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Democratization Process in Argentina Case Study

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Updated: Apr 2nd, 2019

The politics of Argentina have been described as being eccentric and rather unconventional for various reasons. Economically, the country was rich, but deteriorated to almost bankruptcy between the year 1930 and 2001.

Politically, the country has seen the emergence of autochthonous political movements that have dominated its governance, a good example of which was the most elusive, but relevant example of Peronism (Brennan 64). Socially, Argentina has had a poorly developed middle class.

The region has a conventionally weaker middle class, with universal education barely existing anywhere (Grugel 21). On the international front, Argentina and Cuba have been the countries that have constantly opposed the United State’s foreign policies, even though Argentina never took sides openly, either with the Soviet Union or the Nazi Germany.

In its history, Argentina has been among the most economically developed countries in the Latin America, yet among the least politically stable countries in the region.

Despite having all these peculiarities attributed to it, the Argentine political cycles have been in tandem with the international developments, which have been taking place over time (Petras 26). The country has witnessed frequent breakdown of its democracy followed by re-democratization.

Between the year 1930 and 1976, Argentina experienced six coups d’état. The coups were mainly due to internal conflicts that led to rival alliances, mainly civil-military, to rise against one another.

None of the coups were instigated externally, as was the case in most parts of Central America; neither had the coups ever been caused by indirect involvement of external forces, as was the case of the United State’s support in the ousting of the Chilean president (Tella 43).

However, Argentina’s authoritarian leaders shared periods with their counterparts in the region in implementing key policies economically and in the combating of terrorism.

Regime change, in the region, was not an exclusively domestic phenomenon, but a rather coordinated cooperation among the supporters of the authoritarian regimes in the region, despite the regimes being rivals with one another, in the same measure, as some were friends (Portantiero 31).

In 1946, Domingo Peron ascended to Argentina’s presidency. He introduced corporatist policies in which the institutions that were sanctioned by the state had influence in government. Peron allowed labor leaders distinct privilege, since he had much of his support from the labor union movements.

According to Clarin (19), Peron’s administration appealed to the working class that was less skilled, as well as, the middle class, mainly industrialists who saw the regime as favoring industrial growth, due to the hostile policies of the regime towards foreign corporations.

Peron introduced far-reaching policy initiatives in 1947 that aimed at creating national self-dependence through industries that would sustain military and strategic independence. He nationalized docks and railroads from the British and made possible public ownership of the financial sector.

Through public enterprise, entities were created to supply military goods and other services that were considered essential. His loan policies favored the production of food, machinery and cars (Blanksten 102).

Peron’s government closely controlled foreign trade, and provided differentiated protection to stimulate industries in specified sectors. The protectionism favored plastics, pharmaceuticals and chemicals, which responded with growth that was faster than average.

In a bid to earn favor from the unions and fulfill electoral promises, Peron raised the real wages for workers by 25 percent, which was way ahead of labor productivity increase in Argentina (Clarin 27). As a result, unit labor costs increased more than the nascent industries were able to support.

The social outcry increased while the government increasingly became unstable. Peron had achieved most of the goals he had initially intended by changing the Argentine output structure. However, the economy bore a heavy burden due to his distorted wage policies that saw the country fail to respond to incentives from the comparative advantage point of view.

Argentina fell in international competitiveness as a deficit emerged in its balance of payment. In a desperate bid to maintain stability, the government controlled foreign trade (Pion-Berlin 49). However, the crisis grew leading to escalated foreign debts. Dissatisfied by the government, the military overthrew Peron in 1955.

In 1989, the Peronist party led by Carlos Menem won the presidential elections amid hyperinflation and a shrunken gross domestic product. When he ascended to office, Menem whose campaign had a populist approach executed an unexpectedly neoliberal economic program (Balze 87).

During his first month as president, Menem persuaded the congress, which was already divided to approve a law that would reform the state law and allow an economic emergency in which state enterprises were sold off. The government then embarked on privatization and other reforms with little congressional oversight.

Having minimized interference by the congress in state matters, Menem reduced the independence of the judiciary and enlarged the Supreme Court, which became dominated by appointees loyal to him, and that would shield the courts from challenging the government’s often-controversial policies.

Menem also replaced the fiscal tribunal membership as well as the administrative inquiries’ state attorney unconstitutionally. The justice minister quit his post in 1991 due to his unwillingness to support administration in a plan to replace state prosecutors and independent federal judges with people who were loyal to the president’s agenda (Smith 74).

By early 1990s, Menem had as much power as the previous military dictators in Argentina, something he termed as unavoidable, and it would enable him tackle the looming economic crisis (Paolera 33). Several cabinet ministers resigned from office in 1991 on an allegation of corruption.

In a move to regain credibility, Menem appointed a renowned economist to the post of economic minister, who with assistance from the World Bank overhauled the privatization framework and negotiated for privatization of the airline and highway.

