Welfare State Reform in Chile and Uruguay: Cross-class Coalitions, Elite Ideology, and Veto Players

This paper provides a comparative historical analysis of the emergence, consolidation, and reform of the Chilean and Uruguayan welfare states. While until the 1970’s both countries built strikingly similar social protection systems, they subsequently advanced divergent strategies of reform, with Chile following the retrenchment path and Uruguay pursuing the maintenance avenue. My objective is to explain the disparate outcomes of these two countries by taking evidence from the analysis of two policy areas: pensions and health care. The military government that ruled Chile (1973-1990) advanced an important reform of the welfare state through which the old universalistic system was replaced by a set of targeted, means-tested social policies intended mainly to guarantee the necessities of low income households. However, the Uruguayan welfare state under military rule (1973-1985) showed a remarkable continuity. During the re-democratization period, while the Chilean governments maintained the welfare model inherited from the previous military regime, Uruguay started to develop a gradual and limited process of welfare reform. Yet, the Uruguayan State continues to have a prominent role in the area of social policy provision. This paper argues that the contrasting patterns of welfare state change seen in Chile and Uruguay are explained by the existence/absence of broad cross-class alliances supporting welfare programs; the ideological positions of the policy makers; and the degree of concentration of governmental authority, which in turn affects the ability of veto players to block reform attempts. Prepared for delivery at the 2000 Meeting of the Latin American Studies Association, Hyatt Regency Miami, March 16-18, 2000. Welfare State Reform in Chile and Uruguay Rossana Castiglioni 1 Welfare State Reform in Chile and Uruguay: Cross-class Coalitions, Elite Ideology, and Veto Players