Fiscal policy and social protection in Chile

Stable development and financing of the social protection
system, one of the priorities of fiscal policy in Chile over
recent years, has helped to reduce poverty and indigence,
particularly since the 1990s. The fiscal accounts have been
managed prudently, and budgetary balance and efficient
administration have been given priority over short-term
objectives. Even so, poverty is still a fact of life and the
poor are still vulnerable to drastic falls in income. This means
that an effort is still required to modernize fiscal policy and
develop new institutional arrangements for the social
protection system. This paper analyses the challenges
involved and the relationship among the different roles
played by fiscal policy in Chile over recent years.