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This paper explores the factors that enabled a significant decarceration process in Chile during the 2010s, challenging the broader trend of punitive policies in Latin America. Despite structural conditions typically associated with high incarceration rates—such as elevated levels of property crime, fear of crime, economic inequality, and media dynamics conducive to punitive responses—Chile experienced a 40% reduction in its prison population during this period. Using a mixed-methods approach, we analyzed administrative prison data (2007–2018) and identified three key drivers of this decarceration: marginal declines in police efficiency, shifts in sentencing practices, and reforms to parole driven by institutional changes in 2012. Through interviews with political actors, we found that this decarceration was the result of a combination of technocratic influences and a deliberate policy choice under various administrations, motivated by modernization imperatives rather than fiscal austerity. This study contributes to the growing literature on decarceration by highlighting how penal policy reforms can emerge from unexpected political contexts, though sustaining such processes remains a challenge in the face of shifting crime dynamics.