Water Rights and the Law of the Pendulum: Legal and Political History of the 1981 Water Code

The “law of the pendulum” (ley del péndulo) is a Chilean phrase that describes dramatic changes from one extreme to another. During the twentieth century such swings have been common in Chilean political and economic thought and practice, and the realm of water rights is no exception. With its 1981 Water Code, Chile’s military government swung the pendulum away from the “statist” policies of the preceding decades, which had culminated in the 1967 Agrarian Reform Law that greatly expanded state authority over water use.1 The 1981 Code aimed to reverse that trend by strengthening private property, increasing private autonomy in water use, and favoring free markets in water rights to an unprecedented degree. It created several market mechanisms, based on separating water rights from land ownership, and attempted to foster a market mentality among water users. As a corollary it sharply reduced the state’s role in water management and regulation. The new Code follows the institutional structure of the 1980 Constitution, and like the Constitution it was written and approved while neoliberal ideology in Chile was at its most ascendant, before being somewhat discredited by economic crisis (see Chapter Two).