Chile: Education and Neoliberal Economic Policies


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The amazing story about how the University of Chicago and the Chicago boys changed the course, economy and history of Chile.

  • Sure, a teetering economy was stabilized in Chile, however, I'm in Argentina, which had its own dictatorship issues forcing neoliberal policies. I recently visited a school that was used to torture dissidents of the regime and even spoke with one of the survivors. After hearing the sordid details of beatings, rapes, spreading terror and mass killings all in the name of neoliberalism, I'm not so sure the end justifies the means.
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Chile: Education and Neoliberal Economic Policies

  1. 1. Chile: Education andNeoliberal Economic Policies By:Nelly Cardinale EDU 7260 Comparative International/Global Higher Education 11/06/2011
  2. 2. Origins of Neoliberal Policies• According to Valdés(1995) in 1955 – the Pontifical Catholic Univ of Chile and the Univ of Chicago created a joint collaborative doctoral level economics degree program. – The program offered educational grants for students who were admitted (Valdés,1995). • The plan was a response to a act passed by the US Federal Agency for International Development meant to provide aid for developing countries and was titled,”Project Chile” (Valdés, 1995). – Project was initially funded by the Ford Foundation, the International Co-operative Alliance (ICA) and the Rockefeller Foundation (Valdés, 1995).
  3. 3. Origins of Neoliberal Policies• The purpose of the doctoral program was to teach neoliberal economic principals which advocate free-market policies and the transfer of former government regulated services to private industry (Silva,1991;Valdés,1995 ).• The intended outcome was for the newly trained economists to introduce reforms that would revive the economy of Chile(Valdés,1995). – Between 1955 and 1963, thirty students took advantage of the grants, traveled to Chicago to study and became know as the, "Chicago Boys” (Silva,1991). • In 1973, a oppressive military style government took over in Chile. The government leader appointed the Chicago Boys to key government positions in Chile (Valdés,1995).
  4. 4. List of the Chicago Boys(Notice that there is one female on the list).
  5. 5. Origins of Neoliberal Policies• One of the educators in the joint Pontifical Catholic Univ of Chile and the Univ of Chicago program was the famous economist, Milton Friedman, who won a Nobel Memorial Prize in Economic Sciences in 1976.
  6. 6. Origins of Neoliberal Policies• Another educator in the joint Pontifical Catholic Univ of Chile and the Univ of Chicago program was the famous economist, Gary S. Becker, who also won a Nobel Memorial Prize in Economic Sciences in 1992
  7. 7. Economic Neoliberal Reforms during the 1970s• According to Taylor (2003) the Chicago Boys spearheaded the following changes: – Privatized the health industry (Taylor, 2003). – Introduced international agricultural trade (Taylor, 2003). – Proposed labor laws that mandated raises tied to inflation (Taylor, 2003). – Disbanded collective bargaining units (Taylor, 2003). – Allowed workers to chose traditional Social Security or privately run IRA’s(Edwards & Edwards, 2002).
  8. 8. Results of the Economic ReformsSource: ChartsWorld Bank: World development indicators for Chile 2002
  9. 9. Economic Results• According to the Organization for Economic Co-operation and Development (OECD) website(2010), the country of Chile became the first South American country to join it’s membership on Jan-11-2010. – This organization is comprised of 34 countries which have the richest economies in the world. • The purpose of the organization is so that governments of these countries can work together to solve common worldwide economic, social and environmental problems • Most of the members are developed countries – however Chile was invited and joined as a developing country
  10. 10. Current members of OECDSource: Table OECD Website
  11. 11. The President of Chile during the OECD Ceremony Source:Photo OECD Website President Michelle Bachelet accepts the official OECD membership certificate during a ceremony held in the White House of Chile on Jan 11th, 2010. She is also a pediatrician and her presidential term ended March 11th, 2010.
