Volume 44, Number 173,
April-June 2013
Towards a New Development Model?
from a Regulatory Perspective. Argentina 2003-2010
Ignacio de Angelis, Mariana Calvento and Mariano Roark
Institutional Forms: The Market ( ...continuation )

It must be stated that the laws inherited from the last military dictatorship regulating financial activities and foreign investment were mainly left in place, and as such, the legal framework was effectively a disincentive to the real economy by redirecting investment flows to financial speculation and allowing foreign companies to repatriate their profits instead of reinvesting them.

In summary, the analysis of this institutional form sheds light on some aspects that allow us to examine a process of change in the specific dynamics of growth and market behavior during this time period, while keeping in mind that elements of the inherited neoliberal structure still exist.

Institutional Forms: The State

The State is the omnipresent structure behind the regulation mode. Its institutional form is defined by Robert Boyer as the “set of institutionalized commitments that, once achieved, create rules and norms in the evolution of spending and public revenue” (Boyer and Seillard, 1997: 208). The State assumes a variety of functions in handling conflicts that arise from social relations. Its actions are decisive in creating the institutional commitments that regulate the behavior of all other actors.

In regulation theory, the State does not have total control over economic variables, but nor is it a State that merely serves as a tool for the ruling classes. In the game of dialectic correlation between economy and policy, where the dynamics are reciprocally influential, the State shapes interactions with all other institutional forms. That is why the regulation school emphasizes policy as a factor within the State configuration and a fundamental dynamic in economic interactions.

Starting in 2003, the role of the State began to change towards that of strategically planning development. This process was generated by the drive for new policy management, which sought to strengthen an efficient State and its capacity to direct fair economic growth and arbitrate conflicts of interest.

One of the first concrete signs of strengthened state management was during the Kirchner government,6 which renegotiated and regulated contracts with multinational public service providing companies and renationalized some privatized companies that had defaulted on their contractual commitments, considered as strategic for the new development model.

Along the same vein, the new administration negotiated and restructured the external debt, which resulted in a transcendental reduction in capital and interest and the rescheduling of maturities,7 as another illustration of the revaluation of policy as a development tool. The new administration also fully repaid all debt with the imf in 2005, marking the end of a long history of orthodox tutelage regarding the national development strategy.

This decompression and disposal of assets previously destined to pay the debt, in combination with an important increase in tax collection, led to the progressive restructuring of public spending (which went from representing 29% of gdp in 2003 to 43% in 2009). As a result, starting in 2007, there were signs of a new macroeconomic configuration of public spending, mainly oriented towards social spending with significant budget increases for education, health and social pensions.

6 Other fundamental initiatives in the time period 2003-2010, which also illustrate the change in direction for policy management, include: changing the composition of the Supreme Court to justices with impeccable records, the Human Rights policy implemented in 2003 and the revival of trials for those responsible for crimes against humanity during the last dictatorship following the repeal of the Law of Due Obedience and the Full Stop Law, the recognition of the legitimacy of social protest and its decriminalization, the approval of the Audiovisual Communication Services Law and the later replacement of the Radio Distribution Law inherited from the military dictatorship to regulate democratic access to the communication media.

7 As a result, public sector debt went from representing nearly 150% of total aggregate value in 2002 to 44.6% in 2010.

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PROBLEMAS DEL DESARROLLO. REVISTA LATINOAMERICANA DE ECONOMÍA, Volume 49, Number 194 July-September 2018 is a quarterly publication by the Universidad Nacional Autónoma de México, Ciudad Universitaria, Coyoacán, CP 04510, México, D.F. by Instituto de Investigaciones Económicas, Circuito Mario de la Cueva, Ciudad Universitaria, Coyoacán,
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