The Chilean big business lobby: a long‐standing and major influence on public policy

Date01 November 2014
Published date01 November 2014
Special Issue Paper
The Chilean big business lobby: a long-
standing and major inuence on public
Hernán Rodríguez Fisse
*and Clive S. Thomas
Department of Administration, Universidad de Santiago de Chile, Santiago, Chile
Foley Institute, Washington State University, USA
Elements of the business lobby, particular sectors of big business and its peak associations, have been a continual
inuence, sometimes a dominant force, in Chilean politics since the second half of the 19th century. This prominence
and sustained inuence is particularly noteworthy since the 1930s, given the various forms of democracy experienced
in Chile, the harshmilitary dictatorship of the 1970s and 1980s, andbecause the return to democracyin 1990 has meant
increasing competition among interest groups. This article offers an explanation of the political signicance of the big
business community by reference to both common factors that shape the inuence of business across political systems
and especially the developments in Chilespolitical economy. Copyright © 2014John Wiley & Sons, Ltd.
Business is among the most inuential interests in
all democracies and in many authoritarian regimes.
Many social democracies nationalize large segments
of business, however, and this often limits its politi-
cal inuence; and if authoritarian regimes do not
nationalize business, they often place major political
constraints upon it through various forms of state
corporatism. The Chilean case provides an example
of big business taking advantage of political circum-
stances and working to create a political atmosphere
conducive to its interests that enabled it to remain
inuential and relatively politically independent
during eras of both dictatorship and democracy.
Although this may not be unique in a global con-
text, it is unusual in the Latin American experience.
The big business lobby was not always united,
however, with periods of internal conict, particu-
larly between sectoral interests and its business-wide
peak association. Nevertheless,big business was able
to achieve continual political success because it
placed its economic interests above all else and was
willing to go to virtually any lengths to protect these
interests. Over the years, big business moved from
organizing for self-help purposes to a traditional
politicaldefense of its corporate interests,to a rst-line
political force that, in effect, replaced the role of
right-wing political parties in Chilean politics. Big
businesss adaptability and resilience involved an
amoral pragmatism that, while it produced political
success, undermined Chilean democracy for many
years, and the vestiges of this inuence on the
political system are evident in contemporary Chile.
In the particulars of its case, the role of big busi-
ness in Chilean politics provides a good example
of not only the way that interest group activity often
displays common elements across political systems,
but also how national circumstances can affect these
common elements to produce a unique situation.
This article uses the two-part approach of common
elements of interest group inuence combined with
the effect of national circumstances to explain the
Chilean case of the perennial and major inuence
of big business.
*Correspondence to: Hernán Rodríguez Fisse, Department of
Administration, Universidad de Santiago de Chile, Alameda del
Libertador Bernardo OHiggins 3363, Santiago, Chile.
Journal of Public Affairs
Volume 14 Number 3 pp 310330 (2014)
Published online 16 June 2014 in Wiley Online Library
( DOI: 10.1002/pa.1520
Copyright © 2014 John Wiley & Sons, Ltd.
To provide background for the analysis, the rst
section outlines the development of Chiles political
economy. Building on this background, the article
turns to the inuential elements of the business
lobby and an explanation of its power base over
the years. This includes the following: an explana-
tion of the development of the big business lobby
in the context of the evolution of the Chilean group
system; big businesss special place and treatment
by the Pinochet dictatorship and the democratic
government since 1990; and an analysis of big
business inuence over the years, melding theory
and the practical circumstances of Chilean political
development. Then comes an assessment of the
broader inuence of the business lobby on Chilean
democracy. The conclusion briey explains why
businesss political role and inuence in Chile is a
textbook case of interest group inuence.
A random survey of people outside Chile in 2014
asking what comes to mind when Chile is men-
tioned would likely reveal ve images that more
or less encapsulate the nations past and present
political economies. Two would likely be copper
mining and wine. Together, they broadly represent
Chiles agro-mining economic base past and
present. The third would probably be General
Augusto Pinochet, the ruthless dictator who ran
the country for most of the 1970s and 1980s and
who symbolizes Chiles periods of authoritarianism.
The fourth and fth images might likely be of street
protests, particularly toward the end of Pinochet
dictatorship and more recently of student demon-
strations and strikes, and of Michelle Bachelet,
serving her second term as president of Chile
(201418) after her rst term from 2006 to 2010.
The protests and Bachelet epitomize the move to
democracy, increased political participation, and, to
some extent, the gradual advancement of gender
equality in Chilean politics.
Contemporary Chile: a developed nation
Stretching along the Pacic Ocean with the Andes
and Argentina to the east, and short borders with
Bolivia to the northeast and Peru to the north, Chile
has rich reserves of copper, nitrates, timber, iron ore,
and precious metals. A s a coastal nation, shing and
sh processing have always been a major industry.
Other industries include foodstuffs, iron and steel,
wood and wood products, transport equipment,
cement, and textiles. The countrys main exports are
copper, fruit, wine, and tulips. China, USA, the
European Union, and Japan are Chilesmainexport
partners (CIA The World Factbook, 2014). Despite a
major diversication of the economy since the 1980s,
copper is still the main industry in Chile, and the
agro-mineral economy remains predominant.
In 2010, the population was just over 17 million of
whom 90% were urbanized and predominantly
White with only a small indigenous population. Sim-
ilar to all Latin Americancountries, Catholicism is the
major religion with 70% of Chileans identifying as
Roman Catholics, 15% as Evangelical, and the rest
with other or no religion (CIA The World Factbook,
2014; World Bank, 2014).
In contrast to most Latin American countries,
however, by several measures, Chile is a developed
country. It was ranked at 53rd in 2013 regarding life
expectancy at birth and 160th in infant mortality
rates, and 99% of the population is literate (CIA
The World Factbook, 2014). Moreover, on the basis of
per capita gross domestic product (GDP), Chile is
the best-off country in Latin America. In 2012, this
per capita amount was $15 452 (equivalent to
$22 363 after taking into account purchasing power
parity on an international basis). Also, in that year,
Chiles GDP grew by 5.6%, with ination at only
1.8% (World Bank, 2014).
As Silva (2012, p. 461) puts it, recognition of
Chiles developed status came in 2010 when it was
accepted into the Organization for Economic
Cooperation and Development (OECD), the club
of developed countries. As such, it was the 31st
member of the OECD and only the second in Latin
America following Mexico that became a member
in 1994 (OECD, 2010). The previous two decades
saw Chile conclude several trade agreements. In
1994, it joined the Asia-Pacic Economic Coopera-
tion, followed by associate membership in the
Southern Cone Common Market, MERCOSUR, in
1996. A trade agreement was signed with the
European Union in 2002 and one with the US in
2003, after the US Congress had failed to act in
1997 to make Chile a member of the North Ameri-
can Free Trade Agreement (NAFTA).
A particular achievement in the period
19902010 was the reduction of poverty from 40%
to 15%. Despite this, the middle class remains rela-
tively small and inequality extensive. Chile, in fact,
has one of the most unequal income distributions
in Latin America, more so now than in the 1960s,
and the most unequal of OECD countries (World
Bank, 2014; Silva, 2012, p. 461). Much of this
inequality is the result of the years of military rule
Chilean big business lobby 311
Copyright © 2014 John Wiley & Sons, Ltd. J. Public Affairs 14, 310330 (2014)
DOI: 10.1002/pa

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