Chileans will head to the polls on Sunday to approve or reject a proposal for a new constitution, which The Economist has described as “a fiscally irresponsible left-wing wish list.”
As I mention in my latest video for Reason, the new constitutional draft bans “job insecurity,” expands welfare programs, mandates gender parity in all public institutions, and grants “social” rights to fund healthcare, housing, and education services. There is little or no regard for the question of who will pay these exorbitant bills. The new constitution also fails to mention or protect mining concessions, a pillar of the current system that has attracted private investment and allowed Chile to become the world’s leading exporter of copper and one of the top producers of lithium.
With its legal instability in mining and other key sectors, the new regime would endanger Chile’s model of economic development, which has delivered astounding results in just a few decades. As recently as 1970, Chile was “the poorest among Latin America’s large and medium-sized countries” according to a Library of Congress country study. Now, however, Chile has one of the region’s highest per capita GDP’s. In 2014, a mere 8 percent of its population was poor compared to 45 percent in 1982. In 2018, Chile led the OECD in social mobility.
I spoke about Chile’s achievements with Natalia González, a constitutional law expert at Libertad y Desarrollo, a Chilean think tank, in this week’s episode of Cato’s Spanish-language podcast. The country’s current constitution, she explains, assigns a limited role to the state, prioritizing instead the liberty of individuals, associations, and families. This basic framework of limited government lies at the root of Chile’s prosperity.
Although the current constitution’s origins date back to the military regime of Augusto Pinochet, most of Chile’s considerable progress has taken place since the return of democracy in 1989. In fact, the successive governments of the “Concertación,” a coalition of center-left parties that governed between 1990 and 2010, introduced over 100 constitutional reforms.
In its current state, González says, the constitution mostly reflects the influence of former president Ricardo Lagos, a social democrat who held office from 2000 to 2006. Chile’s extreme left, however, targeted the constitution in a series of violent protests in 2019. Then, in a 2020 referendum, 78 percent of voters chose to summon a new constitutional assembly, which came up with the proposal to expand the state’s power drastically instead of constraining it.
Voters, however, seem to be experiencing buyers’ remorse, with most polls suggesting that a majority will reject the new constitution on Sunday. If they do, the current constitution will remain in place, albeit only for some time. Chile’s entire political class, González says, including parties of the center-right, has convinced itself that a new constitution of some type is necessary.
President Gabriel Boric, a 36-year-old left-winger who launched his political career by leading student protests, has threatened with summoning yet another constitutional assembly if voters reject the draft on Sunday. His opponents prefer to change the constitution through Congress, which is likely the better option. Either way, however, years of legal and economic uncertainty await the one Latin American country that, until recently, was on an exceptional path toward development.