Growth, Poverty and Inequality: The Chilean Way

Abstract

In recent decades, Chile has shown positive economic results, with sustained growth and a significant reduction in the incidence of poverty. However, the country has not been equally successful in reducing income inequality. This is mainly due to the combination of three factors that characterize the Chilean social policy: a relatively small State, a regressive tax system, and a policy of small and highly targeted cash transfers that require beneficiaries to comply with a number of conditions. The recent implementation of transfer programs with greater coverage suggests a switch in the approach to social policy, and a step in the challenge of achieving greater equality of income.