Strength and commitment of the state: It takes two to tango - A case studyof economic reforms in Argentina in the 1990s

This paper addresses the question of why radical economic reforms became a reality in Argentina in the 1990s by concentrating on the political and ins titutional dimensions of economic policy reform. It presents a framework fo r analyzing the determinants of the quality of economic institutions, notab ly the political commitment of the state to provide property and contract r ights, and its administrative capacity (``strength'') in implementing them. The framework is applied to Argentina under the government of president Ca rlos Menem. The results of an empirical analysis clearly show an improvemen t in institutional quality, the state strength and commitment during Menem' s first term. In turn, during his second term, the indicators show ongoing signs of decline. Considering the prospects for Argentina in the near futur e, deficiencies of commitment with regard to democratic control mechanisms represent a permanent threat to the economic reforms realized so far.