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After Neoliberalism?The Left and Economic Reforms in Latin America$

Gustavo A. Flores-Macias

Print publication date: 2012

Print ISBN-13: 9780199891658

Published to Oxford Scholarship Online: May 2012

DOI: 10.1093/acprof:oso/9780199891658.001.0001

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Highly Institutionalized Party System

Highly Institutionalized Party System

Chile’s Pro-Market Continuity

(p.150) 6 Highly Institutionalized Party System
After Neoliberalism?

Gustavo Flores-Macías

Oxford University Press

Abstract and Keywords

Chapter 6 argues that the highly institutionalized party system was crucial in accounting for the pro-market economic policies of Ricardo Lagos’s leftist government in Chile. It finds that moderate reforms in that country are the consequence of both the temperance instilled in the candidates through the process of accommodation and consensus-building in party politics, as well as the ability of the different forces represented in Congress to shape and moderate economic policy. Drawing on evidence from such initiatives as labor and tax reforms, this chapter shows how these proposed changes were watered down to be acceptable to a working majority in the legislature. Furthermore, Chile’s solid economic performance and deep neoliberal reforms discouraged any drastic changes to the model inherited from the military dictatorship. Other factors, including executive powers, natural resources, and organized labor do not play a significant role in explaining Chile’s general adherence to pro-market policies.

Keywords:   Chile, Ricardo Lagos, party system, economic reforms, labor reform, tax reform, depth of neoliberalism, economic conditions, market orthodoxy, consensus-building, dictatorship

“We had to be very realistic about the limits imposed by the institutional legacy of the dictatorship and the need to maintain cohesion among the different parties in government. Without a doubt, the pace of the Concertación’s economic reforms has been slowed down by the need to find consensus among the country’s political forces, both from the left and the right.”1 This is how Senator Carlos Ominami, former minister of the economy, chairman of the Senate Public Finance Committee, and vice president of the Socialist Party, characterized the role of the party system in shaping the Concertación’s economic policies.

His words are a reminder that, even though Chile has become a poster child for successful economic orthodoxy in Latin America, the Concertación’s economic policies were a product of accommodation and reconciliation of competing views across the political spectrum. In the Chilean system, competing views have been reconciled not just between the government and the opposition, but also among the “many souls” of the government coalition.2 Although none of these souls advocated dramatic statist transformations—for reasons discussed in this chapter—the centripetal forces characteristic of Chile’s institutionalized party system have functioned as a moderator for economic policy changes.

(p.151) In this chapter I argue that Chile’s highly institutionalized party system played a central role in explaining the pro-market orientation of the leftist government’s economic policies. The party system’s role hinges upon two main factors: the arrival of moderate candidates—those who climb through the ranks of party politics, build a reputation, and develop a stake in the system—to power, and the different parties’ ability to shape the executive’s economic policy through deliberation and accommodation in the legislature. Furthermore, Chile’s solid economic performance and deep market-oriented reforms discouraged any drastic changes to the model inherited from the military dictatorship. As this chapter shows, other factors—executive strength, natural resources, and organized labor—do not play a significant role in explaining Chile’s general adherence to pro-market policies.

The mechanism at work in the Chilean case can be summarized as follows. First, the highly institutionalized party system provided incentives for the arrival of moderate candidates to the presidency. Among the main factors contributing to this phenomenon are the complexity of the process of accommodation required to maintain stable electoral coalitions, the control that coalition and party leaders have over political nominations and resources, the strong ties between the parties and society, and the importance given to programmatic coherence and political trajectory. As a result, radical, antisystem candidates have been “weeded out” in the process of party politics. This would not be possible without the broad legitimacy conferred to political parties by the population. The trajectories of the Concertación’s presidents and the opposition’s presidential candidates show such leaders rose to the top after being tested in party politics, holding party leadership roles, and running for lesser offices. In contrast, candidates who have attempted to circumvent the party system have failed. Thus, Chilean presidents have been a consequence of a process of political accommodation, consensus reaching, and popular legitimacy.

Second, the highly institutionalized party system in Chile provided incentives for the political forces to reach agreements through deliberation and consensus-building, giving parties represented in Congress the opportunity to shape policy outcomes. Policy making in Chile has been the result of a system of incentives and disincentives for intraparty, interparty, and intercoalition negotiation that obviate the president’s need to rely on executive powers. Rather than exercising their executive powers—among the strongest in Latin America3—Chilean presidents tend to navigate the congressional waters to form broad majorities in order to get legislation passed. The party system’s stable coalitions and predictability of the parties’ policy positions made the Congreso Nacional the heart of political negotiations par excellence, resulting in a process of policy making by consensus that minimizes room for extremism. Consequently, the left-of-center governments’ general adherence to pro-market policies stemmed from an environment where presidential candidates are the result of (p.152) a moderating trajectory within party politics on the one hand, and congressional bargaining is favored over street politics and compromise prevails over executive discretion, on the other.

In the following pages I first present evidence of the high level of institutionalization of the Chilean party system, and discuss how some of the legacies of the military dictatorship contributed toward the system’s centripetal dynamics. Second, I present an account of how these factors played an important role in the Lagos government’s adherence to economic orthodoxy. Third, I discuss alternative hypotheses, and conclude that, in addition to the party system’s institutionalization, booming economic conditions and the depth of market reforms have played a fundamental role in encouraging the left’s general adherence to market orthodoxy.

Chile’s Highly Institutionalized Party System

Following the transition to democracy, Chile’s party politics has been highly institutionalized.4 With the return of competitive politics after 17 years of Pinochet’s military rule, parties resumed their role as the backbone of the Chilean political system.5 The opposition’s victory in the October 1988 plebiscite rejecting Pinochet’s attempt to remain in power until 1997 helped political parties reclaim the prominence interrupted by the military dictatorship. After regaining legal status in March 1987, parties were able to tap into the organizational capacity set up for the plebiscite campaign and connect with civil society organizations belonging to the different ideological subcultures that survived the interruption of democracy.6 Thus, the three main ideological subdivisions—left, center, right—that prevailed before the military regime’s proscription of political parties reemerged to claim the center stage of Chilean politics.

Four features have made the Chilean party system the most highly institutionalized in the region.7 First, there has been a remarkable continuity among the main political parties. Although the parties’ institutional life was interrupted during the Pinochet years (1973–1991), party loyalty and identification were able to remain largely unchanged during the proscription of some political organizations. Second, the party leadership has been characterized by politicians with a long trajectory of party accommodation and negotiation. There tends to be little room for personalistic politics and antisystem candidates. Third, there has been a strong connection between political parties and society. Although showing some signs of decline in recent years, parties maintain close ties with the population and party identities permeate everyday life. Lastly, there has been a clear correspondence between the candidates’ platforms and the policies implemented once they reach government. Once (p.153) elected, candidates do not turn their back on their campaign promises. Each of these four features is briefly explained next.

Party continuity

In spite of the Pinochet regime’s efforts to alter the traditional cleavages represented in the party system, the main ideological divisions around the right, the center, and the left of the ideological spectrum remained largely unchanged from their pre-coup versions.8 Although the party labels have slightly evolved throughout time, party platforms and cadres can be traced back to their pre-coup versions. Since the restoration of democracy in 1990, party continuity has been remarkable: parties rarely appear and disappear from one election to another and the main coalitions tend to be consistent across time.

Due to the roughly equal support for the left, center, and right, the Chilean party system is often referred to as a three-thirds system (sistema de tres tercios). In terms of the right, Chile’s two main right-wing parties, National Renewal (Renovación Nacional—RN) and Independent Democratic Union (Unión Democrática Independiente—UDI), drew supporters from the pre-coup National Party (Partido Nacional—PN) and the Gremialista movement.9 Representing the conservative vote before the breakdown of democracy, the PN was born in 1967 when Liberals and Conservatives merged to contain the Christian Democrats’ increasing popularity. Supportive of the Pinochet regime, the PN embraced the “recess” on political parties mandated by the dictatorship and gradually dissolved as a formal organization.10 Following the economic and political difficulties in the early 1980s, however, the right began to reassemble party cadres to prepare for a civilian government. In 1987, leading to the plebiscite, three conservative organizations, National Unity Movement (Movimiento de Unidad Nacional—MUN), National Labor Front (Frente Nacional del Trabajo—FNT), and UDI, joined forces to create National Renewal as the rightist political party that would carry on the National Party’s project.11 The UDI—formed mainly by Gremialistas from the Universidad Católica12 and former officials of the military government that advocated Pinochet’s remaining in power—broke away shortly thereafter. The two parties remained as the main rightist alternatives since the restoration of democracy. They have formed an electoral coalition presenting common congressional lists—and often a common presidential candidate—since democracy was restored.

