In 2012, I wrote that pro-market reforms had turned Chile into the Latin Tiger.

But two years later, in 2014, I wrote a column fretting that a recently elected left-leaning government was going to undermine prosperity.

Based on the Maddison data, my concerns were justified. The country’s economic performance can be divided into three periods.

• Chile endured very sluggish growth after World War II, with inflation-adjusted annual growth averaging less than 1 percent from 1950-1975.
• Chile enjoyed an economic boom following a period of economic liberalization (thanks to the “Chicago Boys“), with inflation-adjusted annual growth of more than 3 percent between 1975-2014.
• Chile has regressed in recent years, with inflation-adjusted annual growth of less than 1 percent since 2014.

In other words, a positive trajectory that seems to have ended.

This does not mean Chile is a failure.

Our next visual, from Economic Freedom of the World, shows that Chile is still the most economically free nation in South America and the 26th-freest economy in the world.

However, it’s score for economic liberty has declined over the past 10 years or so.

And while 26th place is a good result, especially by Latin American standards, Chile used to have one of the world’s 10-freest economies.

One indication of Chile’s slippage is that the burden of government spending has increased over the past two decades according to IMF data.

And when spending is growing too fast, one of the common consequences is that debt increases as well.

That’s the bad news. Fiscal policy is trending in the wrong direction.

The good news is that a spending burden of less than 25 percent of GDP is still somewhat impressive by world standards. As is a debt burden of less than 45 percent of GDP.

The United States is far worse in both categories!

Now let’s look at some more potentially good news. Chileans elected a new right-leaning president in November of last year, Jose Antonio Kast.

He replaces a hard-core leftist (who fortunately was mostly thwarted in his efforts to move Chile dramatically in the wrong direction).

And President Kast is already making progress, as seen in these excerpts from a Reuters report by Fabian Cambero.

Chile’s Congress on Tuesday approved a sweeping reform ‌package championed by President Jose Antonio Kast, aimed at reviving growth…through corporate tax cuts and incentives for investment. …The so-called “mega-reform” is Kast’s ​flagship economic bill. He took office in March promising to revive Chile’s economy after years of sluggish growth. …The reform — which amends 36 laws and 15 decrees — includes a gradual cut in the corporate tax ​rate to 23% by 2029 from 27% currently.

The reform also includes other positive changes, such as less double taxation of business income (a reform that is needed in the U.S.).

For what it’s worth, I’m currently in Santiago, where my remarks to both journalists and audiences have stressed that Kast’s government needs to also reduce the burden of government spending.

I specifically recommended a spending cap. Something akin to the Swiss system, which is the global gold standard.

P.S. I also praised Chileans for their private social security model, which I’ve calculated in the world’s third-best system. It’s also another reform desperately needed in the United States because of looming demographic changes.

P.P.S. As you might suspect, Chile’s period of rapid growth has been especially beneficial to low-income Chileans.

P.P.P.S. Some entities – such as the OECD and New York Times – seemingly don’t want Chile to prosper.