Six months of Javier Milei

It has been 8 months since the inauguration of the Javier Milei administration. His rise to power marks an unprecedented event in Argentine politics. Until 2021, when he stepped into politics and ran for a deputy seat in the city of Buenos Aires, Milei, who besides his role as an economic advisor at Corporación América—a large business conglomerate—had been a frequent guest on television shows, levying strong criticism toward both Kirchnerism and Mauricio Macri's economic policies, advocating for a sharp reduction in the state apparatus and sweeping market reform aggressiveness displayed toward his critics and rivals. In 2021, he founded La Libertad Avanza, a small party that competed in that year's mid-term election, obtaining 17% of the vote in the city of Buenos Aires and gaining two Chamber of Deputies seats. While not uncommon in other countries, Javier Milei is the first case in Argentina of a presidential candidacy crafted on a television set and social media. His constant presence on shows made him popular across the country against the backdrop of the severe economic decay and deterioration of social indicators that Argentina has experienced over the past 14 years. To many observers, his unexpected victory in the November 19 presidential runoff was a major blow to Argentine politics and the country's establishment. His first-place showing in the August 13 presidential primaries had already dealt a shock to Argentina's political elites. There was some expectation before the August open, simultaneous, and compulsory primaries (PASO in Spanish) that Milei could end up being the candidate with the most votes at the individual level, but it was believed that the aggregate vote of the main opposition coalition Juntos por el Cambio and of the ruling Frente de Todos, both of which had competitive primaries, would surpass La Libertad Avanza's candidate. The election of outsiders has been a common phenomenon in Latin America since the beginning of the third wave of democratization, but until last year's election, Argentina had not experienced it. The resilience of Peronism and the strength of its partisan apparatus apparently posed a strong barrier for an outsider lacking a strong partisan structure. Furthermore, Argentina's electoral system stood as an obstacle to the rise of outsiders. The PASO, which have effectively turned the presidential election into a three-round system, and the use of paper ballots, which requires a large apparatus to monitor the electoral process, allegedly provided Argentine politics with a bullet-proof jacket that safeguarded its polity from outsiders. Yet, against all odds, Javier Milei surprisingly ended up as the candidate with the most votes in the August PASO, at 31%, dealing the first blow to Argentina's partisan establishment; he obtained 29% support in the October first round, placing him in second place behind Sergio Massa, whom he defeated in the November 19 runoff by a much larger margin than expected (Labaqui, 2023a). Elected with an 11-point advantage in the presidential second round, Milei's party only held 10% and 15% of the Senate and Chamber of Deputies seats, effectively becoming Argentina's weakest head of state in legislative terms since the democratic restoration in 1983. As is well known, Milei's initial economic package resulted in an acceleration of Argentina's already high inflation rate, presumably leading to a further deterioration of poverty rates and deepening the pre-existing decline in economic activity. Yet, after 6 months in office, Milei's approval ratings remained surprisingly high, according to various public opinion polls raising questions about social tolerance to fiscal austerity and economic adjustment. In this sense, Milei's rise in Argentine politics poses a fascinating set of questions that are relevant both from an empirical and theoretical standpoint. As stated, the rise of populist outsiders (and as I shall describe later, this label fits Milei's leadership strategy and style perfectly) has not been unusual in Latin America but is rather uncommon in Argentina.1 By this token, it is worth questioning what lies behind his stunning ascent to power. The emergence of populist leaders has typically been associated with the deinstitutionalization of party systems (Levitsky Mainwaring, 2018; Mainwaring Monestier Torre, 2003). The creation of Cambiemos in 2015—an alliance between Macri's Propuesta Republicana (PRO), the Unión Cívica Radical (UCR). and the Coalición Cívica—resulted in the first victory at the national level of a non-Peronist coalition since the demise of the Alianza—the coalition of the radical party and the center-left Frepaso—in 2001. Both the victory of Cambiemos (later rebranded as Juntos por el Cambio) in 2015 and the Peronist comeback (under the Frente de Todos label, which brought together different Peronist factions that had quit the party during the Kirchner era) in 2019 suggested that Argentine politics were evolving toward a two-coalition system. Paradoxically, the degree of institutionalization in partisan representation exhibited a sharp contrast with the disappointing performance of Argentina's ruling coalitions. The 2020 Covid-19 pandemic exacerbated Argentina's economic problems. The