The Quest for Institutional Stability: Fiscal Distributive Policies and Economic Crises in Argentina, 2002-2023

Abstract

In the early 2000s, Argentina was an example of heterodox economic policies. However, it never solved political demands over public expenditures, and profligate policies affected the stability of the model. Two decades later, the country faces another crisis. In this context, Javier Milei is a disruptive force promoting drastic changes. This paper shows how the interaction of political demands undermined economic stability, leading to recurring crises. Accordingly, Javier Milei gained widespread support as a backlash to the political establishment. Argentina's ability to promote inclusive and sustainable economic growth and employment depends on consensus on government expenditure limits and economic stability.

Keywords: sustainable economic growth, economic development, political economy, fiscal policy, monetary policy, macroeconomic stability, economic crises, populism, neoliberalism, Argentina

JEL Classification: E02, E13, E14, E31, E44, E52, E58, E62, E65, H62, H63, O11, O23, O43, O54, P17