Institutional Determinants of the Argentinean Crisis: A Systemic Approach

The explanations given for the Argentinean crisis are fragmentary and center almost exclusively on the causal relationships among economic variables. This study builds on the interpretations that various economists have presented regarding the Argentinean crisis. Based on identified factors, a conceptual approach is used to expose the systemic and dynamic nature of the crisis and to permit an analysis of the interrelationship among the economic, political and institutional factors that triggered it. The article contends that in addition to economic and financial factors, the Argentinean crisis was aggravated due to: (1) institutional frailty, inadequate political management, and lack of transparency, which led to increasing instability and uncertainty; and (2) institutional weakness and obsolescence, which hindered reform consolidation and juridical standards for guaranteeing property rights and adherence to contracts. The article also maintains that the solutions to the crisis required the coordinated actions of different economic and political agents within the framework of a new social pact.