But for various parochial reasons, the Chilean model has been modified wherever it's been tried. Those modifications have produced predictably diluted outcomes. Although workers in these countries have been switching into private sector pension plans, the rate of conversion has been much slower than in Chile. This has led critics to deduce that pension reform only succeeded in Chile because of the unique nature of the country, the people and the political culture. They are wrong.
Pension reform can work anywhere.
In fact, the Chilean model itself is portable. And now that high domestic savings rates are the lofty goal of reformers world-wide, it's worthwhile comparing the Chilean model that proves so successful with other schemes that produced only mediocre results. The obvious goal is, or at least should be, to provide good pensions to the greatest number of workers at the least cost. A competitive, consumer-driven market has reduced costs, improved service, motivated savers and enhanced returns. This was critical because otherwise it would have remained a fiscal drag on economic growth.