From To The Point News: By Richard Rahn
Why do very successful nations often adopt policies that lead to their undoing?
After a revolution or major reform, some countries allow a high degree of economic freedom, establish the rule of law, protect private property rights and establish low tax rates with strict limits on government spending and regulation.
The economy takes off, the citizens become far richer and then the government mucks it up, usually by attempting to redistribute income and expand state control.
Is Chile, which has been one of the bright spots in the world economy, falling into this pattern under socialist President Michelle Bachelet?
For the past three decades, Chile has outperformed the other South American countries and now has the highest per-capita income in South America, averaging approximately $22,000 per year on a purchasing power parity basis.
The World Bank lists Chile as a “developed economy,” and it was the first Latin American country to become a member of the Organization for Economic Cooperation and Development. The average Chilean has a per capita income about three times higher than in 1983.
And now the Chilean people seem poised to let Ms. Bachelet throw it all away.
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