Chile, the Chicago Boys, and Economic Outcomes

What the former Finance Minister of Chile Andres Velasco has called the Deliveroo effect is most evident in Poland. Despite unprecedented economic growth and prosperity, Velasco explains, Poles remain miserable. The problem, he suggests, is that we’ve become so used to the magical efficiencies of the digital revolution, that we expect instant miracles in both our political and economic lives. That’s one of the core issues Velasco, now Dean of Public Policy at the London School of Economics, and a group of leading public policy experts address in an intriguing collection of essays entitled The London Consensus. What the authors - who include Philippe Aghion, the 2025 Nobel Prize winner in economics - explore is how to come up with economic principles for the 21st Century that make us both happier and more prosperous, while confronting an existential challenge like climate change that didn’t even register in last century’s Washington Consensus. But democracy, Velasco warns, can’t work like a delivery app. We’ve layered regulations and participatory processes that slow everything down—making it nearly impossible to build housing in California or infrastructure anywhere in the West—while personalized technology trains us to expect results immediately. This fundamental mismatch between our expectations and reality is fueling authoritarian populism, eroding trust in experts like Velasco, and Aghion, and leaving entire regions behind in a Deliveroo stew of economic failure and cultural resentment.

1. The “Deliveroo Effect” Is Breaking Democracy We’ve become so accustomed to instant digital gratification that we expect the same speed from politics and economics. But democracy requires deliberation, participation, and time—creating a dangerous mismatch between expectations and reality that fuels populism and dissatisfaction. Even prosperous countries like Poland, the second-fastest growing economy since 1990, remain bitterly divided.

2. The Washington Consensus Got Politics Catastrophically Wrong The 1989 economic framework naively assumed you could “sort out the economics” and democracy would naturally follow. It ignored local ownership of policies and believed growth alone would create liberal democracies. China’s experience—getting rich without democratizing—proved this assumption completely wrong. The London Consensus puts politics at the center.

3. Markets Need States, Not “Free Markets” Versus Government The old ideological battle between markets and socialism was never productive. Markets can’t function without capable states to enforce rules, regulate finance, and provide infrastructure. The real debate isn’t whether to have government intervention, but what kind—finding the delicate balance between competition and regulation that fosters innovation without allowing excessive monopoly power.

4. “Left-Behind Regions” Are Driving Political Upheaval Trade and technology create geographically concentrated losses—the Rust Belt, northern England—that go beyond economics. These regions experience social breakdown, population flight, and feelings of abandonment that translate directly into votes for demagogues and populists. Compensating losers from globalization wasn’t just economically smart; it was politically essential.

5. We Need a “Good Jobs Agenda,” Not Just Growth Following economists like Dani Rodrik and Daron Acemoglu, the London Consensus argues that policy should be evaluated through the lens of job quality, not just GDP growth. Technology isn’t destiny—it can be directed toward complementing human skills rather than destroying jobs. Every policy, from trade to AI regulation, should ask: will this create quality jobs with decent pay, benefits, and worker agency?

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