Shooting for Reform. The Interplay of External and Domestic Constraints in Argentina

Abstract

In the context of a global order where markets are more open and interdependent, the policy revolution in developing countries can be looked upon as an adaptive process whereby countries have grappled to extract the best of the new economic conditions. Starting in the late 1980s and into the 1990s, Latin America also took on this policy revolution and succeeded in obtaining a measure of stabilization unknown in its recent history. Although the timing and degree of the policy revolution has differed, the direction has been the same. The implementation and success of reforms, however, have been uneven. In some cases (Argentina being an example) economic achievements were short lived. The temporary success of economic reforms has been dampened since 1995 by several international crises that hit the Argentine economy, leading to lower levels of growth, increasing recession and soaring unemployment. By December 2001, Argentina’s ‘convertibility success story’ was crushed by one of its most severe economic and political crises.