Beyond the diffusion of neoliberalism: Embedded reasoning and policy innovation in the origins of Argentinian currency board

Abstract

Suffering from high rates of inflation since the 1940’s and having experienced two hyperinflations at the end of the 1980s, Argentina faced in 2019 an increase of prices of more than 50%. But in the 1990s, Argentina achieved at once prices stability and growth. Which were the sources of such an immediate change? Which lessons can be drawn from this experience? As in the 1990s Argentina adopted deep market reforms, stability could be considered an achievement of neoliberal diffusion. Not only international forces were driving forces for the change; the International Monetary Found (IMF) celebrated the success and invited other emerging nations to imitate it. Nevertheless, this perspective underestimates the importance of local context in the history of neoliberal reforms and overestimates the coherence of external forces. Through the analyses of testimonies of Argentine and foreign officials and the study of declassified documents from the IMF, this paper argues that stability was only archived after the adoption of a currency board, which was against the recommendation of most foreign officials. Instead of a simple top-down transposition of ideas, the Argentinian case reveals the importance of technocrats’ agency. Their local innovation not only made the diffusion of neoliberalism possible, it also turned currency board into one of the global anti-inflationist recipes recommended to other countries, despise its heavy consequences.