Accounting and Chilean pension
reform
Darlene Himick
Haskayne School of Business, University of Calgary, Calgary, Canada
Abstract
Purpose – The purpose of this paper is to shed light on accounting’s role in bringing about a pension
reform project in Chile under the authoritarian regime of Augusto Pinochet. The paper aims to reveal
the specific role that the pension reform played in the regime’s broader ideological goals, thus
highlighting the need to reflect upon its origins when considering the reform as a template for pension
change in other parts of the world.
Design/methodology/approach – The study brings together archival research showing
accounting in its relation to broader structural and institutional structures, to present an alternative
history of the development and implementation of the pension reform.
Findings – The pension reform was not merely a rationally chosen economic reform project. It was
part of a vast modernization and institutionalization programme to change Chilean society and the
mindset of its citizens. Accounting played a significant role in both the administration and functioning
of the project, and in enabling the broader modernizations to take hold.
Practical implications – The Chilean pension model is held up as a fully-exportable template to
other jurisdictions. The study reveals how reflection is required to determine its suitability and
potential for success in other situations, given the very specific role it was intended to play in its
original setting.
Originality/value – This paper represents an under-researched geographic setting, and also
questions this much-lauded pension model’s appropriateness for other settings.
Keywords Accounting, Chile, Pensions, Privatization
Paper type Research paper
1. Introduction
My ideas for social security reform were then part of an overall vision of a free market and a
free society in Chile (Pin
˜
era, 2005).
With issues such as aging demographics, improper management of pension assets, and
the downfall of Enron and its pension plan collapse, the topic of pensions has captured
the attention of public policy makers. Neither developed nor developing countries have
been immune to this debate. Countries as disparate as Canada, Poland, Argentina, and
Sweden have all recently considered how best to handle the design and implementation
of old-age security systems.
One of the touchstones in almost all of these debates has been the Chilean model of a
privatised, national pension system[1]. Twenty-five years ago under the military
dictatorship of Augusto Pinochet, Chile reformed its state provided social security
system to one based on a free market mentality and individual responsibility. Today,
that system still stands – although its effectiveness has been a subject of continual
debate. The model has been used as the template for pension reform globally, and its
originator, Jose
´
Pin
˜
era, has marketed it worldwide. The World Bank has adopted the
model in its pension reforms in some 80 countries worldwide[2]. Even the USA has
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Accounting and
Chilean pension
reform
405
Received 16 May 2007
Revised 17 July 2008
Accepted 12 September
2008
Accounting, Auditing &
Accountability Journal
Vol. 22 No. 3, 2009
pp. 405-428
q Emerald Group Publishing Limited
0951-3574
DOI 10.1108/09513570910945679