The Christian Democrats (Partido Demócrata Cristiano—PDC), who displaced the Radical Party as the main centrist option during the 1960s, continued to hold the center of the electoral spectrum after the end of the dictatorship. The Catholic (p.154) Church’s progressive social doctrines shaped the party’s thought and—in parallel with the Vatican’s shift toward a reformist position on social issues—the party underwent a gradual transformation from the right-of-center to a more progressive stance.13 A year after its foundation in 1957, the PDC obtained 20 percent of the presidential vote in the 1958 presidential elections. Six years later, Eduardo Frei Montalva (1964–1970) became the first PDC president. Although part of the PDC supported the military coup, the party was heading the opposition to the regime by 1980.14 PDC presidents Patricio Aylwin (1990–1994) and Eduardo Frei Ruiz-Tagle (1994–2000) headed the first and second democratically elected governments after Chile’s transition to democracy. The PDC is one of the main parties comprising the Concertación.

The main parties on the left of the spectrum, the Party for Democracy (Partido Por la Democracia—PPD), the Socialist Party (Partido Socialista—PS), and the Communist Party (Partido Comunista—PC) can be traced back to the pre-coup socialists and communists.15 The PC was founded in 1922 and traces its origins to the Partido Obrero Socialista created in 1912. Officially founded in 1933, the PS benefited from a multiclass appeal that included blue-collar workers, members of the middle class, and even intellectuals, until the military coup. Both parties participated in Allende’s Popular Unity government (1970–1973) and remained proscribed throughout the military dictatorship. Notwithstanding the severe repression they suffered during the military dictatorship, their cadres were able to survive the authoritarian period, either in exile or clandestinely. Due to the ban that prevented these parties from participating in the 1988 referendum, the PPD was created in 1987 as an instrumental party in order to circumvent the ban. Through the PPD, many left-of-center sympathizers were able to participate in the electoral opposition to Pinochet’s extended rule. The PS and the PPD joined the Christian Democrats and the Radicals in the Concertación coalition. Remaining outside the Concertación, the PC constitutes the extra-parliamentary left.16 Although two main coalitions—the center-left Concertación and the right-wing Alianza—emerged after the end of authoritarian rule, each of the main parties forming the two coalitions maintained its membership, internal procedures, and identity.17

In the post-Pinochet period, these parties have also experienced remarkable continuity. Based on Pedersen’s index of electoral volatility, Figure 6.1 shows how the net change in the vote of all parties from one legislative election to another has remained low, hovering between 8 and 12 percent.18 In sharp contrast to the case of Venezuela, where parties win the presidency only to disappear by the next election, Chilean parties have become examples of stability.

                   Highly Institutionalized Party SystemChile’s Pro-Market Continuity

Figure 6.1 Vote Volatility in Chile’s Party System, 1989–2005

Source: Tribunal Calificador de Elecciones de Chile.

(p.155) Personalistic politics

In contrast to the experiences in other countries, personalistic politics have not been successful in the Chilean party system since democracy was restored.19 Situations in which a caudillo jumps to the national stage by starting a new party are rare, and support for antisystem or protest parties has been extremely low.20 The fate of the Progressive Union of the Centrist Center (Unión Centro Centro Progresista—UCCP) party is a case in point. The party was created around the leadership of Francisco Javier Errázuriz, a businessman-cum-populist who participated in the 1989 elections. A supermarket tycoon, Errázuriz attempted to situate the UCCP as the true centrist alternative—hence the emphasis in the name. In spite of these efforts to become the main centrist party, most of the UCCP support came from the right.21 The UCCP had no party organization and lacked a clear government program. Consequently, Errázuriz’s electoral vehicle disappeared as he faced legal trouble and retired from politics.22

Instead, party leaders are selected among cadres with a long trajectory within the party.23 In the case of the left, leaders of the PPD, Socialist, and Communist parties—such as Ricardo Lagos and Gladys Marín—were drawn from the pre-coup Socialist and Communist parties. In the case of the right, leaders of the UDI, such as Hernan Buchi—UDI’s 1989 presidential candidate—and Joaquín Lavín—UDI’s candidate in 1999 and 2005—can be traced back to Pinochet’s economic team of technocrats, the Chicago Boys. Arturo Alessandri Besa—UDI and RN’s 1993 presidential candidate24—was a member of Congress with Partido Nacional at the time (p.156) of the coup. RN’s 2005 presidential candidate, Sebastián Piñera, served as senator and the president of the party. Similarly, there is cadre continuity among the Christian Democrats, whose presidents Aylwin and Frei were prominent members of the party long before the military coup.

A recent example of the importance of party trajectory for candidate selection is the Concertación’s nomination of former president Eduardo Frei as its candidate for Chile’s 2009 presidential election. When his candidacy was challenged after the primaries by Marco Enríquez-Ominami—a former filmmaker and first time representative (diputado) from the Socialist Party—the Concertacion’s leadership closed ranks to support Frei’s nomination.25 Marco Enríquez-Ominami resigned from the party and ran instead as an independent, which severely jeopardized his chances of reaching the presidency. Frei’s nomination shows the weight of an established trajectory within party politics, the leadership’s esprit de corps to protect the established candidate selection mechanism, and tight grip over the candidate selection process.26

Party roots in society

Political parties in Chile have been well-established national organizations that reach the most remote villages in the country and effectively shape political life.27 They have constituted the main channels to voice concerns and reach office. Party membership has worked as an important organizing principle in private institutions and associations, including university life, labor unions, and professional associations. Political preferences are passed from one generation to another, and constitute an important part of Chileans’ identity.28 Party roots in society are particularly relevant to understanding the high levels of institutionalization of the party system in Chile. Political tendencies in this country are the result of collective memories of past political divisions that shaped and reshaped the party system. They also embody political identities, values, sentiments, and traditions that are passed to the new generations mainly through families, including the way parents structure the sociability of their children through, for instance, schools, neighborhoods, and churches.29

Two indicators of the degree to which political parties are considered legitimate actors representing society’s interests are voter turnout and party identification. As Table 6.1 shows, the abstention rate in Chile remains at remarkably low levels. Similarly, party identification oscillated between 70 and 80 percent in the years following the transition to democracy.30 There are some signs, however, of decreasing trends over time as elections become less plebiscitary and the rigidity of the binomial system turns off voters, particularly young ones. (p.157)

Table 6.1 Voter Turnout in Chile’s Presidential Elections, 1989–2005

Presidential Election

Abstention Rate (%)









Source: Tribunal Calificador de Elecciones de Chile.

Correspondence between campaigns and policies

Since the return of democratic life in Chile, Concertación presidents maintained a general continuity with the policies expressed during their political campaigns. There were no surprises regarding candidates promising to follow a particular economic model during the campaign and changing their minds once in office. In contrast to the Venezuelan experience—when Pérez and Caldera neglected their campaign promises during their second presidencies—the correspondence between party platforms, campaigns, and policies has been the norm in Chile.

