From performing to taming markets. Economics making health and transport

The thesis that economic theories perform markets has become widely accepted. In this context, a lot of attention has been paid to economic knowledge that is inscribed in specific calculative devices used by market practitioners. Less attention has been given though to economic arrangements that are rather straight forwardly designed by economics, particularly markets that are developed as social policy (see however the increasing discussion about carbon trade). In this context, economics is not only used to create (or radically reform) an area of social policy, but also, to deal with the amazing amount of unexpected consequences that the newly created markets bring. This article focuses in such type of processes.

This article develops a comparative historical exploration of the performance of two quite different markets in Chile: health insurance and public transport. Both cases were part of a common state project that looked to economize social care in the country, however knowledge has played a different role in each of them. On the one hand, the private health insurance was created without previous research (based mostly on a simple laissez faire principle), but an important amount of expert discussion has been developed in order to understand the particularities that make this market to work quite differently to how it was expected. On the other, public transport early reforms were also based on “deregulation”, but later on became a laboratory to test very sophisticated market-based policy instruments.

Through the similarities and differences between both stories this paper will make the case that more attention has to be paid to economic knowledge that is used, not only to “make” a new market, but to tame them.