The Impact of Globalization on Argentina and Chile

The Impact of Globalization on Argentina and Chile

Business Enterprises and Entrepreneurship

Edited by Geoffrey Jones and Andrea Lluch

During the first global economy of the late nineteenth century and early twentieth century, Argentina became one of the richest countries on earth, while Chile was an economic backwater. During the contemporary era of globalization, liberalization and institutional reforms in Chile provided a context in which business grew, while in Argentina, institutional dysfunction made productive business hard to sustain. This book explores the complex relationships between corporate behavior, institutions and economic growth through the contrasting experiences of Argentina and Chile. In nine chapters written by prominent business historians, the work addresses the role of business in these two eras of globalization, examining the impact of multinationals, the formation of business groups, and relations between business and governments. It places the regional experience within the context of the worldwide history of globalization.

Chapter 8: Public-private relationships in Chile after 1990

Oscar Muñoz

Subjects: business and management, entrepreneurship, international business, economics and finance, economic psychology

Extract

Over the past two decades, theoretical and empirical studies on economic development have highlighted the benefits of collaborative relationships between the state and the private sector. Indeed, it is now widely accepted that markets require institutions to set the rules of the game. Neo-institutionalism theories underscore the need to build quality institutions that contribute to streamlining the activities of economic agents, while promoting long-term visions, credibility, trust, learning, and technological innovation. The discussion on new development strategies that meet both equity and competitiveness requirements also highlight the need for adequate cross-sector public-private cooperation mechanisms. For instance, the Nobel Prize laureate Joseph Stiglitz has argued ‘a new development strategy . . . should not only include coordination among several agencies within government but also between public and private sectors as well as among private sector segments’. From another standpoint, the Harvard economist Dani Rodrik has stressed that numerous market flaws and state shortcomings require that competitiveness policies be viewed as a ‘process’ driving collective learning and a ‘discovery’ of new opportunities to enhance competitiveness and growth. ‘What is needed instead’, he argued, is a more flexible form of strategic collaboration between public and private sectors, designed to elicit information about objectives, distribute responsibilities for solutions, and evaluate outcomes as they appear.’

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