Schmidt-Hebbel, Klaus2017-08-172017-08-172009https://hdl.handle.net/10986/27939This paper analyzes the relations between leadership, the policy making process, policies and institutions, and development results in Chile. It starts with a stylized model for the dynamics of development that derives a Kuznets type relation between growth and distribution of income, determined by the quality of leadership, the policy making process, institutions, and policies. This framework is applied to Chile, identifying the features of the policy making process and leadership that allowed for continuation of growth enhancing reform, with a stronger focus on equity goals, since the transition to democracy. As a result of three decades of reforms, Chile has recorded a quantum leap in economic growth, which is traced down to specific reforms. Yet Chile's equity experience is much more mixed: poverty has declined massively but income remains highly concentrated, a likely result of shortcomings in the quality of education and in labor markets. The paper reviews the major risks to the country's future development pace and points out the main reform challenges faced by policy makers.en-USCC BY 3.0 IGOAGGREGATE INCOMEAGRICULTUREAMERICAN ECONOMIC REVIEWANNUAL GROWTHAVERAGE GROWTHAVERAGE INCOMEAVERAGE LEVELBANK REGULATIONBANKRUPTCYBINDING CONSTRAINTSBUDGET SURPLUSCAPITA GROWTHCAPITAL ACCUMULATIONCAPITAL INFLOWSCAPITAL INVESTMENTCAPITAL MARKETCASE STUDIESCENTRAL BANKCENTRAL BANK INDEPENDENCECENTRAL BANKSCIVIL LIBERTIESCLOSED ECONOMYCOLLECTIVE BARGAININGCOMMODITYCOMMODITY EXPORTSCOMPARATIVE ADVANTAGECOMPETITIVENESSCOMPLEMENTARITIESCOMPLEMENTARITYCORPORATE TAXCOUNTRY CASECOUNTRY RISKCREDIT INSTITUTIONSCRISESCRITICAL MASSDEMOCRACYDEVALUATIONDEVELOPED COUNTRIESDEVELOPING COUNTRIESDEVELOPING ECONOMIESDEVELOPMENT CASESDEVELOPMENT ECONOMICSDEVELOPMENT INDICATORSDEVELOPMENT PATHDEVELOPMENT PATHSDEVELOPMENT PRACTITIONERSDISTRIBUTION DATADISTRIBUTION OF INCOMEECONOMIC ACTIVITYECONOMIC CRISESECONOMIC CRISISECONOMIC DECISIONSECONOMIC DEVELOPMENTECONOMIC GROWTHECONOMIC OUTCOMESECONOMIC POLICIESECONOMIC REFORMSECONOMIC RESEARCHECONOMIC SPHEREECONOMICSECONOMICS LITERATUREEMPIRICAL ESTIMATESEMPIRICAL EVIDENCEEMPIRICAL WORKEQUILIBRIUMEXCHANGE RATESEXPORTSEXTERNAL SHOCKSEXTREME POVERTYFACTORS OF PRODUCTIONFEMALE LABORFEMALE LABOR FORCEFINANCIAL LIBERALIZATIONFINANCIAL REFORMSFINANCIAL RETURNSFISCAL POLICIESFISCAL POLICYFORECASTSFOREIGN DIRECT INVESTMENTFUTURE GROWTHGDPGDP PER CAPITAGINI COEFFICIENTGOVERNMENT INSTITUTIONSGOVERNMENT REGULATIONGOVERNMENT SPENDINGGROWTH DECLINEGROWTH DETERMINANTSGROWTH EQUATIONGROWTH PERFORMANCEGROWTH POLICIESGROWTH PROJECTIONSGROWTH RATEGROWTH REGRESSIONSGROWTH VOLATILITYHIGH CONCENTRATIONHIGH GROWTHHIGH INCOMEHUMAN CAPITALHUMAN RIGHTSIMPORT TARIFFSINCENTIVE STRUCTUREINCOMEINCOME DISTRIBUTIONINCOME GROWTHINCOME INEQUALITYINCOME LEVELSINDUSTRIAL COUNTRIESINDUSTRIALIZED COUNTRIESINFLATIONINFLATION RATEINFLATION TARGETINFLATION TARGETINGINNOVATIONINSTITUTIONAL DEVELOPMENTINSURANCEINTERACTION EFFECTSINTERNATIONAL FINANCEINTERNATIONAL ORGANIZATIONSINTERNATIONAL TRADELABOR FORCE PARTICIPATIONLABOR MARKETLABOR MARKETSLEGAL SYSTEMLEVEL OF DEVELOPMENTLEVEL OF INCOMELOW INCOMELOW UNEMPLOYMENTMACROECONOMIC INSTABILITYMACROECONOMIC MANAGEMENTMACROECONOMIC PERFORMANCEMACROECONOMIC POLICYMACROECONOMIC STABILITYMACROECONOMIC STABILIZATIONMACROECONOMICSMONETARY POLICYMULTIPLE EQUILIBRIANATURAL MONOPOLIESNEGATIVE EFFECTOPPORTUNITY SETORGANIZATIONAL STRUCTUREOUTPUTOVERVALUATIONPENSIONPENSION REFORMPENSION SYSTEMPENSION SYSTEMSPENSIONSPER CAPITA GROWTHPER CAPITA INCOMEPER CAPITA INCOME LEVELSPOLICY CHANGESPOLICY DETERMINANTSPOLICY MAKERSPOLICY PACKAGESPOLICY REFORMSPOLITICAL ECONOMYPOLITICAL INSTITUTIONSPOLITICAL PARTICIPATIONPOLITICAL REGIMEPOLITICAL STABILITYPOPULATION SHAREPORTFOLIOPORTFOLIO INVESTMENTPOSITIVE ECONOMICSPOVERTY ALLEVIATIONPOVERTY LEVELSPOVERTY REDUCTIONPRICE CONTROLSPRIVATE MARKETSPRIVATE SECTORPRIVATIZATIONREAL EXCHANGE RATEREDUCING POVERTYREFORM EFFORTSREFORM PROGRAMSRELATIVE INCOMERELATIVE INCOME DISTRIBUTIONREPUTATIONRISK PREMIUMSCANDALSSECTOR REFORMSSIGNIFICANT REDUCTIONSOCIAL CAPITALSOCIAL NORMSSOCIAL ORGANIZATIONSSTABILIZATION POLICIESSTAGNATIONSTANDARD DEVIATIONSTRUCTURAL POLICIESSUSTAINABLE REFORMSTAXTAX CODESTAX RATETAX SYSTEMTOTAL FACTOR PRODUCTIVITYTRADE LIBERALIZATIONTRADE OPENNESSTRADE UNIONSTRANSPARENCYUNDERDEVELOPMENTUNEMPLOYMENTUNEMPLOYMENT BENEFITSUNEMPLOYMENT RATESUNSKILLED LABORVIRTUOUS CYCLEWAGESWEALTHWEALTH DISTRIBUTIONWELFARE IMPACTWORLD ECONOMYWORLD INCOME DISTRIBUTIONWorking PaperWorld Bank10.1596/27939