Blueprint for the Neoliberal Model: Law, Economics, and Politics in the 1980 Constitution

In recent years Chile has become internationally famous for the success of its neoliberal economic model and for its smooth political transition from a military regime to a democratic government. As summarized in the previous chapter, the military government was in power for nearly 17 years, from 1973 to 1990. During that time the government sought to radically transform Chilean political, economic, and social systems, in order to prevent a repeat of the crises of the 1960s and 1970s. The military aimed to cement the changes with a “new institutional order” (nueva institucionalidad) established in a new Constitution, which was approved in 1980 and is still in effect today. What is surprising, in view of the fame of the economic model, is that outside of Chile there has been little attention given to the model’s legal and institutional underpinnings. Analysts of the 1980 Constitution have concentrated on its political aspects, especially its authoritarian and anti-democratic features. They have largely ignored its economic significance, beyond noting the importance of political stability and secure private property rights. Nor do they mention the increased power of the courts in economic and regulatory affairs.1