Poverty and housing in Chile: the development of a neo-liberal welfare state

Abstract

This paper considers poverty alleviation measures in Chile under the military regimes of General Pinochet (1973–1989). It explores the political and economic context within which decisions were made and the impact of economic restructuring upon urban poverty in the country. It argues that the state responded to rising poverty through the use of increased targeting of subsidies. While this was successful in terms of directing resources to the poor, it also led to a situation of increased social and residential segregation within the city and did not provide any means of social mobility for the poor, as official ideology had implied. The paper then considers a specific sector — that of housing — and explores the development of a substantial subsidy system for low- and middle-income groups. The Basic Housing Programme was the most important of the regime's housing policies for low-income groups and remains in operation today. The paper argues that while this programme was efficient and well-targeted, it also contributed to the acute residential segregation of Santiago and led to serious overcrowding which will have important consequences in future.