Post-Pinochet Features

Changes to the electoral rules during the military dictatorship considerably structured the party system to reach high levels of institutionalization.31 Although Pinochet attempted through different means to interfere in party life and alter Chile’s historical ideological cleavages through the 1980 Constitution, the 1987 Law of Political Parties, and the 1988 Electoral Law,32 the unintended consequence was the increase in predictability and cooperation among parties. Four fundamental changes contributing to the consolidation of the Chilean party system in its current form were (1) the establishment of the binomial electoral system with high thresholds to register political parties; (2) the introduction of legacy senators; (3) the need for congressional supermajorities to pass important legislation; and (4) the democratization of the selection of the party leadership.33

First, the bipolar logic of the Chilean binomial electoral system—sistema binominal, as it is called in Chile—virtually forces parties to create broad alliances or lists before the elections.34 Intended to eliminate small parties and create a two-party system, the Chilean electoral system provided for congressional districts with a magnitude of two. A party list is required to double the total vote of the closest list to (p.158) win both seats in each district—i.e., a list needs at least 66 percent of the vote to carry both seats. Otherwise, the first and second lists get one seat each. This formula tends to systematically overrepresent the minority list, which, at the time of the transition, corresponded to the rightist parties sympathizing with Pinochet. Moreover, the 1987 Law of Political Parties made it considerably more difficult to register a political party by requiring signatures equivalent to 5 percent of the electorate in at least eight regions or in at least three neighboring regions to register a party. This provision increased the minimum threshold from 20,000 signatures before the coup to roughly 200,000 at the time of the 1988 plebiscite.35

Second, after losing the 1988 plebiscite, Pinochet’s appointment of nine “institutional” or “legacy” senators—one fifth of the senate—distorted the relationship between parties’ share of the vote and congressional representation.36 Article 45 of the 1980 Constitution established that, of the nine institutional senators, four would be chosen by the National Security Council—controlled by Pinochet during the 1990s—among retired commanders in chief of the army, navy, air force, and national police. Three would be chosen by the Supreme Court—two among former justices and one among former attorney generals. The president would appoint one from ex-rectors of academic institutions, and another from a former cabinet member. The Concertación governments were not able to appoint like-minded senators until 1998. On August 16, 2005, Congress abolished the provision for institutional senators, beginning on March 11, 2006.37

Third, the 1980 Constitution made it particularly difficult to form working majorities to approve legislation, forcing the Concertación to reach out to opposition parties in order to govern. Previously, the 1925 Constitution facilitated the approval of legislation without broad congressional support—often introduced by presidents who won by a slim plurality—making the system particularly volatile.38 Passing legislation required a simple majority in either house of Congress and only one third plus one in the other. In order to preserve changes introduced by the military regime, the 1980 Constitution raised the bar to pass legislation, requiring a majority in both houses, or a supermajority, depending on the issue.

Lastly, the 1987 Law of Political Parties mandated the selection of party leaders by the membership through democratic means. This provision turned the elite-driven, behind-the-scenes, decision making process that characterized the parties before the military coup into a more transparent one. The change contributed to strengthen the legitimacy of the party leadership and engage the rank-and-file in the parties’ internal life. A developed form of this democratic principle is the selection of candidates through primaries. Although party primaries have not been the norm in every political party, their introduction as the Concertación’s preferred mechanism to select presidential candidates has played an important role in strengthening the (p.159) connection between the parties and society.39 The Concertación has considerably democratized their candidate selection process, moving from a smoky room model to an openly democratic one. It replaced the elite conclave mechanism employed in 1989 with an indirect primary in 1993, which was in turn replaced by an open primary system in 1999.40 In contrast, the right-wing coalition Alianza has maintained a leadership-centered selection process.

Together, these four features of the post-Pinochet regime acted as powerful incentives for political parties to form stable coalitions and favor accommodation in order to maximize chances of reaching power.41 As a result, the two main coalitions—the left-of-center Concertación and the right-of-center Alianza—have routinely engaged in a series of multilevel negotiations at the party and coalition level. A prominent example is the intense pre-electoral negotiations that take place in order to select the lists of candidates for each district in congressional elections. The parties forming each coalition—mainly the centrist PDC and PRSD and the leftist PS and PPD comprising the Concertación and the UDI and RN comprising Alianza por Chile—have to negotiate 60 two-seat electoral slates for the chamber of deputies and nine or 10 similar slates for the senate, depending on the electoral cycle.42 Since the binomial formula favors the election of one candidate from each coalition, coalitions need to present two particularly strong candidates in a district to double the vote of the opponent’s list and win both seats at stake. If a coalition fails to win both seats, however, a strong candidate is “wasted” in that district. Therefore, in order to entice strong candidates to take the risk and pair up with another strong candidate in the same district, the coalition needs to compensate them politically in the event of a defeat.

In the case of the governing coalition, prominent positions in the executive’s cabinet are awarded as compensation.43 Additionally, “formal transversal coordination across the government’s parties is conducted by the General Secretariat of the President (Ministerio de la Secretaría General de la Presidencia).”44 In the case of the opposition, negotiations are somewhat more complicated because it is more difficult to offer some form of political compensation without controlling the executive branch. However, the process itself is meaningful because it involves true sacrifice and generates enduring loyalties to the party and the coalition. This practice of accommodation has contributed greatly to generating a sense of allegiance—both to the party and the coalition—maintaining discipline among the coalitions’ legislators.

Furthermore, not only has party discipline become a sine qua non to reach the supermajorities required to pass legislation, but it has also generated the strong sense of predictability required to work with all the parties represented in Congress. The system of accommodation within coalitions results in the congressional loyalty, party discipline, and predictability that have helped to institutionalize the system of (p.160) congressional deliberation and bargaining.45 In the words of Pamela Figueroa, director of the Office of Governability at the Ministry of the Interior and member of the PPD’s National Directorate, thanks to this predictability, “the government has a pretty good idea of how many votes it can count on from legislators and what it will have to give up in exchange in order to negotiate with the opposition.”46

These qualities proved to be essential to seek broad consensus beyond the political forces forming an electoral coalition. The institutional constraints inherited from the military dictatorship forced Concertación presidents to negotiate most of their government program with the conservative opposition.47 Since the restoration of democracy in 1990, the Concertación was forced to negotiate with at least one of the parties of the right in order to approve legislation. Consequently, the Concertación governments adopted a piecemeal reform strategy that incorporated a broad consensus across the ideological spectrum. This approach excluded the implementation of any major reforms advocated by the Concertación—such as modifying the binomial system—but proved to be effective in passing a compromise version of the original proposals—as was the case with labor and health care reforms.48 As Senator Carlos Ominami pointed out, “the need to negotiate these reforms with all the political forces represented in congress certainly slowed down the pace and scope of the policy transformations advocated by the Concertación in general and the Socialist Party in particular.”49 Although the Concertación presidents never advocated radical economic policies, the party system put the breaks on the left-of-center governments’ reform agenda—an opinion shared by several of Lagos’s cabinet ministers and close advisers.50

In sum, the combination of the binomial system, the designated senators, the supermajorities required to legislate on important matters,51 and the democratization of party life transformed the Chilean party system into one with stable, disciplined coalitions with predictable policy positions, deep roots in society, and the habit of negotiating virtually every initiative with the entire political spectrum. These characteristics would result in a system encouraging a high level of moderation among the different political forces.52

Party System Institutionalization and Economic Policy Moderation

The high degree of institutionalization of Chile’s party system has been a key factor in conducting moderate economic transformations. This is due to two main reasons. First, Chile’s system tends to generate moderate candidates with a history of negotiation and a stake in the system, so gradual reformers are likely to be elected rather than radical transformers. Second, Chile’s party system fosters accommodation and (p.161) consensus seeking in the legislature, generating an essential “framework of predictability for economic decision-making.”53 Disciplined political parties with strong social roots and predictable positions in Chile force executives to interact with them to negotiate policy courses of action. In other words, in Chile, seasoned, moderate executives opt for deliberation and negotiation rather than rule by decree or plebiscitary appeals in order to conduct policy.

Moderate candidates likely to reach office

The process of negotiation characteristic of the Chilean party system has resulted in the selection of presidential candidates with a history of political accommodation, consensus building, and party loyalty. A product of party politics, presidential candidates develop a stake in the system after climbing through parties’ ranks. Candidates then strive to preserve this same system. This has been the case for every candidate reaching the presidency since the return of civilian rule.