Fernández administration's (2019–2023) decision to tie its fate to rigid enforcement of social distancing measures, coupled with the further economic deterioration brought about by the pandemic, provided the political space for the type of discourse Milei had been putting forth since his emergence in the public sphere, initially as an economic analyst who frequently participated on television shows. Bearing in mind Argentina's declining economic performance in the decade following the commodities boom of the 2000s, the question is not so much how Milei managed to defeat Argentina's partisan establishment but why it took so long to happen. A victory of Sergio Massa, who had been responsible for the Fernandez administration's economic policy since August 2022, would have been abnormal for a variety of reasons. From 2018 to 2023, the only ruling party that managed to win a presidential election in a democratic setting in Latin America was the Colorado Party in Paraguay. The poor economic performance of the Fernández administration, which saw a further acceleration of inflation particularly during Massa's tenure in the Ministry of Economy, made Argentina an unlikely candidate to break the regional anti-incumbent wave. See Table 1. Certainly, Massa was close to striking a first-round victory thanks to Argentina's presidential election rules that require 40% support and a 10-point advantage to avoid a second round. Since Massa had failed to avoid a runoff election, the likelihood of his victory was certainly low. In the first place, Massa failed to achieve a decisive lead in the first round. Reversal of the first-round result has occurred in 35% of elections decided through a second round in Latin America since the beginning of the third wave of democratization. Still, the phenomenon has become more frequent in recent years—12 of the 22 cases of runoff reversal have occurred within the last decade. See Table 2. Second, the poor economic performance of the Fernández administration and particularly of Massa as minister of economy made his triumph a highly unlikely event. Except for the case of Fernando Henrique Cardoso in Brazil in 1994, no presidential candidate from a ruling party or coalition has won an election in Latin America since the beginning of the third wave of democratization when there has been an annual inflation rate above 40% (Labaqui, 2023a). See Table 3. Mainwaring (2018) has argued that poor government performance makes political parties vulnerable to profound electoral losses, effectively undermining the stability of the party system. The case of Argentina's 2023 election fits well with Mainwaring's argument. Not only did Peronism have its worst electoral showing in a presidential election since its emergence in Argentine politics in the 1940s, but also what until then had been the main opposition coalition, Juntos por el Cambio, underwent a dramatic electoral decline that left it out of the November 19 s round. Three consecutive administrations disappointed citizens' expectations, handing power to their successor in worse conditions than those they had received, creating the space for the surge of a populist outsider. Milei's emergence in Argentina's political landscape fits well with the literature on weak party-system institutionalization and with the more recent discussions on the emergence of a new type of political right in Latin America. Monestier and Vommaro (2021) have pointed out the recent cases of right-wing movements that won elections without previously building a political vehicle. According to them, this new right is based on personalistic leaders embracing a reactionary cultural and political anti-elitist discourse. This new far-right comes in hand with a new wave of populism, an old theme in Latin American politics. Milei would not see himself as a populist leader. In fact, he has frequently blamed populism as one of the causes behind Argentina's stagnation and decay (YouTube, 2022). Yet, his political strategy and style as well as his discourse are typical examples of populist leadership. Populism is a disputed concept. There are disagreements among scholars about its defining elements. The fact that populism is not only an analytical category but also a term frequently used in political discourse, usually with a negative connotation, adds to the controversy. Milei's adherence to economic liberalism and fiscal orthodoxy would not be an example of populism if we use Dornbusch and Edwards' (1991) definition, which confines the term to a type of economic policy, but the economic definition of populism is problematic for a variety of reasons. For one, many populist leaders have not hesitated on certain occasions to adopt fiscal austerity policies at odds with the economic definition of populism. Despite their differences, I find it more useful to use Weyland's (2001) and Barr's (2017) conceptualizations. Weyland (2001, p. 14) defines populism as a "political strategy through which a personalistic leader seeks or exercises government power based on direct, unmediated, un-institutionalized support from large numbers of mostly unorganized followers." According to Barr (2017, p. 44), "populism is a means of building and/or maintaining political power based on the mass