A big gift?: Copper in Chile, institutional framework and rent

Politics and Economy
Paper author(s): 
Benjamin Leiva (Universidad de Chile)

Copper Rent has and continues to be a controversial issue. In this paper, appropriations of Rent by major mining companies in Chile since the 1990´s are analyzed both inter-temporarily and quantitatively. Results indicate that, although not all of them, some in fact have appropriated Rent. The consequences of this are losses of equality, potential losses of efficiency, and the loss of about US$40.72 billion in highly neutral tax collection. This truly constitutes a gift that this nation has made; resources that the State has forgone for private gain. To establish an institutional framework for mining that emends this situation for future concessions, as well as dealing with the inadequate institutional framework of the current ones, remain central challenges for Chile to enjoy plentifully its mining potential.