The political careers of leftist candidates and their opponents are cases in point. By the time Ricardo Lagos ran for president in December 1999, he was well known for being a moderate socialist. He had participated in two primary elections for president and one election for senator.54 He acquired a reputation as an orthodox, pro-market economist while serving as the minister for public works during the Frei Ruiz-Tagle administration (1994–2000). One of the main factors contributing to this reputation was his proactive partnership with the business sectors in activities that were previously controlled by the government. Lagos was appointed minister of public works after losing the primary to select the Concertación’s candidate between Frei Ruiz-Tagle (Christian Democrat) and Lagos (PS/PPD) in 1993.55

A product of the same party system, Lagos’s successor shared the same features. Michelle Bachelet was also a political insider with a stake in the system. She served as minister of health (2000–2002) and minister of defense (2002–2004) during the Lagos administration. Before serving in these capacities, she unsuccessfully ran for mayor of Las Condes (a comuna in eastern Santiago) in 1996 and participated in Ricardo Lagos’s 1999 campaign. Before becoming the Concertación candidate for president, she had to beat Christian Democrat Soledad Alvear in a primary election.56 By the time that Bachelet became the Concertación’s presidential candidate in 2005, she had navigated a system of party accommodation and consensus seeking in order to achieve the nomination of the Socialist Party first, the Concertación second, and—most importantly—the presidency itself.

Opposition candidates have had similar records of party work. Joaquín Lavín, UDI’s presidential candidate in the 1999 and 2005 presidential elections, had a long history of accommodation within the party. He first ran unsuccessfully for Congress (p.162) in 1989 and was later elected mayor of Las Condes in 1992. Following his defeat by a narrow margin in the 1999 presidential election, he became the mayor of Santiago until he ran again for the presidency in 2005. Likewise, Sebastián Piñera, the RN candidate in 2005—when the right did not present a unified candidacy for the presidential election—and 2010—when he won the presidency—had served as a senator between 1990 and 1998 and president of RN between 2001 and 2004. In brief, all of the presidential candidates put forth by the parties forming the main coalitions share similar trajectories in party politics.

Parties’ ability to affect economic policy

Institutional constraints forced the Concertación administrations to govern by trying to obtain the consent of a predictable and stable opposition.57 This practice in turn generates a culture of compromise that reinforces the government’s ability to “reach consensus among a wide array of political forces.”58 Consequently, the opposition has had the ability to substantially shape the content of policy in Chile. As a result of the predictability of the rules of the game, the opposition has responded with a responsible position. It has engaged in intense parliamentary negotiations and supported the government in passing important economic reforms. “Coalitional discipline helped the Concertación to enlist rightist support for a hike in the value-added tax that paid for expanding social programs in the early 1990s, as well as to pass anticorruption legislation during Lagos’s term.”59 Perhaps the best example is the opposition’s overwhelming support for the 2005 constitutional reform eliminating several of the “protected democracy” provisions—legacy senators, the president’s inability to remove and appoint the top commanders of the military, and the military’s mandate as the sole warrantor of the constitutional order. Only four representatives—all retired military personnel and only one of them elected—voted against the reforms.60 After all, the left’s responsible management of the economy and the political parties’ responsiveness to society’s demands obviated the need for such provisions.

The approval of the FTA between Chile and the United States—a very controversial issue that generated heated debate across the political spectrum—constitutes another example of the politics of accommodation and the consequent responsible reaction of the opposition. After President Lagos’s three-year negotiation with the United States, the agreement that was signed in June 2003 was approved 87 to 8 in the Chilean Chamber of Deputies and 34 to 5 in the Chilean Senate.61 Among the votes against the FTA in the lower house, one was a socialist member of the Concertación, five were from UDI, and two from RN. In the Senate, votes against came from two Christian Democrats, two members of RN, and one from Chileve (a short-lived (p.163) spin-off from the PPD).62 The vote tally is a reflection of the successful accommodation of the different party preferences even in the context of highly contentious issues.

The unanimous approval of Lagos’s poverty alleviation program, Chile Solidario, is another case in point. Originally, the opposition rejected the president’s initial bill, particularly those provisions related to the centralization of resources in the hands of the Ministry of Planning and away from local governments.63 The bill was watered down by eliminating contentious issues and approved by consensus in both houses of Congress.64

Consensus is not reached on every policy initiative, of course, and the government’s attempts to substantially alter the status quo without fully reconciling policy positions have been unsuccessful. The tax and labor reforms—pursued at different times by Presidents Aylwin, Frei, and Lagos—are illustrative. In these cases, the versions approved by Congress were only a shadow of the changes pursued by the executive,65 particularly regarding the labor reform attempts in which the government fell considerably short of its goals (Aylwin), was shut down by Congress (Frei), and even struggled to get on board its own coalition members (Lagos).66 These governments’ failures to loosen restrictions on unionization and collective bargaining—explicitly one of their main government goals67—constitute one of the most visible examples of the moderating role of the process of legislative accommodation.

Thus, the incentives for negotiation in the Chilean party system have scaled down the Concertación’s policy initiatives in order to gradually move forward its agenda. As Francisco Díaz, Office of the President’s director of public policy confided, “the Concertación’s economic agenda has been slowed down by the need for compromise that congressional dynamics impose.”68

Alternative Explanations

In addition to party system institutionalization, two other factors have played an important role in accounting for the left’s economic policy moderation in Chile: the country’s solid economic performance and the depth of market reforms. Conversely, other factors including executive powers, natural resources, and the strength of organized labor are much less useful in explaining that country’s piecemeal economic transformations.

Economic conditions

Growing steadily since the mid-1980s, and with declines in poverty rates and improvements in wealth distribution, the Chilean economy has provided little incentive to conduct substantial economic policy transformations. After the economic (p.164) recovery following the crisis in 1983 through 1984,69 the opposition coalition Alianza Democrática (AD)—formed by Christian Democrats and some Socialists—was compelled to moderate its economic program. As the economic situation improved and the social unrest was overcome, AD lost important negotiating leverage to lure business into forcing a transition to democracy before 1989.70 Clear economic improvement drove AD to commit to pro-market policies—dropping its demands for a mixed participation of state and private enterprise—and focus on political openness rather than economic revisionism. The AD even stopped referring to state intervention as such, and thereafter attempted to shape economic policy within the boundaries of market orthodoxy.71 In other words, economic success generated a risk aversion among the main economic actors—why change the model if this one is working so well?—which boxed in the opposition into committing to the prevailing model. In contrast to experiences in Venezuela—where market reforms were unable to survive popular opposition and thus failed to detonate economic recovery—and in Brazil—where economic growth was modest after partial reforms—economic success became a compelling reason for the opposition to embrace market orthodoxy in Chile. In the words of Jorge Frei, deputy minister of justice and one of Lagos’s former policy advisors, “it was the Concertación’s embrace of market orthodoxy that made the transition to democracy even possible.”72

The economic model’s sustained success during the Christian Democrat governments of the 1990s made it even more difficult for the Socialists to reverse market orthodoxy once they reached the presidency in 2000. In fact, although Pinochet is credited for laying the foundations for sustained economic growth, the economic performance during the Concertación governments surpassed that of the dictatorship.73 Although far from the double-digit growth rates experienced in China and India during the 1990s, the country experienced the fastest economic expansion in Latin America since 1980. The continuation of economic success during the first two Concertación governments, along with the Socialists’ participation in important cabinet posts, became compelling reasons for not making any significant changes to the general economic orthodoxy followed in Chile.

A relevant counterfactual question is, then, had Chile experienced deteriorating economic conditions, would Lagos’s response have departed from economic orthodoxy? Chile’s generally vigorous economic performance under Concertación governments provide us with few hints to answer this question. However, there is evidence that a brief economic crisis was not enough to prompt a departure. The only time in which declining economic conditions could have prompted a change in economic policy was Chile’s 1999 economic recession—the country’s worst economic performance since 1983. In 1999, the last year of the Eduardo Frei Ruiz-Tagle administration and the year of the presidential election, Ricardo Lagos’s commitment to (p.165) economic orthodoxy was put to the test. For the first time in the post-Pinochet period, Chile’s economy experienced an economic recession, recording a negative growth rate of -0.8 percent. After experiencing double-digit growth (10.6 percent) in 1995, the recession marked the country’s fourth year of decreasing economic performance.74 Unemployment, which had averaged 5 percent in the 1990s, doubled in 1999 and remained at 10 percent until 2006.75 The situation during the electoral year deteriorated to the point where presidential approval levels reached 28 percent, the lowest level for any Concertación president between the return of democracy in 1990—when Aylwin’s approval surpassed 70 percent—and 2006—when Lagos’s approval during his last year in office hovered around 68 percent.76

Despite the economic recession, Lagos’s commitment to maintaining the pro-market policy trend remained firm. Although the 1999 recession turned out to be temporary, economic performance in Chile had clearly been deteriorating—along with the president’s approval—since 1995.77 At the time of the election in December 1999—the height of economic uncertainty—the Lagos campaign maintained its pledge to continue with economic orthodoxy. This continued to be the case even during the first three years of the Lagos presidency, which were characterized by sluggish growth. Although Chile’s recession leading up to the change in government was not as drastic as other economic crises such as, for example, the 1994–1995 peso crisis in Mexico or the 2001–2002 financial crisis in Argentina and Uruguay, the sudden drop in GDP growth was unusual enough—the worst performance since 1983—to raise the issue of whether the prevailing economic model was reaching exhaustion. Instead, rather than taking the opportunity to advocate more drastic economic transformations, the Lagos administration adhered strictly to a piecemeal reform program focusing mostly on labor issues and leaving untouched the pro-market model adopted by Pinochet.

