The 1981 privatization of Chilean pensions created immediate winners and ob
servable benefits. It also created a model for Latin American pension refor
m. This study compares the Chilean and Argentine experiences by using polit
ical economy models of social welfare development as a framework for discus
sion. We suggest privatizing pensions could divide workers or create opport
unities for unions to garner control over financial capital investments. Th
e Argentine pension reform may diverge substantially; if unions increase th
eir participation in the pension fund management and worker education. (C)
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