Chile Is Swinging to the Right, but What Right?

Chile, once the economic shining star of Latin America, may be ready to end its tortured romance with revolutionary socialism and show the rest of the region (once again) how a vibrant free economy benefits the people.

But first, there’s a presidential runoff election to be won on Dec. 14—and Jose Antonio Kast, the conservative in the race, will not only have to win the runoff against Jeannette Jara, a Communist Party member of Chile’s ruling left-wing coalition, he’ll have to show he can build a coalition of his own, bringing together all the elements of the disparate right.

The first round of Chile’s presidential election, which concluded Nov. 16, is being interpreted as a rejection of the past six years of ideological and political dominance by the revolutionary left, led by current President Gabriel Boric. During these six years, Chile’s economy has barely grown, swinging wildly, according to a World Bank analysis, from 4% growth in 2018 to 0.6% in 2019, -6.1% in 2020, 11.3% in 2021, 2.2% in 2022, 0.5% in 2023 and 2.6% in 2024.

Mr. Kast, who received some 24% of the vote in the first round to Ms. Jara’s nearly 27%, is considered the odds-on favorite in the runoff—because the other top vote-getters in the preliminary vote also were right of center.

But winning is one thing, governing another. To do that, Mr. Kast will have to form a coalition government, including elements of the populist right (so populist that in some respects it can be confused with the populist left), led by Franco Parisi, who achieved a surprising third place in the preliminary vote with almost 18%, the libertarian right, led by Johannes Kaiser, who received almost 14%, and the traditional center-right led by Evelyn Matthei, who finished fifth.

That Chile has veered to the right also is confirmed by the fact that candidates representing right-of-center parties claimed a combined 76 seats in the Chamber of Deputies, the equivalent of the U.S. House of Representatives, just one short of the 77 seats needed for a simple majority. Conservatives also claimed half the Senate seats.

The rightward shift is consistent with recent trends elsewhere in Latin America. In Bolivia, once a bastion of the populist left, a (sort of) free-market president is now in power, supported by an outspoken free-market leader in the Bolivian Congress. In Peru and Colombia, meanwhile, where elections will be held next year, the right is ahead in the polls. And in Argentina, another free-market advocate—President Javier Milei—recently received a strong vote of confidence in the country’s mid-term elections (thanks to a decidedly non-free market bailout from the United States.)

Even if Mr. Kast wins in December, Chile still faces two major problems. One is defining what kind of “right” Mr. Kast—who believes in the free market but also in a highly interventionist social conservatism—is going to institute. He has, among other things, promised to reduce government spending (which stood at about $25.9 billion in fiscal 2024) by some $6 billion, a colossal undertaking in a society that has become addicted to profligate spending.

The other problem is whether he will be able to put together a coalition that makes his reform program politically viable. That coalition likely will include not only members of his own party, but radical free-marketeers (Mr. Kaiser’s libertarians), economic nationalists (some of the Parisi populists), gradualists (Ms. Matthei’s traditional right) and others on the populist right, who have few convictions and shifting priorities.

Mr. Kast is hoping that a landslide win in the second round will create the conditions for a reasonably coherent coalition of the right. If not, and Mr. Kast is unable to engage in major free-market reforms, Mr. Boric—a revolutionary hothead who is still young and enjoys a consistent approval rating of around 30%—could make a comeback.

As I found on a recent trip, many Chileans believe Boric is interested in a resounding Kast victory in the runoff that will discredit Ms. Jara, followed by a dysfunctional new government that shows Mr. Kast unable to govern due to the many incompatible factions on the right.

Whatever the case, Chile has a fresh chance to renew its status as Latin America’s freest and best-performing economy. Stay tuned.