Notwithstanding this instance in which a brief crisis failed to prompt a change in the economic model, however, it would be difficult to argue that a sustained erosion of economic conditions—such as the one experienced in Venezuela over more than two decades—would have no effect on the party system. As seen in the Andean country, a prolonged state of sharp economic deterioration would probably result in citizens’ discontent and the mistrust of political parties as capable representatives of society’s preferences, even in the most institutionalized party systems.

Deeply rooted market reforms

The depth of neoliberal reform can be measured in terms of longevity of market-oriented policies and their scope. In other words, how long has neoliberalism been around and to what extent has it permeated relevant sectors of Chilean society? (p.166) Chileans have become habituated to neoliberal economic policies as the dominant paradigm in that country since 1973—the longest period in Latin America. Even though initially neoliberalism was reserved for Pinochet’s government elites, in the aftermath of the 1982 debt crisis the model reached wide sectors of society and became the common currency of business sectors, academics, and even the opposition.

Pioneers of neoliberal economic policies in the region, Chileans were the first to implement ambitious and comprehensive market reforms. Shortly after the overthrow of Allende in 1973, the Pinochet regime undertook a neoclassical economic program to replace the state-interventionist policies that characterized the socialist’s tenure. As a result of the economic transformations that took place during the military regime, Chile became “one of the most open economic systems in the developing world.”78

In the process, market orthodoxy permeated Chilean society from top to bottom, from a select group of technocrats heading key ministries in the early years of the dictatorship to the bulk of the business and middle class sectors. This contributed to reducing the spectrum of acceptable options to a narrow range within market orthodoxy. The narrowing of feasible alternatives was possible—as discussed in the previous section—given the success of market orthodoxy in bringing growth rates above the regional average.79

The implementation of neoliberalism during the dictatorship (1973–1990) can be divided into two main phases: the early “radical” years—when the model was first introduced—and the post-1982 or “pragmatic” years—when neoliberalism truly began to permeate society.80 The radical period, comprising between 1975 and 1982, witnessed a “draconian economic stabilization programs—often referred to as shock therapy—and the quick liberalization of most of the economy, including prices, trade, and capital markets.”81 The implementation of the measures was extremely dogmatic, with little regard for the dislocation effects on productive sectors that had trouble adjusting to the abruptly adopted openness. During this period, the technocrats in charge of designing and executing neoliberal policies had Pinochet’s unconditional support to push for radical economic change. They were effectively isolated from political pressures and only worked with a small fraction of the business sectors.

Thus, with the exception of the select group of technocrats and business leaders, neoliberalism remained a relatively foreign concept to most sectors until the 1982–1983 crisis. Following a sudden drop in GDP growth of -10 percent—due to a series of economic difficulties including excessive indebtedness, poor oversight, and the collapse of the financial system—the Pinochet government softened its pro-market dogmatism to adopt a more flexible variant dubbed “pragmatic neoliberalism.”82 As a result, the government became more involved in regulating the markets and incorporated broad (p.167) sectors of the business community to participate in economic policy formulation at all levels of the bureaucracy.

A gradual process of interweaving of business actors into governmental decision making ensued, allowing the neoliberal model to influence key political and economic sectors. Before the crisis, only big business had been socialized into the neoliberal paradigm. The big business conglomerates, such as Cruzat-Larraín and Banco Hipotecario de Chile (BHC), worked with the dictatorship from the very beginning during the radical period. During the period of pragmatic neoliberalism, however, this collaboration expanded to business associations such as the Confederation for Production and Commerce—the umbrella organization of large scale business associations.83 As part of the rapprochement between the business sectors and the government, Pinochet appointed prominent members of the business community to top bureaucratic positions right under the technocrat leadership.84 The formal incorporation of business into government positions helped to form a network of intermediation that gradually contributed to the assimilation of the bulk of the business sectors into the neoliberal model.

This assimilation did not end with the transition to civilian governments. Instead, the Concertación governments embraced the practice and furthered the technocratization of government positions underway during the Pinochet years. Think tanks from the right, center, and left became a steady supply of technically able bureaucrats who roughly shared the same views and spoke the same language as the economic elites and business sectors. The Concertación governments appointed highly educated technocrats that emerged from specialized think tanks linked to the political parties belonging to the electoral coalition.85 Among the most prominent think tanks are CIEPLAN, the Latin American Center for International Economics and Policy (CLEPI), the Latin American Faculty of the Social Sciences (FLACSO), the Center for Development Studies (CED), and the Latin American Center for Doctrine and Social Studies (ILADES).86 In the words of José Jara, former director of FLACSO Chile, this well-rooted practice continued to be the norm in Chile.87

The long, vast assimilation of the neoliberal paradigm by different sectors had important consequences for the type of policies pursued by the different governments. The internalization of market orthodoxy in Chile resulted in the shortening of the ideological distance between political parties. By the time the Concertación reached power, a strong consensus already existed on free market economics and the central role of the private sector for economic development. If the opposition to the military regime was to have any chances of winning a majority of the vote for the presidency in 1989, it had to make very clear its embrace of orthodox economic policies. The Concertación embraced neoliberalism and fostered the communication channels that developed during the dictatorship between the government and the main (p.168) economic actors. The democratically elected government and the Confederation for Production and Commerce made a habit out of the exchange of technical studies and general information about the impact of proposed economic measures.88

An example of the level of neoliberal consolidation in Chile is the 1999 electoral campaign between Lagos and Lavín. In that year, both candidates campaigned on the strict adherence to a market-based development model, and “in terms of policy, there was not a great deal of difference between the two leading electoral alliances.”89 Both the left and the right were entirely committed to maintaining the same economic policy. The main differences then were social issues—abortion and divorce, for example—and the extent to which certain social policies should change with respect to housing, education, and criminality.90 According to Álvaro García Hurtado, Frei’s minister of the economy, Lagos minister of the general secretariat of the presidency,91 and member of the PPD’s national directorate, what set Ricardo Lagos apart from Joaquín Lavín—the Alianza por Chile candidate and one of the “Chicago Boys”92 that conducted neoliberal policies during the dictatorship—“was not their economic projects, but their positions on social issues.”93 In short, pro-market policies are so well rooted in Chile that it would be difficult for a serious contender to depart significantly from them.

Executive powers

Chilean presidents have historically been among the strongest in Latin America, a precedent reinforced by the 1980 Constitution.94 These formal powers of the executive survived the constitutional reforms of 1989 and 2005. Among the most important powers are the exclusive ability to introduce legislation in all matters of taxation, creation of government agencies, entitlement programs and social security, and collective bargaining procedures. The national budget automatically becomes law if Congress does not approve it within 60 days. The president may summon Congress for an extraordinary session anytime to discuss any issue the president deems a priority. These prerogatives give the executive such leverage vis-à-vis the legislature that it has been referred to as “an exaggerated presidential system.”95

Despite executive strength, however, the existence of a highly institutionalized party system has obviated the need to rely on the president’s powers.96 Postauthoritarian presidents have consistently taken into account the views of their party, coalition, and even opposition parties to further their government program. Predictability (presidents know where the different legislators stand and how many votes they can garner), party discipline (legislators respond to programmatic issues rather than personalistic adventures), and commitment to the market-orthodox development model (the commitment that the Concertación made to respect a general pro-market (p.169) framework and play by the rules of the 1980 Constitution) have been strong incentives for the president and legislature to negotiate policy and reach working consensus. Cooperation and consultation have been essential features of postauthoritarian executive-legislative relations in Chile.

