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ABSTRACT. Small-scale fisheries, which are often associated with low levels of income and poor infrastructure, receive substantial funding from governmental institutions worldwide. Very few empirical studies have explored the outcomes of these investments for people and ecosystems. This paper presents the findings of a study aimed at assessing the social and ecological outcomes of government subsidies for small-scale fisheries through an analysis of 32 fishing villages, referred to as caletas, in Chile over a 12-year period. Findings suggest that the funding appears to be higher for those caletas with the highest value landings and is unrelated to socioeconomic need or poverty; that caletas in rural areas receive less investment than their urban counterparts; that funding did not lead to a positive improvement in either the landings or income for fishers; and, finally, that funding appears to be a consequence of, rather than a reason for, the ecological and productive history of fisheries. These findings challenge two assumptions informing the debate about subsidization in small-scale fisheries: first, that subsidization will lead to over-exploitation, and second, that subsidies are supplied to alleviate poverty.