Chile: Education and

Neoliberal Economic Policies

By:Nelly Cardinale

EDU 7260 Comparative

International/Global

Higher Education

11/06/2011

Origins of Neoliberal Policies• According to Valdés(1995) in 1955

– the Pontifical Catholic Univ of Chile and the Univ of Chicago created a joint collaborative doctoral level economics degree program.

– The program offered educational grants for students who were admitted (Valdés,1995).

• The plan was a response to a act passed by the US Federal Agency for International Development meant to provide aid for developing countries and was titled,”Project Chile” (Valdés, 1995).

– Project was initially funded by the Ford Foundation, the International Co-operative Alliance (ICA) and the Rockefeller Foundation (Valdés, 1995).

Origins of Neoliberal Policies• The purpose of the doctoral program was to teach

neoliberal economic principals which advocate free-market policies and the transfer of former government regulated services to private industry (Silva,1991;Valdés,1995 ).

• The intended outcome was for the newly trained economists to introduce reforms that would revive the economy of Chile(Valdés,1995).– Between 1955 and 1963, thirty students took advantage

of the grants, traveled to Chicago to study and became know as the, "Chicago Boys” (Silva,1991).

• In 1973, a oppressive military style government took over in Chile. The government leader appointed the Chicago Boys to key government positions in Chile (Valdés,1995).

List of the Chicago Boys

(Notice that there is one female on the list).

Origins of Neoliberal Policies

• One of the educators in the joint Pontifical Catholic

Univ of Chile and the Univ of Chicago program was

the famous economist, Milton Friedman, who won a

Nobel Memorial Prize in Economic Sciences in 1976.

Origins of Neoliberal Policies

• Another educator in the joint Pontifical Catholic Univ

of Chile and the Univ of Chicago program was the

famous economist, Gary S. Becker, who also won a

Nobel Memorial Prize in Economic Sciences in 1992

Economic Neoliberal Reforms

during the 1970s

• According to Taylor (2003) the Chicago Boys spearheaded the following changes:– Privatized the health industry (Taylor, 2003).

– Introduced international agricultural trade (Taylor, 2003).

– Proposed labor laws that mandated raises tied to inflation (Taylor, 2003).

– Disbanded collective bargaining units (Taylor, 2003).

– Allowed workers to chose traditional Social Security or privately run IRA’s(Edwards & Edwards, 2002).

Results of the Economic

Reforms

Source: Charts

World Bank: World development indicators for Chile 2002

Economic Results

• According to the Organization for Economic

Co-operation and Development (OECD)

website(2010), the country of Chile became

the first South American country to join it’s

membership on Jan-11-2010.

– This organization is comprised of 34 countries

which have the richest economies in the world.

• The purpose of the organization is so that governments

of these countries can work together to solve common

worldwide economic, social and environmental

problems

• Most of the members are developed countries

– however Chile was invited and joined as a developing country

Current members of OECD

Source: Table OECD Website

The President of Chile during

the OECD Ceremony

President Michelle Bachelet accepts the official OECD

membership certificate during a ceremony held in the

White House of Chile on Jan 11th, 2010. She is also a

pediatrician and her presidential term ended March

11th, 2010.

Source:Photo OECD Website

The New President of Chile• The new president is Sebastián Piñera and he started

in March 2010.– According the Harvard Gazette website he:

• is a former college professor of Economics who earned his doctorate from Harvard University.

• plans to elevate the Chile’s status of a developing country to a developed country by the end of this decade

• is allocating four billion dollars to education in order to update the technology systems in both the K-12 and higher education school institutions.

Source: Photo Harvard Gazette Website

1980’s K-12 School Reforms

• The Chicago boys also:

– Decentralized the schools and gave the

control to municipalities (Taylor, 2003)

• Taylor (2003) states that they

Implemented a new Voucher System

which:• created and funded new voucher-based private

schools

• funded traditional public schools using vouchers

1980’s K-12 School Reforms• According to Carnoy (1997) the voucher plan

also eliminated :

– teacher unions and contracts at all schools

– national curriculum standards

• This new system:– paid money directly to schools based on

parental choice(Taylor,2003).

– did not affect traditional private tuition-based schools (Silva, 1991).

– allowed the voucher-based private schools to charge fees in addition to the vouchers (Carnoy, 1997).

1990’s K-12 School Reforms

• According to Foxley(2004) in 1991, the school day was extended to 8 hours– teachers were given raises to compensate

for the extra working hours.

• faculty unions were restored

• tenure was restored for teachers and school educators

• computers and Internet service provider contracts were purchased by the government for all schools.

Success of Voucher

Schools in Chile• According to Mizala and Torche(2010), the k-12

private-voucher supported schools have only been moderately successful in raising academic achievement when compared to traditional private-tution based schools.

Higher Education Reforms

• According to Espinosa (2002) in 1981, the Chicago boys proposed that:– students be offered loans instead of grants and

scholarships

– college tuition and fees be implemented for the first time

– the country encourage and approve the creation of private institutions of higher education

– higher education institutions solicit donations and take out loans as additional funding sources

– the country reduce the tax revenue usually allocated to help support public universities

Higher Education Structure

• According to Ramírez (2005) in 2002, five types of

higher education institutions existed in Chile.

Source: Chart © Nelly Cardinale Created with

Data from (Ramírez, 2005).

