What Makes Chilean Agriculture Tick? Estimation and Interpretation of Elasticities in Representative Markets
The Chilean countryside has experienced dramatic change in the last 20 years. From the mid-1960s onwards successive governments implemented increasingly radical land reforms. This process was stopped by the 1973 military coup, after which some land was returned to the original owners and most of it distributed in individual parcels. Later on some concentration occurred, resulting mainly from small farmers being forced to sell by lack of credit and technical support. But the age-old traditional large estates (described by some authors as pre-capitalist latifundia or haciendas) were not reestablished; instead new family-sized and modern capitalist farms developed. At the same time, the post-1973 macroeconomic policies liberalised external trade and domestic prices, and agricultural exports and imports rose. The traditional patterns of land exploitation, labour use and rural-urban migration all experienced substantive change (Rivera and Cruz, 1984; Kay, 1985).
Continuity, Legitimacy, and Agricultural Development: Conclusions
This chapter aims at bringing together the principal conclusions of the volume, emphasising some particular aspects and questions. Policy continuity in relation to the late 1980s was rightly defined by the Aylwin government policymakers as an essential instrument for further agricultural growth. But in a democratic environment the Aylwin policies, in part precisely because of their strong element of continuity, could be implemented only if they were perceived as legitimate by the majority of the rural population, and by the poor in particular. This means that substantial improvements in agricultural income distribution, and in the quantity and quality of the social services provided to the rural poor, were unavoidable. In order to achieve legitimacy it was, and is, necessary to introduce changes. A lucid, creative combination of continuity and change was the only guarantee of success for the Aylwin policies, and for those of future democratic administrations. Continuity and legitimacy are the fundamental pillars for democratic agricultural development.
Minimum Wages, Union Membership and Differentials: The Phillips Curve and the Chilean Labour Market Revisited
Several Phillips curve models are presented and estimated with Chilean annual data for 1963–1982. Because of unreliable unemployment statistics, the real wage level is used to represent labour market disequilibrium. The Cortazar‐Marshall inflation index, alternative to the official one, and four different earnings variables are used. Equilibrium levels of earnings and equilibrium differentials are obtained. Market forces, expected inflation, structural change after 1973, and exogenous elements represented by a trend are all statistically significant; government‐determined minimum wage rates and union membership are not. There is no evidence of partial adjustment, and all equilibrium differentials increased during the period.