Coalitional incentives function as important checks on the executive’s prerogatives.97 The need to accommodate the different interests represented in the coalition into the cabinet affect executive-legislative dynamics as well. For the sake of preserving intracoalitional harmony, the Concertación’s legislative fraction relies on fluid negotiations between the president and the parties forming the coalition.98 This practice ensures that the programmatic balance prevailing in the cabinet and ministries carries over into the legislative arena. Presidents’ attempts to dominate the legislative agenda are met with pressure to respect coalition agreements.99 In sum, the president’s need to rely on his or her executive superpresidential powers is obviated because of Congress’s importance to the legislative process as a result of the high institutionalization of the party system.

The role of resources

Despite the important role of copper in the Chilean economy and the dramatic increase in the price of this commodity, this country’s resource dependence did not induce exuberant statist policies. The same way that Chávez took advantage of an unprecedented influx of commodity windfalls, the Lagos administration benefited from unusually high prices of copper.100 The average price per pound almost tripled between 2004 and 2006, increasing from US$1.30 to US$3.05. In 2006 copper revenues constituted 34 percent of the government’s total revenue—much higher than Bolivia’s 22 percent from natural gas—and the country’s budget surplus of 7.9 percent of GDP was the largest in two decades.101 However, the Lagos administration refrained from conducting statist policies requiring extraordinary spending. On the contrary, and in spite of the temptation that the influx of copper money represented,102 his government furthered pro-market reforms through privatizations and more stringent government spending.

Organized labor

Organized labor was unsuccessful in pushing for statist policies in any of the policy spheres under study. Although Chile was the only Latin American country where labor experienced gains in unionization rates during the 1990s103 this interest group remained significantly weak as a result of Pinochet’s legacy following the 1979 labor code—known as Plan Laboral—that severely restricted workers’ ability to bargain (p.170) collectively and maintained unions under strict state control.104 Evidence of this weakness was the inability of Chile’s main workers’ organization, the Unitary Workers’ Central (Central Unitaria de Trabajadores—CUT) to push for comprehensive labor reform, which has become this interest group’s top priority since Chile’s labor regulation does not fully conform to International Labor Organization standards.105 Although each of the Concertación governments promised comprehensive reform, changes to the labor code have been extremely modest, such as recognizing public employee associations and granting collective bargaining to about 12 percent of the labor force.106

Promising to bring the right of collective bargaining for inter-enterprise and transitory unions, and end the ban on replacing striking workers, the Lagos administration was not the exception. However, the proposed measures were quickly abandoned due to disagreement both within the Concertación and with the opposition.107 Thus, organized labor did not enjoy enough strength to materialize its top policy priority.


The case of Chile illustrates how a highly institutionalized party system played an important role in sustaining the country’s economic orthodoxy. Moderate economic policies are the consequence of both the temperance instilled in the candidates through the process of accommodation and consensus-building in party politics and the ability of the different forces represented in Congress to shape and moderate economic policy.

In addition to the party system, Chile’s economic success and depth of market orthodoxy significantly contributed to the continuation of orthodox economic policies. There is evidence that both factors contributed to the preservation of pro-market policies during Lagos’s leftist administration, although it is difficult to imagine the depth of market orthodoxy playing this role without the model’s economic success. First, regarding Chile’s prevailing economic conditions, there is no indication that short-term economic adversity—in an election year and during the first three years of government—affected the Lagos administration’s commitment to pro-market policies. This does not mean, however, that a sustained erosion of economic conditions—such as that experienced in Venezuela for more than 20 years—would not undermine society’s reliance in political parties as competent stewards of the polity and, consequently, erode the level of institutionalization in Chile’s party system. Arguably, as was the case in Venezuela, the prolonged deterioration of living conditions would serve as a catalyzer for the deterioration of the party system.

(p.171) Second, regarding the depth of market orthodoxy in Chile, the gradual acceptance of Pinochet’s profound economic transformations was contingent upon favorable economic results. Sustained growth resulting from market-oriented reform led to a generalized acceptance of the pro-market policies, which in turn led to the narrowing of the political spectrum. However, other institutional legacies have been reversed or eliminated once a minimum consensus is reached, such as the elimination of appointed senators. The removal of such institutional legacies sheds light on how institutional constraints inherited from the dictatorship might also be altered if the required majority in Congress agrees to do so in order to respond to society’s demands.

The Chilean case also illustrates how the strength of the executive vis-à-vis the legislature, the country’s high resource dependence, and the strength of organized labor lack explanatory power for our purposes. A logical explanation for Chile’s adherence to pro-market policies would look for a weak president who is unable to push for important transformations through executive powers and is subject to congressional authority. Instead, Chile’s institutionalized party system provided disincentives to utilize presidential powers to circumvent the legislature. Similarly, this country’s general adherence to pro-market policies took place in spite of the country’s relatively high resource dependence. In contrast to the Venezuelan case, the Lagos administration was not encouraged by increased natural resource revenues to increase the level of state intervention in the economy. Additionally, the weakness of organized labor in Chile has resulted in this sector’s inability to push for economic reforms that would materialize their long-standing demands.

Regarding the origins of Chile’s institutionalized party system, several important factors have contributed toward the high levels of institutionalization in the Chilean party system. On the one hand, the party system finds its roots in the pre-Pinochet system that took shape throughout Chile’s long democratic history since the early 20th century. During this time, party identities became so deeply entrenched in society that the military dictatorship’s attempts to transform the political landscape failed. On the other hand, important rules, both electoral—e.g., the binomial system—and procedural—e.g., the requirement of qualified majorities to modify matters of importance—inherited from the dictatorship helped routinize practices of candidate selection and intra and intercoalition negotiation among the different political parties. The rules structured party politics in an unprecedented way in Chile and reduced further the window of opportunity for drastic economic policies, such as those of Salvador Allende’s government, to occur. These factors have been supported by enviable economic conditions, which facilitate compliance with the rules of the game.

(p.172) Finally, it is important to note that Chile’s party system has begun to show signs of deterioration. Such signs include rising voter disenchantment—particularly among young voters—and popular demonstrations outside institutional channels.108 If this trend continues to the point where traditional parties become unable to articulate and channel society’s demands, the gradual pace of reform in post-authoritarian Chile can be expected to change as well.

The findings stemming from the Chilean case provide additional support for the hypothesized nexus between party system institutionalization and the degree of economic moderation. As the cases of Venezuela, Brazil, and Chile suggest, higher levels of institutionalization result in more moderate leftist reactions to the prevailing pro-market trend.


(1) . “Teníamos que ser muy realistas con los límites impuestos por la herencia institucional de la dictadura y la necesidad de mantener la cohesión entre los distintos partidos en el gobierno. Sin lugar a dudas, el paso de las reformas económicas de la Concertación se ha visto disminuido por la necesidad de buscar acuerdos entre todas las fuerzas políticas, tanto de la izquierda como de la derecha.” Author’s interview, June 5, 2009.

(2) “El retorno de las dos almas,” by Patricio Navia, La Tercera, April 25, 2006

(3) . Matthew Shugart and Stephan Haggard, “Institutions and Public Policy in Presidential Systems,” in Presidents, Parliaments, and Policy, ed. Haggard and McCubbins (New York, NY: Cambridge University Press, 2001); UNDP, La democracia en América Latina (New York, NY: UNDP, 2004); Gabriel Negretto, “Political Parties and Institutional Design: Explaining Constitutional Choice in Latin America,” British Journal of Political Science 39:1 (2009).

(4) . Alan Angell, “Party Change in Chile in Comparative Perspective,” Revista de Ciencia Politica (Santiago) 23:2 (2003); Mainwaring and Scully, “Introduction: Party Systems in Latin America,” in Building Democratic Institutions: Party Systems in Latin America, ed. Scott Mainwaring and Timothy Scully (Stanford, CA: Stanford University Press, 1995); Samuel Valenzuela and Timothy Scully, “Electoral Choices and the Party System in Chile,” Comparative Politics, 29:4 (1997).