mobilization of supporters through the use of antiestablishment appeals and plebiscitarian linkages." Milei is clearly a highly personalistic leader with a non-mediated, plebiscitarian bond with his followers. The fact that he obtained massive support in provinces where his own candidates had had a meager performance in local races held on a different date than the August primaries and the October first round evidence the personalistic and plebiscitarian nature of his leadership. Milei's antiestablishment appeals are also evident; his definition of Argentina's partisan establishment as a "corrupt caste" is a textbook case of the kind of discourse that leftist and right-wing populist leaders have used. Putting both Peronism and Juntos por el Cambio under the same label, caste was a key element in Milei's campaign strategy, which does not differ significantly from Bolsonaro's attacks on Brazil's partisan establishment, AMLO's accusations against the corruption of the "PRIAN" (Mexico's Institutional Revolutionary Party PRI and National Action Party PAN), or Hugo Chávez's charges against the "adecopeyano" (from Venezuela's Democratic Action Adecos and Copei Copeyos) parties' patriarchy. Latin America has seen different waves of populism. During the late 1980s and 1990s, populist leaders, much to the surprise of many observers, embraced neoliberal economics. Until then, populism had been mostly associated with statism, economic nationalism, and fiscal profligacy, mainly based on the experiences of the 1930s–1950s in Argentina, Brazil, and Mexico, under Perón, Vargas, and Cárdenas, respectively. Weyland (1996) argues that populism and neoliberal economics were not at all incompatible, and in fact, had elective affinities. For different reasons, populist leaders and advocates of neoliberal reforms have targeted legislative assemblies and civil society organizations. Neoliberals see them as barriers to the swift adoption of economic reforms. The top-down unmediated nature typical of populist leaders is hardly compatible with a strong civil society. Similarly, the plebiscitarian and personalistic concept of democracy advocated by populists has usually resulted in a clash of powers with the legislative branch whenever they do not have a comfortable majority, which removes any notion of horizontal accountability. There is plenty of evidence that populism and checks and balances do not get along well. Like his peers Bolsonaro and Nayib Bukele, Milei has not refrained from levying harsh accusations against the legislative branch, although, unlike AMLO, he has so far not messed with the judiciary branch. After failing to get approval for the original version of his administration's first legislative proposal, the so-called "ley bases," in the Chamber of Deputies in February, Milei labeled the Argentine Congress a "nest of rats" (Clarín, 2024). Milei's initial policy initiatives are in line with Weyland's analysis of the elective affinities between populism and neoliberalism. Shortly after being sworn in, Milei issued a highly ambitious and comprehensive Necessity and Urgency Decree covering a wide range of policy areas and launching a far-reaching deregulation of the economy.2 Shortly after, he sent to Congress an omnibus bill requesting a broad delegation of legislative powers in the executive branch and a declaration of emergency in nine policy areas—economic, fiscal, financial, social, social security, health, defense, security, and utilities tariffs. This lengthy bill also included a list of state-owned firms to be privatized and an electoral reform that scrapped Argentina's compulsory primaries system and adopted single-member districts for Congress, among other points (Infobae, 2023). The election of a populist outsider has often been the perfect recipe for an institutional crisis, as written by Levitsky and Loxton (2013). Populists do not like checks and balances. Furthermore, they rise to office with an anti-establishment appeal, which provides them with an incentive to overhaul the existing institutions. Unlike Hugo Chávez or Rafael Correa, Milei has neither the political tools nor the strength to proceed as they did during their first term in office. Milei's party, La Libertad Avanza, holds just 10% and 15% of seats in the Senate and Chamber of Deputies, respectively. His legislative weakness raises an obvious concern about the prospects of governability for a head of state that lacks a strong legislative shield. Months before his election, I analyzed Milei's options in terms of governability (Labaqui, 2023b). Minority governments in presidential regimes can basically choose between (1) the "delegative" strategy accurately described by O'Donnell (1994), which consists of trying to exploit presidential popularity and the institutional tools available to the president to circumvent Congress; (2) coalition presidentialism, which basically consists of broadening the government's base of legislative support by incorporating other parties with congressional representation into the government, providing them positions in the executive branch (Chasquetti, 2001); and (3) crafting ad hoc majorities each time the executive leader sends a bill to Congress, an alternative that is painstaking and time and resource consuming. The