Argentina’s Surprise

This weekend’s vanquishing of incumbent Argentinian President Cristina Fernández de Kirchner sent a powerful signal of change to governments across the region, where populism and statist interventions have produced a decade of economic failure.

Mauricio Macri, the mayor of Buenos Aires, was able to triumph over Kirchner because even as her government claimed to be socially progressive, providing public subsidies for poor families and lowering consumer prices, it had brought Argentina to an economic standstill. Without adequate revenue to finance public investment, Kirchner’s economic model plunged Argentina into deep public debt, and the economy stopped growing. As the central government ran out of money, it defaulted on foreign obligations and printed more money, causing inflation to rise more than 25 percent annually. Not surprisingly, the policies—and mounting evidence of public corruption—generated broad resistance. Not helping were the Kirchner administration’s fights with foreign creditors, attempts to