The first case in our study of national decision making regarding participation within regional economic organizations examines the most absolute form of "noncooperation," formal withdrawal from organizational membership. The immediate and specific concern of Chile's military government in the mid-1970s was economic recovery and growth. Every indicator (i.e., the country's balance of payments, external debt burden, inflation, productivity statistics, and unemployment levels) confirmed that Chile's economy was in deep distress.
Junta economic officials, steeped in Friedmanite ideology, were convinced that free market remedies, including elimination of restrictions on trade and foreign investment, were the proper antidote for Chile's economic difficulties. However, these strategies ran counter to regional development plans to which Chile was already committed within the context of its participation in the Andean Pact. Among other things, the Andean Pact's Decision 24 (D24) placed ownership and profit repatriation restrictions on foreign investors in the region. The pact was also considering adopting a comprehensive system of common external tariffs. After 2 years of negotiations aimed at reconciling national and pact policies, Chile withdrew from the pact on October 30, 1976. This chapter examines the incongruity of cognitive frameworks that precluded cooperation between Chile and its pact partners.
Within the global community of states, Chile is a relatively small country (292,257 square miles) with a medium-sized economy, but it