  12. 12. The New President of Chile• The new president is Sebastián Piñera and he started in March 2010. – According the Harvard Gazette website he: • is a former college professor of Economics who earned his doctorate from Harvard University. • plans to elevate the Chile’s status of a developing country to a developed country by the end of this decade • is allocating four billion dollars to education in order to update the technology systems in both the K-12 and higher education school institutions. Source: Photo Harvard Gazette Website
  13. 13. 1980’s K-12 School Reforms• The Chicago boys also: – Decentralized the schools and gave the control to municipalities (Taylor, 2003)• Taylor (2003) states that they Implemented a new Voucher System which: • created and funded new voucher-based private schools • funded traditional public schools using vouchers
  14. 14. 1980’s K-12 School Reforms• According to Carnoy (1997) the voucher plan also eliminated : – teacher unions and contracts at all schools – national curriculum standards• This new system: – paid money directly to schools based on parental choice(Taylor,2003). – did not affect traditional private tuition- based schools (Silva, 1991). – allowed the voucher-based private schools to charge fees in addition to the vouchers (Carnoy, 1997).
  15. 15. 1990’s K-12 School Reforms• According to Foxley(2004) in 1991, the school day was extended to 8 hours – teachers were given raises to compensate for the extra working hours.• faculty unions were restored• tenure was restored for teachers and school educators• computers and Internet service provider contracts were purchased by the government for all schools.
  16. 16. Success of Voucher Schools in Chile• According to Mizala and Torche(2010), the k-12 private-voucher supported schools have only been moderately successful in raising academic achievement when compared to traditional private- tution based schools.
  17. 17. Higher Education Reforms• According to Espinosa (2002) in 1981, the Chicago boys proposed that: – students be offered loans instead of grants and scholarships – college tuition and fees be implemented for the first time – the country encourage and approve the creation of private institutions of higher education – higher education institutions solicit donations and take out loans as additional funding sources – the country reduce the tax revenue usually allocated to help support public universities
  18. 18. Higher Education Structure• According to Ramírez (2005) in 2002, five types of higher education institutions existed in Chile. Source: Chart © Nelly Cardinale Created with Data from (Ramírez, 2005).
  19. 19. Higher Education StructureSource: Graphic OCIDES Tertiary Education in Chile 2009
  20. 20. Higher Education Undergraduate Enrollment 2005• According to the Chilean Ministry of Education website, in 2005, the higher education undergraduate enrollment rates were:
  21. 21. For-profit Institutions• Ramírez (2005) further asserts that in 2000, Laureate Learning (formally Sylvan) bought out the,”University of the Americas”. – However, according to Kinser and Levy(2005), • Chile does not permit universities to operate as for-profit institutions, therefore this institution continues to be a private non-profit college. • In contrast, most of the professional institutes, voucher- supported private schools and centers for technical training centers in Chile are currently classified as for-profit institutions.
  22. 22. First Community College• According to Li(2010) – the first community college was created with the help of LaGuardia Comm College of NY and is currently run by the Central Univ of Chile and located inside its’ campus • students can apply the credits towards the pursuit of a four year degree at Central Univ – students earn Associate Degrees from both colleges – the joint degree program offers exchange opportunities for both faculty and students – the program is meant to remove the stigma of attending a center for technical training – it is more affordable than attending a technical training school that are usually for-profit institutions.
  23. 23. First Community College• According to Li(2010) the college’s executive director hopes that the program will help facilitate social mobility for many students and help meet the employee needs of local industry. – According to the Community College of Santiago (n.d.) the majors offered are: • Network security and administration • Programming • Telecommunications • Business Management • Accounting
  24. 24. Internationalization of Higher Education• According to Ramírez (2005) in 2003 the universities in Chile had active collaborative educational agreements in many parts of the world:Source: Table (Ramírez, 2005).
