IDEAS home Printed from https://ideas.repec.org/p/edj/ceauch/167.html
   My bibliography  Save this paper

The Privatization of Social Services in Chile: an Evaluation

Author

Listed:
  • Ronald Fischer
  • Pablo González
  • Pablo Serra

Abstract

We examine the privatization of Chilean social services that began in 1981. We conclude that the reform has had a positive impact by providing competition to public providers (health and education) and insulation from political capture (pension funds). The major lesson, however, is that the full benefits from privatization-cum-competition are slow to arrive and require able regulators to achieve them. Some of the benefits of competition are lost through rent dissipation, especially in the providers’ search for the more attractive customers. These rents are due in part to the limitations of consumers when deciding on highly complex issues under asymmetric information. Another source of inefficiency is regulations introduced to avoid moral hazard problems, but which also have the effect of limiting competition. The performance of social service markets is improving, and this can be attributed to changes in regulation (fewer restrictions and more transparency), the consolidation of the industries, and hypothetically, better decisions on the part of consumers.

Suggested Citation

  • Ronald Fischer & Pablo González & Pablo Serra, 2003. "The Privatization of Social Services in Chile: an Evaluation," Documentos de Trabajo 167, Centro de Economía Aplicada, Universidad de Chile.
    • Handle: RePEc:edj:ceauch:167
    as

