive industry and export dynamism.¹ The government abstained from policy intervention and, with some differences from year to year, adhered to what the World Bank later defined a ‘market-friendly’ development strategy. This consists of a government confined to ensure macroeconomic stability, openness to international trade, a competitive climate for private enterprises, and investments in education and human capital (World Bank, 1991). This approach has been prescribed by the World Bank to most developing countries, and the concept was used to depict the successful experiences of the East Asian Tigers (World Bank, 1993). For this reason, the analysis conducted in this book may provide insightful generalizations for both theory and policy purposes.