January 25, 2010 [LINK / comment]
Conservatives win in Chile
For the first time since democracy returned to Chile in 1990, conservatives have won the presidential elections. (It was the second round election, actually, the first round taking place last month.) Last week, Sebastian Piñera, of the National Renewal Party, defeated Eduardo Frei, of the ruling Concertacion coalition, by a margin of 52% to 48.3%. (Frei had served as president from 1994 until 2000, and Piñera was the losing candidate in the January 2006 election, when outgoing president Michelle Bachelet won by a 53.5%-46.5% margin.) Piñera claimed he had a "mandate for change," but promised to try to work with the opposition. He has served as a senator and head of the National Renewal Party. The Washington Post describes him as a billionaire "who ranks No. 701 on Forbes magazine's list of the world's richest people." Also see CNN.com.
This marks the end of two full decades in which socialists or socialist sympathizers have led in Chile, which is one of the rare success stories in modern Latin America. Peru has emulated the free-market approach of Chile since the early 1990s, with considerable success as well. For outsiders, it may seem puzzling that a country with such great success in capitalist economic development would keep electing socialists as president. Part of the reason, obviously, is the lingering stench of authoritarianism that the Pinochet dictatorship (1973-1989) has bequeathed to the conservative movement. (Indeed, went out of his way to promise that officials who had served under Pinochet would be excluded from his cabinet.) Also, the left-leaning governments have been smart and pragmatic enough not to "kill the golden goose" that keeps their precious welfare programs funded. On the other hand, the center-left coalition had become deeply embroiled in a serious of scandals over the past several years, and some people were surprised that Bachelet avoided any public backlash over that when she won the 2006 election. The upshot is that, ironically, economic policy may not change very much in the next few years. I would expect cuts in some social and education programs, however, and there are bound to be protests against "fascists."
One of Piñera's older brothers is among those who once served in the Pinochet government. In the late 1970s and early 1980s, Jose Piñera was Secretary of Labor and Social Security, where he played a crucial role in privatizing the nation's pension system, and later as Secretary of Mining. I saw him speak at a conference at the University of Virginia Darden School of Business in the early 1990s. He wrote a small book extolling the virtues of free markets: Chile 2010: Libertad, Libertad, Mis Amigos. The latter four words are from a poem by the Nicaraguan poet Ruben Dario. It's an eerie coincidence that the title of his book coincides with the year his younger brother assumed the presidency, setting the stage for putting those free-market values into practice in Chile -- in a democratic context, for the first time!
Piñera will be inaugurated in March, presumably the first peaceful democratic transition from one party to another in Chile since the 1960s. I have partially updated the Chile background information page, clarifying that the presidential term was reduced from six years to four years in 2005, as part of a series of constitutional reforms that undid some of the lingering authoritarian features of the Pinochet era.