The economy minister helped introduce a new currency whose exchange rate with the American dollar was to remain one-to-one. The move controlled the hyperinflation and sparked rapid economic growth. In 1995, Argentina together with Paraguay, Uruguay, and Brazil created a free trade zone called Mercosur.

Having achieved national and international acclaim for successful reform Menem embarked on constitutional reform and democratization that would enable him to vie for reelection in 1995 (Ferrer 143).

He won the elections. Although he was a Peronist, Menem’s policies differed from Peron’s radically. While Peron emphasized on state-led industries and resisted foreign capital, Menem believed in openness, privatization and liberalization.

Mercosur, under the leadership of Argentina, adopted a democracy clause in 1996 that barred interruption of the constitutional order in any of the member states. Menem’s regime ended in the year 2000 with the country having slipped poverty back with a collapsed economy (McCoy 123).

Kirchner ascended to power in 2003. His regime promoted class bias as the underlying economic recovery strategy. By 2004, Argentina had realized an economic growth of 8.7 percent with unemployment decreasing at 6 percent. The export sector grew rapidly due to devaluation with the agriculture and petroleum sector performing well.

The devaluation also promoted the growth of local industries (). Kirchner’s exchange rate policy had a substantive impact on Argentina’s fiscal balance, which improved revenue via export tariffs.

Argentina, under Kirchner, has also been favored by high international prices for most of its products, while the competitive and stable exchange rate served to aid the macroeconomic policies of the regime. However, Kirchner’s regime has been characterized by high poverty levels, indigence and increasing inequality among the people economically (Weyland 89).

Politically, Kirchner’s regime carried out fundamental changes in the military, judiciary and law enforcement agencies. He replaced corrupt Supreme Court judges that had served under Menem with a team of respected jurists.

He also forced police chiefs and top military generals into retirement, due to inadequate human rights credentials, such as involvement in kidnapping, illicit contraband, and extortion activities (Rapetti 98). He also repealed amnesty, which military generals in the 1976 to 1982 dirty war, had been granted by previous administrations, as well as, fought the bribe-taking tradition that was deep-rooted in the congress.

Through these efforts, Kirchner managed to partially re-legitimize government institutions and improve public confidence in the government. Kirchner carried out many social programs, the most successful of which was in pharmaceuticals.

His government provided drugs in primary care clinics to the low-income families estimated to cover over 15 million people. It also provided drugs, to AIDS victims, while the generic prescription law increased access to prescription drugs, by about 4 million Argentines, who could not previously afford the drugs.

Works Cited

Balze, Felipe. Remaking the Argentine Economy. New York: Council of Foreign Relations Press, 1995. Print.

Blanksten, Glodberg. Peron’s Argentina. New York: Russell & Russell, 1969. Print.

Brennan, James. Region and Nation: Politics, Economics and Society in Twentieth Century Argentina. New York: St. Martin’s Press, 2000. Print.

Clarin, Tella. Argentina under Peron: The Nation’s Experience with a Labor-Based Government. Hong Kong: Macmillan Press, 1983. Print.

Ferrer, Aldo. The Argentine Economy. Los Angeles: University Of California Press, 1967. Print.

Grugel, Riggirozzi. “The Return of the State in Argentina.” Journal of International Affairs 83.1 (2007): 20-26.

Mccoy, Jennifer. Political Learning and Re-Democratization in Latin America: Do

Politicians Learn From Political Crises. Miami: North-South Center Press, 2000. Print.

Paolera, Gerardo. A New Economic History of Argentina. Cambridge: Cambridge University Press, 2010. Print.

Petras, Munck. “Unarmed Utopia Revisited: The Resurgence Of Left of Centre Politics in Latin America.” Journal of Peasant Studies 22.2 (2006): 20-25. Print.

Pion-Berlin, David. The Ideology of State Terror: Economic Doctrine and Political Repression in Argentina and Peru. London: Lynne Rienner Publishers, 1989. Print.

Portantiero, Prebisch. The Political and Economic Crisis in Argentina. Hampshire: Macmillan Publishers, 1989. Print.

Rapetti, Frenkel. “Five Years of Competitive and Stable Real Exchange Rate in Argentina.” International Review of Applied Economics 22.2 (2008): 98-100. Print.

Smith, Roberts. “State, Market and Neoliberalism in Post-Transition Argentina: The Menem Experiment.” Journal of Inter-American Studies and World Affairs 33.4 (1991): 72-76. Print.

Tella, Guido. The Political Economy of Argentina. New York: St. Martin’s Press, 1986. Print.

Weyland, Kurt. The Politics of Market Reform in Fragile Democracies: Argentina, Brazil, Peru and Venezuela. Oxford: Princeton University Press, 2010. Print.

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