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Stabilization and Its Discontents: Argentina's Economic Restructuring in the 1990s

Abstract

This paper assesses the Argentine stabilization and market reform strategies since 1989. We argue that Argentina has become hemmed in by its own success: exchange rate targeting quelled inflation, but the resulting overvaluation has limited export and employment growth; microeconomic reforms raised efficiency but have threatened income distribution and hence political stability; exclusive styles of policymaking helped enact reform but have led to corrup-tion and policy insensitivity and contributed to rising social discontent. We close by suggesting how a "second generation" of reforms could tackle these issues and spread the proceeds of reform to a wider segment of the Argentine public.

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