Chile is one of the most stable economies in Latin America. However, the lack of a comprehensive regulatory reform programme may have reduced possibilities for achieving higher economic outcomes. Most line agencies and regulators prepare regulations based on unclear evidence as to how best to intervene, and good practices in rule-making procedures are limited. In addition, the government of Chile could benefit from reinforcing and introducing regulatory management tools.

Chile is one of the most stable economies in Latin America, and has, over the last two decades, sustained economic growth and reduced poverty. Governance arrangements have contributed positively to attracting business and provided certainty for economic activities. However, the lack of a comprehensive regulatory reform programme may have reduced possibilities for achieving higher economic outcomes. Most line agencies and regulators prepare regulations based on unclear evidence as to how best to intervene, and good practices in rule-making procedures are limited. The recently launched National Agenda for Productivity, Innovation and Growth uses regulatory reform as a driver to foster its goals. The agenda includes regulatory reform measures to establish regulatory governance arrangements that support new policies and tools to improve the quality of regulation.

This chapter sets out the macroeconomic context for the review, including recent macroeconomic trends, the contribution of regulatory reform to economic performance, and the remaining challenges of the Chilean economy. Over the past 25 years the Chilean economy has become stronger, and social progress and poverty reduction have seen significant improvements. However, the economy is in a transition as prospect for copper prices have weakened and growth and investment have decelerated sharply. To sustain progress in well-being, Chile needs faster productivity growth which has stagnated. The government has introduced important steps to strengthen redistribution, improve equality of opportunities and boost productivity, including ambitious tax, labour and education reforms and a productivity agenda. These reforms go in the right direction, but there is still room to improve policies to make the regulatory framework more growth friendly and boost productivity.

Chapter 2 explains the core principles and legal instruments that set the policies the government of Chile implements to improve its regulatory quality. In doing so, it discusses the high regulatory production and the absence of a clear figure on the total national regulatory stock. The chapter recognises that regulatory reform is a relatively new concept in the Chilean administration. However and despite the fact that Chile does not have a comprehensive regulatory reform policy and programme, the government has various administrative and legal arrangements that support the preparation and implementation of regulation, as well as control quality mechanisms that frame the interventions of regulatory institutions. Finally, it describes the recent and current regulatory reform initiatives implemented by the Chilean government, highlighting the reforms done in the environmental regulation, competition advocacy, and international regulatory co-operation.

Institutions are fundamental to ensure that regulatory policy is properly implemented. This chapter starts by stating the rationale in order to aim at establishing mechanisms and institutions to promote regulatory reform, notably through oversight of regulatory policy procedures and goals. The chapter mentions the institutional set-up for regulatory governance, and also describes institutions with clear competences to promote regulatory policy in Chile. It looks at the executive branch, independent and autonomous entities, the legislative branch, and the judiciary along the constitutional court, and its co-ordination mechanisms. Finally, and of utmost importance, it describes the organisation and governance of regulatory agencies and supervisory bodies in Chile. It finishes by issuing recommendations on how to improve the set-up of the administrative architecture in order to ensure high-quality regulations.

Chapter 4 sheds light on how current processes for passing laws and subordinate regulations support the application of the core principles of good regulation. It describes and evaluates systematic capacities to generate high-quality regulation, and to ensure that both processes and decisions are transparent to the public. In doing so, it touches upon several practices implemented by other OECD countries such as forward planning, effective communication and accessibility of rules for regulated entities, the use of plain language when drafting and communicating regulation. The chapter also analyses the use of consultation for dialogue with affected groups and stakeholders and its consequence regarding the choice of policy instruments embodied in the figure of new regulations or other non-regulatory alternatives. Finally, it introduces the notion, and potential use, of Regulatory Impact Assessment as part of evidence-based rule-making.

This chapter discusses the different practices towards managing and rationalising regulations. It shows how even though Chile has not undergone a comprehensive review of regulations and formalities, there have been some efforts to manage the regulatory stock through some projects and programmes. The different techniques that can be used to manage regulations include the Citizen’s Office, Business Desk, Chile Atiende, Chile without red tape, and Chile Click; some of which are part of the Agenda for Productivity, Innovation and Growth. Finally, the chapter also describes the use and implementation of administrative simplification initiatives, centralised registries and one-stop shops by the Chilean government and sets out examples of implementation in other OECD countries.

To achieve its intended objective, a regulation must be complied with. This chapter looks into compliance and enforcement mechanisms. It offers and approach to regulatory enforcement and compliance, seeing that a crucial performance indicator for any regulation is the degree of compliance it generates. It takes into account the use of riskbased approaches for the design and implementation off regulations to be introduced gradually in the Chilean government. Furthermore, it touches upon the justification of having an appeal mechanism that allows for the redress of regulatory abuse by regulators in Chile.

Chapter 7 describes the importance of designing and implementing an ex post regulatory evaluation for norms. The evaluation of existing policies through ex post impact analysis is necessary to ensure that regulations are effective and efficient. In some circumstances, the formal processes of ex post impact analysis may be more effective than ex ante analysis in informing an ongoing policy debate. The chapter expresses the rationale of why this practice should be considered early in the policy cycle, and introduced in the regulatory cycle by the government of Chile. Furthermore, it presents the idea of broadening the scope of evaluation towards programmes and institutions.

This chapter sheds light on the organisation of the Chilean territory and its distribution of regulatory powers. It looks at how in most OECD member countries, different levels of government coexist and how they deal with the each one’s set of rules and attributions. It explains why promoting regulatory quality at the sub-national level would benefit citizens and business, especially with the ongoing initiatives of decentralization. It further describes the multi-level regulatory framework necessary to design, implement, and enforce regulation in order for one level not to undermine the other level’s regulatory effectiveness. Finally, it proposes a multi-level co-ordination mechanism in order to attain regulatory goals, as well as sharing good practices and possible learning experiences.

This chapter seeks to contextualise the current organisational and procedural regime for construction permit authorisation and management It can be part of the ongoing debate in Chile on improving territorial governance in general and on the urban development policy in particular. The chapter discusses the status of regulatory policies, institutions, and tools in the territorial planning and construction permits regime of Chile. It starts by analysing the current territorial governance in Chile and situating it vis-à-vis OECD countries. It describes both frameworks for urban and rural development, and afterwards, it discusses how modernising construction permits in Chile could be done by touching upon the normative and institutional structure, the city planning activity, and the management of natural risks in Chile. Finally, it recommends further steps to improve the high fragmentation and low co-ordination within the sector.

This chapter describes the importance of SMEs to an economy and how the government of Chile could improve its regulatory framework. It does this by presenting a brief overview of SMEs in Chile and the main institutional actors and agencies involved in SME policy. An overview of SME policy throughout the last few decades is provided based on literature, expert interviews and a dedicated stakeholder survey. An analysis of remaining regulatory barriers to SME start-up and continuity is given, together with a closer look at the policy efforts made to formalise SMEs.

This chapter describes the current digital government and administrative simplification initiatives being implemented by the government of Chile. It reviews these practices against the framework set by the 2014 OECD Recommendation of the Council on Digital Government Strategies. It focuses on initiatives such as Chile Atiende, Empresa en un día, Escritorio Empresa, and SICEX. Furthermore, it discusses the case of the Chilean ports as the Agenda for Productivity, Innovation and Growth considers logistics one of the main priorities of the country. In addition, it discusses instruments to align different agendas and foster policy coherence, effective collaboration and co-ordination. Finally, it recommends several actions in order to improve the alignment of actions aimed at improving digital government, administrative simplification and service delivery to increase impact.