Authoritarian Rule and Economic Groups in Chile: A Case of Winner-Takes-All Politics

No Latin American dictatorship had a closer relationship with big business than that of Chile helmed by Augusto Pinochet (1973–1990). This dictatorship aimed to radically transform the Chilean economic model its Marxist predecessor created, as well as the import substitution industrialization model built decades earlier. New policies included the reversal of the agrarian reform program, laws limiting the power of labor unions, and mass privatizations. The last led to the concentration of several economic sectors in the hands of a small group of large business groups. We study Pinochet’s policies favoring both the business groups that existed before 1973 and the new ones created around exports and retail. Our analysis allows us to understand how the persistence of wealth concentration during the post-1990 democratic regime is linked both to the continuity of dictatorial institutions, such as the 1980 Constitution, and to the perdurance of business practices acquired in dictatorship, such as anti-union, monopolistic, and collusive corporate practices.