Leaving Populism Behind: Lessons from Argentina 2015-19
with guest speaker Luciano Laspina, House of Representatives, Argentina
April 26, 2-3:30 M-RCBG Conference Room (Belfer 503)

Just recently, in 2017, Cambridge University Press revealed “populism” as Word of the Year. Regarding populism, however, Argentina has a very long tradition. It is perhaps one of the most prolific countries in the generation of administrations, political leaders, and inconsistent distributive economic policies in the last 75 years.

The Argentine society has been trapped for so long in a decadent cycle of "populist-corporatist" experiments followed by attempts to impose a "republican-liberal" model. The circularity responds to the social and political difficulties to abandon populist policies. Once the populist experiments collapse -as a consequence of inconsistent macroeconomic policies, unsustainable distributive policies, high fiscal deficits and stagflation- the inertia of economic policies and the resiliency of corporative structures severely limit the margins of maneuver of governments to manage economic transition to a stable market-oriented economy. 

Typically (and tragically), the economic recession, the social dissatisfaction and the political fragility suffered by governments in their attempts to stabilize the economy sow the seeds for the return of populism. The corrections of macroeconomic imbalances, often painful in social terms, generate the political and material conditions for the triumphant return of populist policies. Argentina has been trapped in this vicious cycle for a very long time.

In this study group, we will review the literature on populism in Latin America, with a special emphasis on the "macroeconomics of populism” as described by Dornbusch and Edwards (1990), as a simple conceptual framework for the debate. Then, we will revisit the political and economic strategy followed in Argentina by President Mauricio Macri since December 2015 to try to leave behind more than a decade of populist policies. We will seek to explore the economic conditions, the political incentives, and the internal tensions inside the government coalition that shaped the official strategy. Finally, we will analyze the results and extract some conclusions.

Luciano LaspinaLuciano Laspina has been representative and Chairman of the Budget Committee at the Argentine House of Representatives since 2015. He is member of CAMBIEMOS, the political coalition led by President Mauricio Macri. During his tenure, Mr. Laspina headed the negotiations at the Congress of key laws of fiscal, tax and financial reforms that laid the foundations for a recovery of sovereign credit and fiscal consolidation during the first years of President Macri´s administration. Previously, he was Chief Economist and CFO of Banco Ciudad, the state-owned bank of the city of Buenos Aires.He also served as advisor to the President of the Argentine Central Bank and advisor to the Secretary of Economic Policy at the Ministry of Economy. 
Mr. Laspina has a degree in Economics from Universidad Nacional de Rosario and holds a Master in Economics from Universidad del CEMA. He was professor at Universidad Di Tella in Buenos Aires where he taught Banking Regulations and Macroeconomics and was Director of the Banking Management Program. 

 Demian ReidelDemian Reidel served as Deputy Governor and member of the Board of the Central Bank of Argentina from 2015 until 2018. He was appointed as part of the new leadership of the Central Bank upon President Macri’s election. Dr. Reidel was a member of the Monetary Policy Committee, which for the first time in Argentina’s history designed and implemented an inflation target regime with a flexible exchange rate. As a member of the Board, he oversaw the Central Bank’s prudential oversight responsibilities, including regulation of financial institutions. During his tenure, Dr. Reidel also served as the representative of the Central Bank at the G20. In this role, he designed the priorities of the G20 Finance Track during Argentina’s presidency of the G20 in collaboration with the Ministry of Finance. Previously, Dr. Reidel co-founded and was a principal portfolio manager at QFR, a New York City-based global macro hedge fund specializing in FX, fixed income and credit investments. QFR grew over $3 billion in assets under management during his tenure. Before founding QFR, Dr. Reidel was a senior member of the Emerging Markets Research team at Goldman Sachs in New York City and, prior to that, he worked in a similar capacity at JP Morgan in New York City, London and Buenos Aires. Dr. Reidel was a Professor at Universidad Di Tella in Buenos Aires where he taught asset valuation in the Finance Masters Program. Dr. Reidel holds a PhD in economics from Harvard University in the fields of international economics and finance. He also holds an MS in Financial Mathematics from the University of Chicago and a BS and MS in Physics from Instituto Balseiro. Dr. Reidel’s Faculty sponsor is Professor Ken Rogoff. Email: demian_reidel@hks.harvard.edu Twitter: @dreidel1