ABSTRACT Mainstream approaches in comparative education have paid more attention to trends in donors’ priorities than to policy processes in recipient countries, overlooking the agency of national governments in the institutional configuration of vocational education and training (VET) in developing contexts. Drawing on constructivist political economy and historical institutionalist frameworks, the paper analyses the role played by global development paradigms and ideas in the VET policy reforms adopted in Chile during the period between 1964 and 2005. The study shows how the selective adoption of international development ideas in Chile was mediated by the ideological orientation of national government administrations in each historical period. It also shows how the main goals of VET policies evolved as the economy tertiarised and the demand for education grew among lower social classes. Finally, the paper identifies the military dictatorship as a path-shaping moment in the institutional configuration of VET in Chile, as it was able to impose a radical transformation of the system from central planning to decentralised market competition. This profound transformation generated institutional path-dependencies that restricted the capacity of future democratic governments to reverse the market model in VET.