    Download full text from publisher

    File URL: http://www.cea-uchile.cl/wp-content/uploads/doctrab/ASOCFILE120030923144121.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Hanushek, Eric A, 1995. "Interpreting Recent Research on Schooling in Developing Countries," The World Bank Research Observer, World Bank, vol. 10(2), pages 227-246, August.
    2. Lupia,Arthur & McCubbins,Mathew D., 1998. "The Democratic Dilemma," Cambridge Books, Cambridge University Press, number 9780521584487, November.
    3. John Vickers & George Yarrow, 1991. "Economic Perspectives on Privatization," Journal of Economic Perspectives, American Economic Association, vol. 5(2), pages 111-132, Spring.
    4. Cristían Aedo, 1997. "Organización Industrial de la Prestación de Servicios Sociales," IDB Publications (Working Papers) 7561, Inter-American Development Bank.
    5. Caroline M. Hoxby, 2003. "The Economics of School Choice," NBER Books, National Bureau of Economic Research, Inc, number hox03-1.
    6. Mizala, Alejandra & Romaguera, Pilar, 2001. "Factores socioeconómicos explicativos de los resultados escolares en la educación secundaria en Chile," El Trimestre Económico, Fondo de Cultura Económica, vol. 68(272), pages 515-549, Otubre-di.
    7. Lupia,Arthur & McCubbins,Mathew D., 1998. "The Democratic Dilemma," Cambridge Books, Cambridge University Press, number 9780521585934, November.
    8. Peter A. Diamond, 2000. "Administrative Costs and Equilibrium Charges with Individual Accounts," NBER Chapters, in: Administrative Aspects of Investment-Based Social Security Reform, pages 137-172, National Bureau of Economic Research, Inc.
    9. Peter Diamond, 2004. "Social Security," American Economic Review, American Economic Association, vol. 94(1), pages 1-24, March.
    10. Richard H. Thaler, 2017. "Behavioral Economics," Journal of Political Economy, University of Chicago Press, vol. 125(6), pages 1799-1805.
    11. Diamond, Peter & Koszegi, Botond, 2003. "Quasi-hyperbolic discounting and retirement," Journal of Public Economics, Elsevier, vol. 87(9-10), pages 1839-1872, September.
    12. Ronald D. Fischer & Pablo Serra, 1997. "Análisis económico del sistema de seguros de salud en Chile," Documentos de Trabajo 17, Centro de Economía Aplicada, Universidad de Chile.
    13. Hanushek, Eric A. & Rivkin, Steven G., 2006. "Teacher Quality," Handbook of the Economics of Education, in: Erik Hanushek & F. Welch (ed.), Handbook of the Economics of Education, edition 1, volume 2, chapter 18, pages 1051-1078, Elsevier.
    14. Winkler, Donald R. & Rounds, Taryn, 1996. "Municipal and private sector response to decentralization and school choice," Economics of Education Review, Elsevier, vol. 15(4), pages 365-376, October.
    15. Chang-Tai Hsieh & Miguel Urquiola, 2002. "When Schools Compete, How Do They Compete? An Assessment of Chile's Nationwide School Voucher Program," Working Papers 123, Princeton University, Department of Economics, Center for Economic Policy Studies..
    16. Eric A. Hanushek & Steven G. Rivkin, 2003. "Does Public School Competition Affect Teacher Quality?," NBER Chapters, in: The Economics of School Choice, pages 23-48, National Bureau of Economic Research, Inc.
    17. Lupia, Arthur, 1992. "Busy Voters, Agenda Control, and the Power of Information," American Political Science Review, Cambridge University Press, vol. 86(2), pages 390-403, June.
    18. Alejandra Mizala & Pilar Romaguera, 2000. "School Performance and Choice: The Chilean Experience," Journal of Human Resources, University of Wisconsin Press, vol. 35(2), pages 392-417.
    19. Lupia, Arthur, 1994. "Shortcuts Versus Encyclopedias: Information and Voting Behavior in California Insurance Reform Elections," American Political Science Review, Cambridge University Press, vol. 88(1), pages 63-76, March.
    20. Ronald Fischer & Rodrigo Gutiérrez & Pablo Serra, 2002. "The Effects of Privatization on Firms and on Social Welfare," Documentos de Trabajo 131, Centro de Economía Aplicada, Universidad de Chile.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Pablo González, 2002. "Lecciones de la investigación económica sobre el rol del sector privado en educación," Documentos de Trabajo 117, Centro de Economía Aplicada, Universidad de Chile.
    2. Alejandra Mizala & Pilar Romaguera & Carolina Ostoic, 2004. "A Hierarchical Model for Studying Equity and Achievement in the Chilean School Choice System," Documentos de Trabajo 185, Centro de Economía Aplicada, Universidad de Chile.
    3. Valentino Larcinese, 2007. "Does political knowledge increase turnout? Evidence from the 1997 British general election," Public Choice, Springer, vol. 131(3), pages 387-411, June.
    4. Fischer, Ronald & Gonzalez, Pablo & Serra, Pablo, 2006. "Does competition in privatized social services work? The Chilean Experience," World Development, Elsevier, vol. 34(4), pages 647-664, April.
    5. Cheryl Boudreau & Mathew D. McCubbins, 2008. "Nothing But the Truth? Experiments on Adversarial Competition, Expert Testimony, and Decision Making," Journal of Empirical Legal Studies, John Wiley & Sons, vol. 5(4), pages 751-789, December.
    6. Rodrigo Gutierrez & Pablo Serra & Ronald Fischer, 2003. "The Effects of Privatization on Firms and on Social Welfare: The Chilean Case," Research Department Publications 3150, Inter-American Development Bank, Research Department.
    7. Ronald Fischer & Rodrigo Gutiérrez & Pablo Serra, 2002. "The Effects of Privatization on Firms and on Social Welfare," Documentos de Trabajo 131, Centro de Economía Aplicada, Universidad de Chile.
    8. James Tilley & Christopher Wlezien, 2008. "Does Political Information Matter? An Experimental Test Relating to Party Positions on Europe," Political Studies, Political Studies Association, vol. 56(1), pages 192-214, March.
    9. Matthias Benz & Alois Stutzer, 2004. "Are Voters Better Informed When They Have a Larger Say in Politics? -- Evidence for the European Union and Switzerland," Public Choice, Springer, vol. 119(1_2), pages 31-59, April.
    10. Bruno S. Frey & Alois Stutzer, "undated". "The Role of Direct Democracy and Federalism in Local Power," IEW - Working Papers 209, Institute for Empirical Research in Economics - University of Zurich.
    11. Bruno S. Frey & Alois Stutzer, "undated". "Direct Democracy: Designing a Living Constitution," IEW - Working Papers 167, Institute for Empirical Research in Economics - University of Zurich.
    12. Patrick Bayer & Robert McMillan, 2005. "Choice and Competition in Local Education Markets," NBER Working Papers 11802, National Bureau of Economic Research, Inc.
    13. Frey, Bruno S., 2004. "Direct Democracy for a Living Constitution," Freiburg Discussion Papers on Constitutional Economics 04/5, Walter Eucken Institut e.V..
    14. Gebhard Kirchgässner, 2000. "Wirtschaftliche Auswirkungen der direkten Demokratie," Perspektiven der Wirtschaftspolitik, Verein für Socialpolitik, vol. 1(2), pages 161-180, May.
    15. Ludger Wossmann, 2010. "Families, schools and primary-school learning: evidence for Argentina and Colombia in an international perspective," Applied Economics, Taylor & Francis Journals, vol. 42(21), pages 2645-2665.
    16. Schnakenberg, Keith & Schumock, Collin & Turner, Ian R, 2023. "Dark Money and Voter Learning," SocArXiv r562d, Center for Open Science.
    17. Brad R. Taylor, 2020. "The psychological foundations of rational ignorance: biased heuristics and decision costs," Constitutional Political Economy, Springer, vol. 31(1), pages 70-88, March.
    18. Schlapfer, Felix, 2008. "Contingent valuation: A new perspective," Ecological Economics, Elsevier, vol. 64(4), pages 729-740, February.
    19. Pablo González & Alejandra Mizala & Pilar Romaguera, 2002. "Recursos diferenciados a la educación subvencionada en Chile," Documentos de Trabajo 150, Centro de Economía Aplicada, Universidad de Chile.
    20. Matsusaka, John G., 2018. "Special Interest Influence under Direct versus Representative Democracy," Working Papers 278, The University of Chicago Booth School of Business, George J. Stigler Center for the Study of the Economy and the State.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:edj:ceauch:167. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: the person in charge (email available below). General contact details of provider: https://edirc.repec.org/data/ceuclcl.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.