(5) Timothy Scully, “Reconstituting Party Politics in Chile,” in Building Democratic Institutions: Party Systems in Latin America, ed. Scott Mainwaring and Timothy Scully (Stanford, CA: Stanford University Press, 1995), 102

(6) Scully, “Reconstituting Party Politics in Chile,” 123

(p.243) (7) Scully, “Reconstituting Party Politics in Chile.”

(8) Valenzuela and Scully, “Electoral Choices and the Party System in Chile,” 511

(9) . The Gremialista movement was a typically Catholic University student union, with some resemblance to the Integrist movement in Franco’s Spain. Rossana Castiglioni, “Pensions and Soldiers: The Role of Power, Ideas, and Veto Players under Military Rule in Chile and Uruguay,” 21.

(10) Arturo Valenzuela, “Government and Politics,” in Chile: A Country Study, ed. Rex Hudson (Washington, DC: Library of Congress, 1994)

(11) Pamela Constable and Arturo Valenzuela, A Nation of Enemies: Chile under Pinochet (New York, NY: Norton, 1991)

(12) . Many of the most prominent UDI cadres emerged from the gremialistas of the Universidad Católica. They were led by Jaime Guzmán, who became a prominent founder and leader of the party.

(13) Arturo Valenzuela, “The Breakdown of Authoritarian Regimes: Chile,” in The Breakdown of Democratic Regimes, ed. Juan Linz and Alfred Stepan (Baltimore, MD: Johns Hopkins University Press, 1991)

(14) . Valenzuela, “Government and Politics.”

(15) J. Samuel Valenzuela, “Orígenes y transformaciones del sistema de partidos en Chile,” Estudios Públicos 58 (Fall 1995)

(16) . Although the PC reached 5 percent of the vote in the 2005 parliamentary elections, its support has not translated into congressional seats due to Chile’s binomial electoral system (discussed in the following pages).

(17) J. Samuel Valenzuela, “Reflexiones sobre el presente y futuro del paisaje político chileno a partir de su pasado,” Estudios Públicos 75 (Winter 1999), 275

(18) . The index was calculated based on each individual party’s share of the vote. A calculation based on alliances instead of parties results in an even lower volatility score.

(19) Valenzuela and Scully, “Electoral Choices and the Party System in Chile,” 515

(20) Angell, “Party Change in Chile in Comparative Perspective.”

(21) Valenzuela and Scully, “Electoral Choices and the Party System in Chile,” 520

(22) Biblioteca del Congreso Nacional de Chile, Reseña biográfica parlamentaria de Francisco Javier Errázuriz (Santiago, Chile: Biblioteca del Congreso Nacional de Chile, 2008)

(23) David Altman, “Political Recruitment and Candidate Selection in Chile (1990–2003): The Executive Branch,” in Pathway to Power in Latin America, ed. Scott Morgenstern and Peter Siavelis (University Park, PA: Penn State University Press, 2008)

(24) Gerardo Munck, “Democratic Stability and Its Limits: An Analysis of Chile’s 1993 Elections,” Journal of Inter-American Studies of World Affairs 36: 2 (1994), 3

(25) . “Marco Enríquez-Ominami abre la puerta a su renuncia del PS,” La Nación, January 19, 2009.

(26) . The Concertación leadership closed ranks behind Frei, in spite of Enríquez-Ominami’s lineage: he is the biological son of Miguel Enríquez—the leader of the Movimiento de Izquierda Revolucionaria (MIR) and key actor in the underground resistance to the dictatorship until his murder. Enríquez-Ominami is also the adoptive son of former Socialist Party notable, Senator Carlos Ominami.

(27) Valenzuela and Scully, “Electoral Choices and the Party System in Chile.”

(28) Valenzuela, “Government and Politics.”

(p.244) (29) Valenzuela and Scully, “Electoral Choices and the Party System in Chile,” 524

(30) Valenzuela, “Government and Politics.”

(31) Scully, “Reconstituting Party Politics in Chile,” 122

(32) . Ley Orgánica Constitucional sobre Votaciones Populares y Escrutinios (Ley No. 18.700) May 6, 1988.

(33) Claudia Heiss and Patricio Navia, “You Win Some, You Lose Some: Constitutional Reforms in Chile’s Transition to Democracy,” Latin American Politics and Society, 49:3 (2007)

(34) John Carey and Peter Siavelis, “Insurance for Good Losers and the Survival of Chile’s Concertación,” Latin American Politics and Society, 47:2 (2005), 4

(35) Carmen Fariña, “Génesis y significación de la Ley de Partidos Políticos,” Estudios Públicos 27 (1987)

(36) Timothy Scully, “Chile: The Political Underpinnings of Economic Liberalization,” in Constructing Democratic Governance, ed. Domínguez and Lowenthal (Baltimore, MD: Johns Hopkins University Press, 1996), 111

(37) . “El Congreso Pleno aprobó las 58 reformas constitucionales,” El Mercurio, August 21, 2005.

(38) . Scully, “Chile: The Political Underpinnings of Economic Liberalization,” 112.

(39) David Altman, “Political Recruitment and Candidate Selection in Chile (1990–2003): The Executive Branch,” in Pathway to Power in Latin America, ed. Scott Morgenstern and Peter Siavelis (University Park, PA: Penn State University Press, 2008)

(40) . In 2005 the withdrawal of candidates initially intending to run against Michelle Bachelet obviated the need for an open primary.

(41) . Hess and Navia, “You Win Some, You Lose Some: Constitutional Reforms in Chile’s Transition to Democracy.”

(42) . Carey and Siavelis, “Insurance for Good Losers and the Survival of Chile’s Concertación,” 4.

(43) . In the context of the Concertación’s governments, Carey and Siavelis have made reference to the partido transversal (transversal party) as an “informal, though well recognized, cadre of supra-party elites whose loyalty lies as much with the Concertación coalition as with their individual parties.” Carey and Siavelis, “Insurance for Good Losers and the Survival of Chile’s Concertación,” 7.

(44) . Author’s interview with former Minister of the General Secretariat of the President, Álvaro García Hurtado, June 10, 2009.

(45) Arturo Valenzuela and Lucía Dammert, “Problems of Success in Chile,” Journal of Democracy, 17:4 (2006), 70

(46) . Author’s interview with Pamela Figueroa, director of the office of governability, Ministry of the Interior, June 19, 2009.

(47) . Heiss and Navia, “You Win Some, You Lose Some: Constitutional Reforms in Chile’s Transition to Democracy.”

(48) Rossana Castiglioni, “Cambios y continuidad en política social,” in Gobierno de Ricardo Lagos, ed. Roberto Funk (Santiago, Chile: Universidad Diego Portales, 2006)

(49) . Author’s interview with Senator Carlos Ominami, June 5, 2009.

(50) . This view was reiterated in interviews with fomer Minister Álvaro García Hurtado, former Minister and Senator Carlos Ominami, and by Jorge Frei Toledo, former adviser to Lagos between 2003 and 2006 and deputy minister of justice under President Bachelet.

(51) . Designated senators were eliminated following a constitutuional reform that came into force on March 11, 2006, the last day of Lagos’s presidency.

(p.245) (52) . Author’s interview with Francisco Javier Díaz, office of the president’s director of public policy, member of the Socialist Party’s Directorate, and speech writer and adviser to Michelle Bachelet, June 5, 2009.

(53) Scully, “Chile: The Political Underpinnings of Economic Liberalization,” 103

(54) . In the 1989 Senate election, Andrés Zaldívar beat Lagos by less than 1 percent as the Concertación candidate. Lagos would beat Zaldívar in a primary for the presidential nomination in 1999.

(55) . Before serving in this capacity, he became the minister of education (1990–1992) in Patricio Aylwin’s administration.

(56) . Alvear withdrew her candidacy before the primary could take place. “Precandidata Soledad Alvear abandonó la carrera presidencial,” El Mercurio, May 24, 2005.

(57) . The predictability of the opposition is a crucial distinction between the Chilean and Brazilian systems. In Chile, the policy positions of the opposition are extremely predictable, compared to more fluid legislative positions in Brazil.

