The technocratic barrier to wage policy: theoretical insights from the Chilean Concertación

After Latin America’s transition to a market economy in the 1980s and 1990s, most left-wing governments in the region recognised the importance of committing to macroeconomic equilibria and successfully managed to combine this goal with a wide array of social policies. Wage policy, however, proved a conflictive arena in the wake of a period of harsh austerity measures. This article provides unique insights from the experience of the Chilean Concertación governments (1990–2010) about the important role intra-left conflicts played in the advancement of collective labour rights. My working hypothesis is that the conflict between technocrats and non-technocrat political cadres in conjunction with a perceived trade-off between growth and distribution was a major determinant of wage outcomes. My analysis relies on a mixed-methods approach combining regression analysis and process tracing. Chile’s attempts at labour reform during the Concertación governments help explain how the perceived trade-off mentioned above may have unfolded not only in Latin America but also in other regions of the developing world. The novelty of this analysis lies in highlighting intra-left conflict as an important and understudied driver of labour and wage policies and elucidating the political economy of distributive strategies during the period 1990–2010.