Argentine Constitution endows the president with powerful tools to change the status quo, namely, necessity and urgency decrees and delegated powers. Still, both devices require some sort of congressional cooperation. Necessity and Urgency Decrees (DNUs) cannot be used for criminal, electoral, political party, and tax legislation and must be reviewed by Congress. The use of DNUs is regulated by article 99 item 3 of the Constitution and by Act 26.122. Cristina Fernández de Kirchner drafted the latter when she occupied a Senate seat and her husband was the head of state. Its provisions are heavily tilted in favor of the executive branch—the explicit rejection of both chambers of Congress is required to abrogate a DNU, which effectively means that a government controlling one chamber can block the repeal of a DNU. Milei, even with the support of the allied bloc, Propuesta Republicana (PRO), does not even reach one-third in the Senate or the Chamber of Deputies. Congress could eventually make the requirement for the legislative ratification of DNUs more stringent, for instance requiring both chambers' approval to uphold the decree and stipulating a deadline for floor discussion in each house. The delegation of legislative powers in turn requires a congressional bill. Delegated decrees are subject to a similar legislative oversight procedure. The temptation to rule by decree and circumvent a Congress might be tempting for a minority administration. Before Milei's inauguration, one prominent member of his team who would later be appointed as minister of Foreign Affairs stated publicly that if Congress did not cooperate, Milei would resort to DNUs to overcome legislative deadlock (Página 12, 2023). As analyzed above, this possibility is limited by both the Constitution and, in the case of administrations lacking at least a majority in one chamber, by the 26.122 act. Argentine presidents also have the possibility of calling for a nonbinding plebiscite. On several occasions before and after taking office, Milei suggested that he might resort to this alternative if Congress refused to pass his legislative proposals (Clarín, 2023b; El Cronista, 2023). Meanwhile, this alternative has limitations. According to Argentina's Constitution, suffrage is not compulsory for nonbinding popular consultations. The bill regulating this institutional device (25.432 act) limits the subjects that can be submitted to a referendum, specifically excluding those issues that require special legislative majorities (such as constitutional reform) and proposals that must be sent to specific chambers of Congress (such as the change in Argentina's revenue-sharing regime between the federal government and the provinces). From a more practical standpoint, recent evidence from Ecuador under Guillermo Lasso or Chile during the Boric administration shows that plebiscites can be a double-edged sword, especially in the case of heads of state that lack a majority in Congress. Milei's initial attempt to obtain a broad delegation of powers from Congress failed in February, when the Chamber of Deputies rejected certain items from the omnibus bill sent in December, leading the government to withdraw the entire bill. A much shorter and less ambitious version of the omnibus bill was resubmitted in April, considerably watered down during the legislative treatment in both the Chamber of Deputies and the Senate. At the time of writing this article, Congress had passed this far less ambitious version of the so-called "ley bases." The bill's approval evidenced a more pragmatic approach from the Milei administration and a quick lesson about how minority administrations interact with Congress to get their policy proposals approved (Alles, 2024). The painstaking and resource-consuming discussion of the ley bases and the fiscal package submitted by the government in April 2024 underscores the advantages of coalition presidentialism over a delegative strategy—which according to O'Donnell (1994) typically results in the head of state moving from omnipotence to impotence once the honeymoon with public opinion comes to an end, making the presidents highly vulnerable to swings in society's mood—and the crafting of ad hoc legislative majorities. It is yet to be seen whether Milei will take stock of the recent experience and try to craft a more stable base of legislative support or wait for the October 2025 mid-term elections where half of the Chamber of Deputies and one-third of the Senate seats will be renewed and his share of legislative seats may increase. While the first alternative seems more advantageous, Milei looks more inclined to follow the second path outlined above, which fits better with his political communication strategy of attacking the "caste." This second alternative is not risk-free; as mentioned before, Milei has the support of fewer than one-third of the seats in both chambers of Congress, which means that if opposition parties join forces, they could override a presidential veto, abrogate DNUs or delegated decrees, or in the worst-case scenario, initiate an impeachment procedure, an unlikely scenario at this moment. The first semester of the Milei administration poses questions about governability, the sustainability of the administration's