(58) Scully, “Chile: The Political Underpinnings of Economic Liberalization,” 111

(59) Valenzuela and Dammert, “Problems of Success in Chile,” 70

(60) . Aguero, “Chile: Unfinished Transition and Increased Political Competition,” 51.

(61) . “Lagos promulga TLC con Estados Unidos,” El Mercurio, December 4, 2003.

(62) . “Debate en el Senado: ni panacea ni tragedia,” El Mercurio, October 23, 2003.

(63) . Transcript of the 48th Ordinary Session, Chilean Senate, April 13, 2004.

(64) . “Congreso aprueba ley que crea programa Chile Solidario,” La Tercera, April 15, 2004.

(65) Volker Frank, “Politics without Policy: The Failure of Social Concertation in Democratic Chile 1990–2000,” in Victims of the Chilean Miracle, ed. Peter Winn (Durham, NC: Duke University Press, 2004), 91

(66) . In a significantly watered down version of his labor reform bill, Lagos faced difficulty in getting the Christian Democrats on board. “Senado aprobó finalmente ayer el proyecto en su último trámite constitucional,” La Tercera, September 12, 2001.

(67) Fernando Durán-Palma, Adrian Wilkinson, and Marek Korcynski “Labour Reform in a Neo-Liberal ‘Protected’ Democracy: Chile 1990–2001,” International Journal of Human Resource Management 16:1 (2005), 72–73

(68) . Author’s interview with Francisco Javier Díaz, office of the president’s director of public policy, member of the Socialist Party, and President Bachelet’s adviser and speechwriter, June 5, 2009.

(69) . In May 1983, amid discontent among the middle and working classes because of the economic crisis, national protests erupted. The protest was led by the copper workers union and resulted in massive demonstrations. Subsequent protests were organized on a monthly basis.

(70) Eduardo Silva, “Capitalist Regime Loyalties and Redemocratization in Chile,” Journal of Interamerican Studies and World Affairs, 34:4 (1993), 96

(71) . Silva, “Capitalist Regime Loyalties and Redemocratization in Chile,” 96.

(72) . Author’s interview with Jorge Frei Toledo, adviser to Ricardo Lagos and former deputy minister of justice, June 30, 2009.

(73) Patricio Meller, “Consideraciones económicas en torno al gobierno de Ricardo Lagos,” in El Gobierno de Ricardo Lagos, ed. Robert Funk (Santiago, Chile: Universidad Diego Portales, 2006)

(74) . World Bank, World Development Indicators, 2011.

(p.246) (75) United Nations Economic Commission for Latin America (ECLAC), Preliminary Overview of the Economies of Latin America and the Caribbean, 2010 (Chile: UN Economic Commission for Latin America and the Caribbean, 2011)

(76) . Patricio Navia, “La aprobación presidencial en el sexenio de Lagos,” in El gobierno de Ricardo Lagos: La nueva vía chilena hacia el socialismo, ed. Roberto Funk, (Santiago: Universidad Diego Portales, 2006), 23; Valenzuela and Dammert, “Problems of Success in Chile,” 66.

(77) Andrés Allamand, El Desalojo: Por qué la Concertación debe irse en el 2010, (Santiago de Chile: Aguilar, 2007)

(78) Arturo Valenzuela, “Government and Politics.”

(79) . It must be noted that wealth inequality increased along with GDP growth throughout the Pinochet regime.

(80) Eduardo Silva, “From Dictatorship to Democracy: The Business-State Nexus in Chile’s Economic Transformation, 1975–1994,” Comparative Politics, 28:3 (1996): 304

(81) Eduardo Silva, “Capitalist Regime Loyalties and Redemocratization in Chile,” Journal of Interamerican Studies and World Affairs, 34:4 (1992–1993), 84

(82) . Silva, “From Dictatorship to Democracy: The Business-State Nexus in Chile’s Economic Transformation, 1975–1994,” 305.

(83) Eduardo Silva, “Capitalist Coalitions, the State, and Neoliberal Economic Restructuring: Chile, 1973–88,” World Politics, 45:4 (1993)

(84) . For example, Modesto Collados was president of the construction chamber and later became finance minister.

(85) Patricio Silva, “Technocrats and Politics in Chile: From the Chicago Boys to the CIEPLAN Monks,” Journal of Latin American Studies 23: 2 (1991)

(86) Jeffrey Puryear, Thinking Politics: Intellectuals and Democracy in Chile (Baltimore, MD: Johns Hopkins University Press, 1994)

(87) . Author’s interview with José Jara, Director of FLACSO Chile, June 3, 2009.

(88) . Silva, “From Dictatorship to Democracy: The Business-State Nexus in Chile’s Economic Transformation, 1975–1994.”

(89) Jonathan Barton, “State Continuismo and Pinochetismo: The Keys to the Chilean Transition,” Bulletin of Latin American Research, 21:3 (2002), 370

(90) Barton, “State Continuismo and Pinochetismo: The Keys to the Chilean Transition.”

(91) . This office was created by President Aylwin and performs similar functions as the US president’s chief of staff.

(92) . Chicago Boys is the name given to the team of University of Chicago-educated economists appointed to key economic positions during the Pinochet government.

(93) . Author’s interview with Álvaro García Hurtado, June 18, 2009. For a comparison of Lagos’s and Lavin’s campaigns see “Lavín vs Lagos,” El Mercurio (Chile), October 9, 1999.

(94) . Matthew Shugart and John Carey, Presidents and Assemblies (New York, NY: Cambridge University Press, 1992); Peter Siavelis, “Exaggerated Presidentialism and Moderate Presidents: Executive Legislative Relations in Chile,” in Legislative Politics in Latin America, ed. Morgenstern and Nacif (New York, NY: Cambridge University Press, 2002); John Carey, “Parties and Coalitions in (p.247) Chile in the 1990s,” in Legislative Politics in Latin America, ed. Morgenstern and Nacif (New York, NY: Cambridge University Press, 2002).

(95) . Siavelis, “Exaggerated Presidentialism and Moderate Presidents: Executive Legislative Relations in Chile,” 81.

(96) . Author’s interview with Pamela Figueroa, June 19, 2009.

(97) Peter Siavelis, “La lógica oculta de la selección de candidatos en las elecciones parlamentarias chilenas,” Estudios Públicos 98 (Fall 2005)

(98) . Author’s interview with Francisco Javier Díaz, office of the president’s director of public policy, member of the Socialist Party, and President Bachelet’s adviser and speechwriter, June 5, 2009.

(99) . Siavelis, “Exaggerated Presidentialism and Moderate Presidents: Executive Legislative Relations in Chile,” 106.

(100) . Chile’s state-owned enterprise, Corporación Nacional del Cobre de Chile (CODELCO), is the world’s largest copper producer, controlling 20 percent of the world’s total reserves.

(101) . DIPRES, “Director de Presupuestos Informa sobre Ejecución Presupuestaria del Gobierno Central y Activos Financieros del Tesoro Público de 2006,” Press Release, January 31, 2007.

(102) . Although the extraction of copper could have different effects on policy makers than the extraction of other natural resources, there is no distinction made in the resource dependence literature. See for example Sachs and Werner, “The Curse of Natural Resources.”

(103) Helia Henríquez Riquelme, “Las Relaciones Laborales en Chile” in El modelo chileno, eds. Paul Drake and Ivan Jaksic (Santiago de Chile: LOM Ediciones, 1999)

(104) Volker Frank, “The Elusive Goal in Democratic Chile: Reforming the Pinochet Labor Legislation,” Latin American Politics and Society 44:1 (2002)

(105) Daniel Nuñez and Antonio Aravena, “El gobierno de Ricardo Lagos ¿avanzan los trabajadores?” Revista Laboral ICAL, Instituto de Ciencias Alejandro Lipschutz, Santiago, Chile (April–June 2005)

(106) Frank, “The Elusive Goal in Democratic Chile: Reforming the Pinochet Labor Legislation.”

(107) . El Mercurio, “Las áreas pendientes de Lagos en leyes económicas,” May 16, 2005.

(108) Juan Pablo Luna and David Altman, “Uprooted but Stable: Chilean Parties and the Concept of Party System Institutionalization,” Latin American Politics and Society 53:2 (2011)