To casual observers, Chile’s approaching presidential election appears like a familiar Latin American drama: a contest between ideological extremes, with Communist Party candidate Jeannette Jara on the left and former Member of the Chamber of Deputies José Antonio Kast, a hard-right conservative, on the opposite pole. The optics suggest polarization, a society split between incompatible visions of the future. Yet the deeper irony — and the most consequential feature of Chile’s political landscape — is that this election is not a clash of extremes at all, but a convergence of them. The left and right agree far more than they disagree on Chile’s economic model. The reason: Strong institutions have forced both sides toward moderation.
While voters will choose between personalities, the real protagonist of Chile’s political story is the institutional architecture that survived both the 2019 social uprising and the abortive constitutional rewriting efforts. The independent central bank, the structural fiscal rule, the debt limit and a political culture steeped in technocratic policymaking have collectively constrained what any politician can credibly promise. Economics, not ideology, is now setting the boundaries within which politics operates.
This phenomenon reflects a broader pattern visible in Chile’s long-run indicators: Even as social expectations surged in the 2010s, institutional inertia kept the macroeconomic regime remarkably stable. Political coalitions have shifted, but the guardrails of fiscal prudence and monetary independence have produced what scholars call an equilibrium of constrained divergence — parties rhetorically drift apart while practically converging on the same policy frontier.
The frontier is not defined by electoral preferences, but by institutional constraints — fiscal rules, inflation-targeting mandates, market discipline and the credibility premium embedded in Chile’s economic governance. Thus, administrations of very different ideological profiles end up selecting from the same narrow menu of feasible macroeconomic choices, even when their stated ambitions diverge dramatically.
Institutional anchors after the Estallido Social
Chile forged its current political equilibrium in crisis. The 2019 Estallido Social did not erupt because the country’s institutions were weak, but because expectations had outgrown what the existing model could deliver. Inequality, stagnant wages and frustration with elite governance created a combustible mix. Chilean President Gabriel Boric’s election in 2021 reflected this anger as he campaigned on redistribution, gender rights, climate action and a wholesale constitutional rewrite.
But the public’s rejection of two proposed constitutions in 2022 and 2023 brought the country back to a familiar center of gravity. Chileans demanded renewal, not rupture. Boric’s administration, confronted with legislative fragmentation and deteriorating fiscal conditions, pivoted toward the middle — scaling back ambitious tax reforms, abandoning pension nationalization and moderating its climate industrial policy.
Rather than signaling a revolutionary break, Chile’s recent political cycle reflects a recalibration of expectations. After years of mobilization and constitutional ambition, voters ultimately reinforced their preference for stability even while demanding reform. The electorate experimented with the outer limits of institutional change. Then, through democratic means, it redirected the political system toward continuity. What emerged is not the collapse of the old order but a post-utopian pragmatism: a recognition that social transformation must occur within, rather than against, Chile’s established democratic structures.
The IMF–PIIE view: a macro framework that resists populism
International observers agree that the resilience of Chile’s macroeconomic institutions has shaped this convergence. According to the International Monetary Fund’s 2024 Article IV Consultation, Chile is:
- lowering inflation faster than most Latin American peers,
- re-establishing inflation-targeting credibility,
- strengthening its structural fiscal rule and
- stabilizing debt under the 45% of GDP limit.
This framework leaves little room for fiscal adventurism. As the IMF notes, Chile’s adjustment path hinges on continued discipline in public spending, prudential independence and credible policy guidance. Deviations have immediate costs: higher spreads, weaker currency and political backlash from a middle class wary of macro instability.
The Peterson Institute for International Economics (PIIE) reinforces this view, arguing that Chile remains one of the region’s strongest macro performers precisely because its institutions insulate long-term policy from short-term politics. Chile’s central bank is trusted, its fiscal rule transparent and its regulatory regime stable. These fundamentals survived the social uprising and the constitutional turbulence, and now guide electoral behavior.
In this sense, Chile is approaching what some analysts describe as a “macro-technocratic constitutionalism” — a constitutional order in which policy is insulated from electoral swings and where credible-commitment mechanisms and expert-driven rules carry more weight than popular mandates. Populism is not defeated by ideology but neutralized by institutional design.
The left and right have centered
The two leading candidates reflect the power of these economic guardrails.
Jara, despite her longstanding Communist Party affiliation, has muted ideological ambition. In an interview with Spanish publication El País, she explicitly states, “No trabajo con lógicas refundacionales.” (“I don’t work with foundational logics.”) She presents a more pragmatic, centrist agenda. An early version of her campaign proposed nationalizing copper and lithium, but this idea has since been dropped. Her early pledge to nationalize copper and lithium has disappeared. Her team now emphasizes industrial policy that creates space for private-sector growth, wage policies that remain within fiscal bounds and housing strategies reliant on blended public–private financing.
