Regulatory Policy in Chile

Government Capacity to Ensure High-Quality Regulation

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One of Chile’s biggest strengths is its very sound macroeconomic framework that reinforces its economic resilience. This is partly based on a prudent regulatory and supervisory framework governing the financial system. Furthermore, the government’s Agenda for Productivity, Innovation and Growth, co-ordinated by the Ministry of Economy with the participation of other ministries and state services, constitutes a good opportunity to use regulatory policy as a driver to reform the policymaking framework of Chile. For example, Chile has already made substantive progress in making regulations more accessible and communicating administrative requirements. However, while in Chile national regulations provide the general framework for administrative procedures and an efficient state administration, the lack of a comprehensive regulatory reform programme has reduced the possibility of achieving even better economic outcomes and unleashing resources to boost productivity. The regulatory policymaking framework lacks some key features seen in other OECD countries (e.g. stakeholder engagement, regulatory impact assessment, oversight body) that would make sure that regulations are designed in the best way. Good practices in rule-making procedures are also rather limited. This review presents the way forward for improving the government’s capacity to ensure high-quality regulation in Chile.

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The macroeconomic context in Chile

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.

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