The welfare state is not enough: Lessons about inequality from Chile's 2019 crisis

Image by @gcoppa

By Scott L. Greer

Chile is a country often used to make other people's points in global conversations. The coup that kicked off the brutal Pinochet dicatorship, which made the country a laboratory for the right-wing "Chicago boys," made it a focal point of arguments between left and right about democracy and public policy the world over. 

Its successful and pacted democratization process then made it a topic of discussion for happier reasons. It showed others a way to have a successful democratic transition despite a powerful military and considerable economic and political inequality. It also showed the world how a cautious and centrist government could make real and positive changes- including the extension of public health care in a globally well-regarded AUGE plan. AUGE, among other things, is redistributive in a country with an appallingly unequal income distribution. Bluntly, the rich have more money and the poor have worse health, so good and publicly financed health care reduces income inequality.

That was why it came as a bit of a shock to much of the world, if not Chileans, when in 2019 protests against an increase in metro fares in the capital city led to widespread rioting and huge demonstrations that led the government to rediscover some authoritarian reflexes. What had happened? Claudio Méndez of the Universidad Austral de Chile and Martin McKee of the LSHTM and I have a new article out in the Journal of Public Health Policy that asks. 

The short answer we found is that even a redistributive health care reform cannot compensate for broader inequalities in the society. It's so easy in health policy to fixate on UHC that we forget that it is and can only ever be a small part of the distribution of income, wealth, security and opportunities in a society. The OECD shows this well- the UK and Swedish governments make approximately equal efforts to reduce income inequality with taxes and transfers, but the UK is such an unequal economy to begin with that the same rough effort by the state still leaves a far less equal UK. Chile is one of the world's most unequal countries. It's easy to fixate on a really good welfare state, but if we are to address the inequalities that really drive health inequalities, we cannot assume that a good welfare state or taxes alone will do the trick. We need to look to the broader economy, for that is where inequality comes from.

Enjoy! And DM us on twitter or email me if you want a copy, since it's paywalled.