Power,Ideology and the Washington Consensus: The Development and Spread of Chilean Housing Policy

It is well known that reality is often stranger than fiction. That certainly applies in the case of the housing subsidy model of Chile. Developed by Chileans with the assistance of neo-liberal ideology invented in Chicago, the powerful institutions of Washington DC appear to have been minor actors on the Chilean scene. Initially, Chile needed World Bank support and finance, but once this had been achieved it followed its own agenda. The Inter-American Development Bank and USAID faired little better. Chile was master in its own house. Was this a victory for national autonomy over the power of international finance? Clearly not, because the new model being applied in Chile was the precursor of much that was implemented from Washington in the days of structural adjustment. Chile 'won' because it accepted the rules of the new game established by institutions far more powerful than the multilateral development banks. Developmental Washington learned much from Chile and then applied those lessons to the more indebted, smaller and less sophisticated countries.