  25. 25. Pressing Contemporary Issue• According to Bernasconi (2007) in 2006 Chile finally signed a act called the Quality Assurance Act (QAA). – This act will create a uniform system for accreditation for all of the higher education institutions in the country. • Participation in the system will be voluntary except for undergraduate programs in the health and education fields. • The system is two-tier with a public national education commission licensing and supervising private companies in charge of the institutional evaluations.
  26. 26. Pressing Contemporary Issue• According to The Economist (2011) for the last five months, both high school and college students have been protesting: – They want control of the entire education system turned over to the Chilean government – They are demanding more government spending on education. Currently • the Chilean government pays 15% of the total percent of education costs which is the lowest of all of the OECD countries. • 40% of all education expenses are paid for by families which is the highest amount when compared to the other OECD countries.
  27. 27. Pressing Contemporary Issue• The Economist (2011) further reports that in the case of a college education, the students are demanding: • the end of college tuition and fees • loans issued by the government instead of local banks• The Times Higher Education(2011) also reports that – high schools students were the first set of protesters demanding better quality secondary schools. – college students want better quality assurance standards for both college and technical learning centers • It is apparent that the QAA has not yet been formalized – College students are demanding the end of for-profit higher education institutions – Even though regular universities and colleges in Chile cannot legally become non-profit, students complain that the colleges use tax loop holes to make a profit.
  28. 28. Government Response• According to Merco Press(2011) – the president of Chile is proposing a 4 billion dollar budget to be applied towards education. • it will be mostly funded from the sale of copper which is Chiles’ primary export.• According to Times Higher Education(2011), the president: – is proposing the creation of new scholarships for students from the lowest income families • the students do not seem satisfied with this proposal• According to Al Jazeera(2011) – the Chilean government plans to create a commission of experts which will study the issue and recommend a solution
  29. 29. The Protests are Still Ongoing• According to Al Jazeera(2011) the protests are now getting violent – On Thursday October 6th, 2011, police used tear gas and water canons to stop the protesters. • as a result, several bystanders and some members of the media were injured.• According to Times Higher Education(2011), the protest is very likely to end soon regardless of the outcome: – since students cannot afford to continue to skip classes without the risk of academic failure.
  30. 30. Similarity to the Occupy Movement in the US• The Chilean students’ protests are similar to the Occupy movement in the US. – In both cases: • students and others are protesting about the high cost of higher education. • people want free higher education and interest free loans for related expenses. • students demand that education loans be issued by the government and not by commercial banks. – Both protests are really about social and financial inequalities.
  31. 31. An Image from the Occupy MovementSource: Photo The Examiner Website
  32. 32. An Image from theChilean Student ProtestSource: Photo Sulekha News Hopper
  33. 33. Conclusions and Implications• It is a great surprise to find out that Chile which is a developing country was and still is ahead on its’ time when it comes to higher education globalization and internalization. – In contrast US colleges and universities are playing catch up• Chile is also ahead of us in gender inequality – our country has yet to elect a female president• We can learn from Chile about voucher school programs which are similar to charter schools in the US. – After all of these years, the voucher program there has not significantly raised student achievement, therefore it seems likely that charter schools systems in the US may also not be the answer to low student achievement.
  34. 34. Conclusions and Implications• It is interesting that a decade after Chile eliminated collective bargaining and tenure for educators, it restored them. – Perhaps this is an institution that the US should not consider eliminating in any way.• It is obvious that educational internalization efforts between the University of Chicago and the Pontifical Catholic Univ of Chile changed the course and history of Chile. • I do not think that this country would have become a member of OECD if it were not for the, “Chicago Boys”. • I also believe that Chiles’ economic success caused other countries to also adopt neoliberist policies and that these changes altered the course and economies of many other countries in the world. – This is the most compelling reason why US higher education institutions should continue internationalization efforts, it may be the catalyst that changes the world, one country at at time.
