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Using a comparative framework, this essay argues against the claim that General Augusto Pinochet's Chile provides a model of economic development for Eastern Europe and the former Soviet Union. I argue that Chile's experience represents an anomaly among military regimes. Key to understanding economic policymaking rests on an understanding of how economic policymakers are chosen. Like all political leaders, the primary goal of military rulers is survival. Military rulers choose policymakers based on their political contribution to the ruler's survival. The evidence presented shows that Chile's choice of economic policy and economic policy makers was not a function of economic efficiency but, like Argentina and Uruguay, was chosen on the basis of political expediency. It was merely by chance political need that Chile's military chose the "correct" economic policies and not through any "true" understanding of the requirements for economic development.
Following the collapse of the Soviet Union and Eastern Europe, questions arose about the types of economic policies these countries should choose in an effort to promote economic development.1 Some argued that Chile's experience under military rule represented the best economic model for these former communist regimes.2 In the 1970s with state ownership and protectionism dominating policy agendas in most developing countries Chile, under the military regime of General Augusto Pinochet, became the first to orient its economy towards the market.
Echoing arguments made in the 1960s and 1970s (Huntington 1968), some claim that on the basis of Chile's experience, military or authoritarian regimes, more generally, provide the ideal circumstances for the attainment of high rates of economic growth in the medium and long run (Malloy 1987; Olson 1982).3 These regimes do not seek reelection or popularity, so the story goes, which enables them to ignore societal interests usually hurt in the short term by stabilization or adjustment policies. Despite economic inequalities and severe military repression, Chile's high rate of growth in the mid-to-late 1980s made it appear an ideal model for others to imitate.
However, what supporters of this argument fail to notice is that military regimes have initiated different economic policies and have varied widely in their economic results (Haggard 1986; Remmer 1986). Indeed, many military regimes did worse than the democratic governments they replaced. Chile took more than ten years...