José Carlos Orihuela (Brown University, EUA)
Why and how has Chile escaped the curse of mineral dependence, or abundance? Has it, really? The “curse” refers to a wide range of social phenomena resulting in poor-quality development paths: unsustainable development, volatile growth, enclave economies, conflict-prone politics, rent-seeking culture, generalized corruption, and so on (Hirschman, 1958; Auty, 1993; Sachs and Warner, 1995; Karl, 1997; Ross, 1999). As the debate has evolved, the puzzle of the resource curse is to understand why policymakers of mineral-states do not borrow and experiment wisely: while in theory failing societal patterns are all reversible, historical research shows that they commonly turn persistent (Karl, 1997). In a vicious circle, old failure feeds new failure, analysts observe. The case of Chile, however, does not fit well in such a stylized institutional resource-curse narrative. This paper answers why by analyzing the building of the modern state apparatus, showing how the institutional evolution of the state matters for the Chilean road to resource-based development.
From an evolutionary perspective of economic and political development, the use of the term “resource-curse” is purely metaphorical: conditions are not believed to determine outcomes (Hoff and Stiglitz, 2001). Yet, structural conditions are seen as likely to foster patterns and cement equilibriums. Conditions are varied, complex, and mutable. While resource-abundance/dependence may favour the reproduction of “perverse” political and economic incentives and behaviour, other structural circumstances could support the evolution of more positive development trajectories. Moreover, and maybe more importantly, conditions shape but do not determine (public) choice: human-beings can overcome their circumstances transforming challenges and weaknesses into opportunities and strengths. Hence, the understanding of cases of success or/and failure of resource-based development demands the understanding of the particular: the study of policy agency in its context, the nuts and bolts of how policymaking transforms an institutional environment. Post-colonial Chile is not only a case of resource-based progress, but also a case of strong-state evolution. The Chilean state has played central roles in national development achievements and shortcomings, intentionally or not, because it is a historical fact that the Chilean society has reproduced and re-invented strong, active, and significantly coherent national governance machinery.
This article analyzes the institutional foundations supporting the contemporary success story of good macroeconomic management of copper volatility. It classifies Chile’s state evolution in three eras: Interior (1830s-1930s), CORFO (1930s-1970s), and Hacienda (1970s-today); the engineering of ‘good governance’ in each of them is depicted in the first three sections. Section 4 shows how the historical legacy of state action mattered for the management of copper at the end of the long twentieth century. Section 5 concludes reflecting on the various forms and directions path-dependence can take, since social realm is characterized by multiple equilibria.
