Chicago Boys - Chile Project

Chile Project

In 1953 Albion Patterson, director in Chile of the US International Cooperation Administration (the organization which would become USAID), met with Theodore Schultz, chair of the University of Chicago economics department, and came up with a plan to counter the developmentalism of which Chile was a leading example. "What we need to do is change the formation of the men, to influence the education, which is very bad", Patterson had previously told a colleague. The plan was simple – to send Chileans to train at the University of Chicago's economics department. Patterson initially approached the University of Chile, the country's leading university, to set up an exchange program, but was turned down after the dean demanded input into who in the US would be training his students. Unwilling to permit this, Patterson went instead to the much more conservative Universidad Católica, which had no economics department at all, and accepted the program. In 1956 that School signed a three-year program of intensive collaboration with the Economics Faculty of the University of Chicago (the "Chile Project").

The program saw the creation of the Center for Latin American Studies at the University of Chicago, at which 100 Chileans pursued advanced degrees from 1957 to 1970. In 1965 the programme was opened to other Latin American countries, with a presence particularly from Argentina, Brazil and Mexico. This expansion was funded from the Ford Foundation. The programme saw 40–50 graduate students in the department at any one time, around a third of the total – and compared to just 4 or 5 Latin American students in other comparable programmes. An internal review from the Ford Foundation found that "although the quality and impact of this endeavour cannot be denied, its ideological narrowness constituted a serious deficiency". It nonetheless continued to fund the program.

A number of the program's graduates took up posts in the Catholic University's economics department; by 1963 12 of 13 faculty members were Chile Project graduates, "rapidly turning it into their own little Chicago School in the middle of Santiago". Program graduates – whether of the Chicago School itself or of the Santiago offshoot – became known as the "Chicago Boys".

Only some of them went later for postgraduate studies at the University of Chicago, where they enrolled in Arnold Harberger's Latin American Finance Workshop and Milton Friedman's Money and Banking Workshop. The whole group was heavily influenced by the Chicago School of Economics, and especially by the writings and public policy proposals of Milton Friedman. Their proposals were not central to Chilean political debate until 1973, where the debate focused on how best to take developmentalism forward and all three major political parties in the 1970 elections favoured nationalization of the copper mines. The first reforms were implemented in three rounds – 1974–1983, 1985, and 1990.