one of the main themes in the link is (imho) anger at a lack of trust - the need to justify each expense, and to follow somewhat arbitrary rules, even after winning the grant. and that (again, imho) reflects a difference in culture between americans and chileans. in support of this thesis, there was a chilean presentation at startechconf (the recent web dev / technical conference in santiago) that seemed (i admit i left part-way through in search of a more technical talk) to be arguing the same point: that chileans need to trust each other more. my own amateur anthropological take on this is that the difference comes from chilean trust networks being based on family ties rather than professional relationships.
it will be interesting to see if the technocrats/bureaucrats that saw startup chile as a way to "educate chileans" will themselves learn from this. to the credit of chilean society, "they" (sorry) do (yet again imho) take criticism - particularly from outside - quite seriously, so i think there is a real possibility of change.
[edit: the talk was "Agustín Villena:
Que mantener, arreglar e intentar en la industria chilena de software" http://www.slideboom.com/presentations/440025/Que-mejorar,-m... - slide 11, 89% of Chileans don't trust their neighbours]
They should have picked me, dammit:-) After years of living in Italy, these sorts of bureaucratic hurdles are easy to deal with. And I may not have an awesome, world changing startup, but at least my niche effort makes money, and... I've been around. I have war stories!
Maybe, but I doubt it. The problem is that Latin American societies, and to a lesser extent Southern European countries, are fundamentally lower trust societies than northern European ones, and especially the Anglo-sphere. While there is possibility of change, it will be a slow, hard process. (For a historical example of the difference, compare the development of Japan, a high trust society, with that of China, which is lower trust.)