Poverty, inequality, and welfare in a rapid-growth economy

The Chilean experience

Chile is maturing politically and becoming a more modern and globalized society. The country’s current priority is to ensure more equitable distribution of economic growth and overall opportunities, which depends on the government’s ability to improve public policy and expand its reach. By international standards, Chile has a high level of income inequality (being among the 50 percent of Latin American countries with the highest levels). Though poverty has declined significantly since the early 1990s, the risk of people falling into poverty remains high because half the population has low household income and is subject to significant income fluctuations. Access to education has increased considerably, but socioeconomics continues to determine the opportunities available to young people. For these reasons, it is critical that the country addresses social issues in order to continue its development and use its public resources more effectively.

This brief focuses on the strategies the Chilean government has used, and is currently using, to tackle issues related to poverty, inequality, and welfare, and to address the challenges that remain. Initially, economic and social policies sought to protect and strengthen economic growth while at the same time providing basic goods and services to the neediest sectors of society through a range of targeted social policies. The resulting pro-growth reforms led to significant reductions in the country’s poverty levels, but they were not designed as social protection instruments to fully address household vulnerability or provide integrated solutions to the multiple constraints facing Chilean families.

Consequently, the government has more recently begun to focus on social protection instruments that integrate and optimize social services in order to improve service provision to the poorest groups.

Author: 
Contreras, Dante
Published date: 
2007
Publisher: 
International Food Policy Research Institute (IFPRI)
Series number: 
Special Edition
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