  35. 35. ReferencesBernasconi, A. (2007). Accreditation versus proliferation. International Higher Education. 47(1),16-17.Carnoy, M. (1997, February). Is privatization through education vouchers really the answer? :a comment on West. The World Bank Research Observer, 12(1), 105-116.Carroll, C. (2011, October 11). Union blocks cheaper college degrees. Photo. The Examiner Washington. Retrieved from cheaper-college-degreesCentral University of Chile (n.d.). Community College of Santiago. Retrieved from students protest pictures and photos (2011, August 18). Photo. News Hopper. Retrieved from students protest after failed talks thousands march through the streets of Santiago after their demands for education reform go unmet. (2011, October 6). Aljazeera. Retrieved from
  36. 36. Chile’s Piñera tries to appease student protests: 4 billion USD for higher education (2011, June 6). Merco Press. Retrieved from tries-to-appease-student-protests-4-billion-usd-for-higher-educationDélano, M., & Traslaviña. H. (1989). La herencia de los Chicago boys. Santiago, Chile:Ornitorrinco.Espinoza, O. (2008). Creating (in) equalities in access to higher education in the context of structural adjustment and post-adjustment policies: the case of Chile. Higher Education, 55(1),269-284.Edwards, S., & Edwards, A.C. (2002). Social Security privatization reform and labor markets: the case of Chile. Economic Development and Cultural Change, 50(1),465-489.Foxley, A. (2004, April). Successes and failures in poverty eradication. Paper presented at Scaling Up Poverty Reduction Conference, Shanghai, China.Jump, P. (2011). Student protesters march on to root out Chiles false profits. Time Higher Education. Retrieved from sectioncode=26&storycode=417904&c=1Li, S. (2010). Chiles first community college remakes technical educations image. Chronicle of Higher Education, 57(12), A26.
  37. 37. Ministry Of Education: Division Of Higher Education, Chile (1999). Comprehensive 1997-1999. Santiago, Chile: MINEDUC. Retrieved from, A., & Torche, F.(2012) Bringing the schools back in: the stratification of educational achievement in the Chilean voucher system. International Journal of Educational Development, 32(1), 132-144.Mizala, A., & Torche, F.(2012) Bringing the schools back in: the stratification of educational achievement in the Chilean voucher system. Diagram. International Journal of Educational Development, 32(1),, Gary S. Becker - Autobiography. Retrieved from (2005). Milton Friedman - Autobiography. Retrieved from About Home (n.d.) Members and partners. Retrieved from,3417,en_36734052_36761800_1_1_1_1_1,00.html
  38. 38. OECD Newsroom Home (2010). Chile signs up as first OECD member in South America. Retrieved from,3746,en_21571361_44315115_44365210_1_1_1_1,0 0.htmlOCIDES, & Rivera, E. (2009). OECD-Chile, policies, entry rates and funding in tertiary education. Retrieved from OECD_-RIVERA-EDUARDO-20092.pdfPowell, A. (2011). Chiles president pushes progress Piñera aims for fully developed nation by decade’s end. Harvard Gazette. Retrieved from’s-president-pushes-progress/Ramírez S. C. (2005). Internationalization of Higher Education in Chile. In H. De Wit, I. Jaramillo, J. Gacel-Avila, J. Knight (Eds.) , Higher Education in Latin America: The International Dimension (pp. 149-173). Washington, DC:The World Bank.Silva, P. (1991). Technocrats and politics in Chile:from the Chicago boys to the CIEPLAN monks. Journal of Latin American Studies, 23(2), 385-410.Taylor, M. (2003) The reformulation of social policy in Chile, 1973-2001: questioning a neoliberal model. Global Social Policy, 3(1), 21-44.
  39. 39. The fraught politics of the classroom deadlock over who should pay for education, and who should profit from it (2011, October 29). The Economist. Retrieved from (2011). U.S. Agency for International Development. Retrieved from (2009). University of the Americas. Retrieved fromés, J. G. (1995). Pinochets economists: the Chicago school in Chile. New York, NY: Cambridge University Press.World Bank Working for a World Free of Poverty (2011). World Development Indicators for Chile 2002. Retrieved from