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Argentina and the IMF: Learning Lessons from Our Experience

Héctor R. Torres

Title:
Argentina and the IMF: Learning Lessons from Our Experience
Author(s):
Torres, Héctor R.
Date:
Type:
Articles
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Notes:
The opinions expressed in these papers represent those of the author(s) and not The Initiative for Policy Dialogue. These papers are unpublished and have not been peer reviewed. Please do not cite without explicit permission from the author(s).
Abstract:
The Fund has already produced an evaluation of the lessons that could be drawn from the crisis in Argentina. That assessment mainly dealt with Argentina's authorities' errors that lead to the crisis and, to some extent, also with the role that the Fund played in supporting those policy failures. This paper analyses Argentina's experience in dealing with the Fund during the aftermath of the crisis3 and draws some lessons on what changes could be introduced into two of the most critical policies of the Fund, i.e. conditionality (on both, structural and macroeconomic objectives) and its role in dealing with full-blown debt crisis. The first section of this paper analyzes whether the structural reforms included in the two arrangements signed with the country after 2002 were strictly critical to the achievement of Argentina's macroeconomic objectives and foremost, regarding its debt sustainability. We conclude that some of the structural conditionality was unnecessary and that when the required reforms are beyond the reach of the government's executive branch, performance criteria could actually backfire.
Subject(s):
Business and economics
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