Introduction

This book is about how free markets have affected the use of water in Chile. Since the mid-1970s Chile has become famous as the textbook case of free market economic policies. Chile’s military government (1973–1990) adopted these policies years before other countries did, applying them to a radical degree and making special efforts to institutionalize the changes for the long term. Water use is a prime example. In 1981 the military government dictated a new Water Code that transformed the country’s system of water rights: it fortified private property, introduced market mechanisms and incentives, and pared back the state’s power to regulate.