Higher Education Structure

Source: Graphic OCIDES Tertiary Education in Chile 2009

Higher Education Undergraduate

Enrollment 2005• According to the Chilean Ministry of Education website, in

2005, the higher education undergraduate enrollment rates were:

For-profit Institutions

• Ramírez (2005) further asserts that in 2000,

Laureate Learning (formally Sylvan) bought out

the,”University of the Americas”.

– However, according to Kinser and Levy(2005),

• Chile does not permit universities to operate as for-profit

institutions, therefore this institution continues to be a

private non-profit college.

• In contrast, most of the professional institutes, voucher-

supported private schools and centers for technical training

centers in Chile are currently classified as for-profit

institutions.

First Community College• According to Li(2010)

– the first community college was created with the help of LaGuardia Comm College of NY and is currently run by the Central Univ of Chile and located inside its’ campus

• students can apply the credits towards the pursuit of a four year degree at Central Univ

– students earn Associate Degrees from both colleges

– the joint degree program offers exchange opportunities for both faculty and students

– the program is meant to remove the stigma of attending a center for technical training

– it is more affordable than attending a technical training school that are usually for-profit institutions.

First Community College

• According to Li(2010) the college’s executive

director hopes that the program will help facilitate

social mobility for many students and help meet the

employee needs of local industry.

– According to the Community College of Santiago (n.d.)

the majors offered are:

• Network security and administration

• Programming

• Telecommunications

• Business Management

• Accounting

Internationalization of Higher

Education• According to Ramírez (2005) in 2003 the universities

in Chile had active collaborative educational agreements in many parts of the world:

Source: Table (Ramírez, 2005).

Pressing Contemporary Issue• According to Bernasconi (2007) in 2006

Chile finally signed a act called the Quality Assurance Act (QAA).– This act will create a uniform system for

accreditation for all of the higher education institutions in the country.

• Participation in the system will be voluntary except for undergraduate programs in the health and education fields.

• The system is two-tier with a public national education commission licensing and supervising private companies in charge of the institutional evaluations.

Pressing Contemporary Issue

• According to The Economist (2011) for the last

five months, both high school and college

students have been protesting:

– They want control of the entire education system

turned over to the Chilean government

– They are demanding more government spending on

education. Currently

• the Chilean government pays 15% of the total percent of

education costs which is the lowest of all of the OECD

countries.

• 40% of all education expenses are paid for by families which is

the highest amount when compared to the other OECD

countries.

Pressing Contemporary Issue• The Economist (2011) further reports that in the

case of a college education, the students are demanding:

• the end of college tuition and fees

• loans issued by the government instead of local banks

• The Times Higher Education(2011) also reports that– high schools students were the first set of protesters

demanding better quality secondary schools.

– college students want better quality assurance standards for both college and technical learning centers

• It is apparent that the QAA has not yet been formalized

– College students are demanding the end of for-profit higher education institutions

– Even though regular universities and colleges in Chile cannot legally become non-profit, students complain that the colleges use tax loop holes to make a profit.

Government Response• According to Merco Press(2011)

– the president of Chile is proposing a 4 billion dollar budget to be applied towards education.

• it will be mostly funded from the sale of copper which is Chiles’ primary export.

• According to Times Higher Education(2011), the president:– is proposing the creation of new scholarships for

students from the lowest income families• the students do not seem satisfied with this proposal

• According to Al Jazeera(2011) – the Chilean government plans to create a commission

of experts which will study the issue and recommend a solution

The Protests are Still Ongoing

• According to Al Jazeera(2011) the protests are now getting violent– On Thursday October 6th, 2011, police used tear gas and

water canons to stop the protesters.• as a result, several bystanders and some members of the media

were injured.

• According to Times Higher Education(2011), the protest is very likely to end soon regardless of the outcome:– since students cannot afford to continue to skip classes

without the risk of academic failure.

Similarity to the Occupy

Movement in the US• The Chilean students’ protests are similar to

the Occupy movement in the US.– In both cases:

• students and others are protesting about the high cost of higher education.

• people want free higher education and interest free loans for related expenses.

• students demand that education loans be issued by the government and not by commercial banks.

– Both protests are really about social and financial inequalities.

An Image from the

Occupy Movement

Source: Photo The Examiner Website

An Image from the

Chilean Student Protest

Source: Photo Sulekha News Hopper

Conclusions and Implications• It is a great surprise to find out that Chile which is a

developing country was and still is ahead on its’ time when it comes to higher education globalization and internalization.– In contrast US colleges and universities are playing

catch up

• Chile is also ahead of us in gender inequality– our country has yet to elect a female president

• We can learn from Chile about voucher school programs which are similar to charter schools in the US.– After all of these years, the voucher program there has

not significantly raised student achievement, therefore it seems likely that charter schools systems in the US may also not be the answer to low student achievement.

• It is interesting that a decade after Chile eliminated collective bargaining and tenure for educators, it restored them.– Perhaps this is an institution that the US should not consider

eliminating in any way.

• It is obvious that educational internalization efforts between the University of Chicago and the Pontifical Catholic Univ of

Chile changed the course and history of Chile.• I do not think that this country would have become a member of

OECD if it were not for the, “Chicago Boys”.

• I also believe that Chiles’ economic success caused other countries to also adopt neoliberist policies and that these changes altered the course and economies of many other countries in the world.

– This is the most compelling reason why US higher education institutions should continue internationalization efforts, it may be the catalyst that changes the world, one country at at time.

Conclusions and Implications

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