Abstract

"The Achievements and Failures of Argentina's Neo-Liberal Economic Policies"

Werner Baer, Pedro Elosegui, and Andres Gallo

First Author :

Werner Baer
Economics
University of Illinois at Urbana-Champaign
1206 S. Sixth Street, M/C 706
Champaign, IL 61820
USA

wbaer@uiuc.edu

http://www.business.uiuc.edu/faculty/baer.html

Second Author :

Pedro Elosegui
Harvard University

pelosegui@cfa.harvard.edu

Third Author :

Andres Gallo
Economics
University of Illinois at Urbana-Champaign
1206 S. Sixth Street, M/C 706
Champaign, IL 61820
USA

agallo@students.uiuc.edu

Abstract :

The stability of an economic policy regime depends in large measure on either its successful authoritarian imposition or on the general acceptance by society of the distributional status quo of assets and/or income. Although Argentina's convertibility Plan ("Currency Board" system) brought price stability and growth to the country, the inability or unwillingness of the government to attain a fiscal adjustment threatened its survival. The "fight for shares" in this "conflict society", which was inherited from previous regimes, was never resolved. We show that this fight previously left unresolved through inflationary finance, was left unresolved through the rapid growth of indebtedness under the Convertibility Plan. From 1999 on, the contradictions of the Plan had become obvious and it was clear that the key to future stable economic growth was dependent on finding a way to turn the "conflict society" into a "consensus society." The construction of such a society is still a pending task for Argentina.

Manuscript Received : 2001

Manuscript Published : 2001

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