Kast, long known for staunch cultural conservatism, has reoriented toward security, fiscal prudence and administrative efficiency. His proposal to cut government spending by 1.7% of GDP is framed not as austerity but as rationalization. His pledge to abide by the debt rule reflects political realism: Violating Chile’s fiscal guardrails would doom any conservative government’s credibility.
Both campaigns now accept that the economic model built since the 1990s — that of open markets, macro stability, investment protection and technocratic regulation — cannot be dismantled without enormous economic and political costs.
Candidates have adjusted to the rules, not the rules to the candidates.
The politics of constraint
This convergence is not necessarily a sign of a failing democracy. In fact, it reveals a system where institutions shape political incentives, as stressed by the IMF, Organisation for Economic Co-operation and Development (OECD) and the European Parliamentary Research Service, which highlight how Chile’s institutional framework constrains policy discretion. But it also exposes a paradox: The same macro stability that secures Chile’s credibility narrows the space for structural transformation.
Chile’s productivity has stagnated for over a decade, with national productivity data showing little to no productivity growth since 2012. Its pension system requires modernization, a challenge emphasized repeatedly in policy assessments of Chile’s long-term fiscal and demographic pressures. The lithium sector demands regulatory clarity, with analysts and multilateral institutions noting that uncertainty in governance and concessions has slowed investment. Crime and migration now dominate public concern, overshadowing long-term economic priorities, as US Congressional Research Service reports show security overtaking economic issues in public opinion.
Yet none of the candidates propose the type of deep institutional modernization — tax redesign, labor reform, innovation strategy — that economists argue is necessary for a new growth cycle. The macro constraints that discipline populism may also discourage ambition. The result is a politics of constrained imagination: parties may signal ideological differences, but their governing space is tightly circumscribed by fiscal rules, regulatory stability and central-bank autonomy.
Congressional arithmetic and future governance
Complicating the picture is the likely composition of Congress. Projections from the European Parliamentary Research Service indicate that the center-right and radical right may secure a majority in both chambers. If Kast wins, he would be one of the few post-transition presidents with a legislative majority aligned with his coalition. That would ease security reforms and administrative restructuring, but could also embolden more polarizing factions.
If Jara wins, she faces the opposite problem: negotiating with an unfriendly Congress that will block redistributive or labor reforms. Her presidency would resemble the first years of the Boric administration — ambitious proposals tamed by legislative reality.
Either way, the macroeconomic framework remains intact because no plausible congressional configuration can alter the constitutional or central-bank architecture.
The real battleground: security, migration and state capacity
Security and migration have emerged as pivotal issues in Chile’s 2025 presidential race, especially as rising gang violence and immigrant flows shift public concern from traditional economic issues to law-and-order priorities.
Leading candidate Kast is campaigning on mass deportations, fortified border barriers and a tough-on-crime agenda inspired by Salvadoran President Nayib Bukele. Kast’s opponent, Jara, emphasizes community policing and institutional reform as her crime-control strategy.
Crime is now being treated as an economic variable. A recent study by CLAPES UC, a research center at Chile’s Pontificia Universidad Católica, estimates the country loses around 2.6% of GDP annually to violence and its effects on business. As a result, the electorate increasingly views public order as integral to economic growth rather than separate from it — making security the potential axis for policymaking in the next decade.
A country at a crossroads
Chile’s election may not mark a dramatic pivot between left and right but rather a test of how political competition operates within the country’s long-standing institutional framework. Rather than abrupt ideological swings, Chile’s trajectory is defined by an institutional architecture that disciplines political change and limits sudden policy reversals.
This is Chile’s quiet counterrevolution. It is not a revolt of ideology, but a reaffirmation of a technocratic tradition that began in the late 20th century and has survived crisis after crisis. It is imperfect, constrained and sometimes unimaginative, but it has proven resilient in ways that few democracies can claim today.
Whoever wins the presidency will face a society demanding security, inclusion and better living standards, but neither will dismantle the economic architecture that underpins Chile’s global reputation. Ultimately, the most powerful actor in Chilean politics is not a candidate, but a framework: a set of institutions that has turned economic rationality into political reality.
[Lee Thompson-Kolar edited this piece.]
The views expressed in this article are the author’s own and do not necessarily reflect Fair Observer’s editorial policy.
The post Chile’s Quiet Counterrevolution: How Institutions Are Governing Politics, Not the Other Way Around appeared first on Fair Observer.
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