economic policy, and social tolerance to adjustment. Furthermore, Milei's leadership strategy, his political discourse and ideology, and his allegiance with far-right politicians from other countries put in the spotlight the discussion about whether Argentina's democracy is at risk. One of the most salient paradoxes of this first semester lies in the fact that despite the economic hardship resulting from the administration's initial economic measures to curb Argentina's longstanding macroeconomic imbalances, Milei retains a significant level of popular support. Social tolerance to economic adjustment has been higher than ex ante expectations. The acceleration in inflation resulting from the initial 50% currency devaluation and the adjustment in regulated prices deepened the decline in real wages that preceded the Milei administration (La Nación, 2024). Inflation has slowed since the 25.5% peak in December 2023, reaching in May a 4.2% monthly rate, the lowest monthly print since January 2022. This slowdown in price increases has come hand in hand with an acute recession. According to the International Monetary Fund (IMF), gross domestic product (GDP) is expected to decline by 3.5% in 2024 (Buenos Aires Times, 2024). There are no official poverty indicators, but according to the Universidad Di Tella's Poverty Nowcast, the population living below the poverty line had increased from 45.2% in December 2023 to 48.7% in April–May 2024 (Universidad Di Tella, 2024). Yet, despite the current economic hardship, Milei's approval ratings are still high, taking into stock the economic situation. Figure 1 based on the government confidence index released monthly by Di Tella University (2024) shows that at the moment of writing this article, confidence in the government remained close to 50%. The discredit of the political establishment, particularly of Peronism, and positive expectations about the economy seem to lie behind the higher-than-expected tolerance of economic hardship. Milei's political communication strategy, which since day one stressed that harsh economic measures would be necessary to avoid a further worsening of the economic situation, has probably contributed to the greater than anticipated social patience. Despite the administration's internal disputes and frequent episodes of bureaucratic mismanagement, governability has been less of an issue than what may have been anticipated in December 2023. At the time of writing, Milei achieved his first victory in the legislative arena, with the Senate's approval of the resubmitted version of the omnibus bill and the fiscal package. Governability and the prospects of social unrest stood as key challenges for Milei. Even if these 6 months were free of episodes of social conflict—labor unions have already staged two general strikes against the government's policy while grassroots social movements have held several demonstrations against the Milei administration—these episodes have been staged by organizations tied to Peronism and have not included Milei's constituency.3 As for governability, despite his legislative weakness, Milei benefitted from two legacies of Massa's tenure in the Ministry of Economy. The scrapping of the income tax promoted by Massa and approved by Congress in September 2023 resulted in a loss of revenues for provincial administrations, some of which have a critical dependence on "co-participación," Argentina's federal revenue sharing regime. At the same time, Congress' failure to pass the 2024 Budget Act before the November runoff endowed Milei with another powerful bargaining chip vis-à-vis provincial administration. In the absence of a budget act, the federal government can manage expenditures with a greater discretion. One of the administration's first decisions was to freeze nonautomatic transfers to provincial governments (Ámbito Financiero, 2024).4 To a certain extent, the financial choking of provincial administrations has partially offset Milei's weak legislative standing, giving him leverage to negotiate with governors. It is too early to assess whether Milei will succeed in stabilizing the economy and restoring economic growth. Financial markets and the IMF have welcomed Milei's economic policy, particularly his stress on curbing Argentina's fiscal deficit. Still, the IMF has repeatedly stressed the need to protect vulnerable populations and to enhance the social and political consensus behind the administration's economic policy (Clarín, 2024; FMI, 2024). Certain lessons from the stabilization and structural reform plans of the 1980s and 1990s should not be overlooked. In general, Milei's political approach evokes the stylized facts described by O'Donnell (1994)—a popular head of state and a group of technocrats, insulated from societal pressures, administer the bitter pill of adjustment. O'Donnell expected this approach to fail because of poor policy design that ultimately led the head of state from omnipotence to impotence when his approval ratings declined. Second, evidence from the 1980s and 1990s provides some insightful lessons, (1) incoming administrations are more inclined to tackle macroeconomic imbalances and launch stabilization plans; (2) outsiders have incentives to engage in fiscal adjustment and state downsizing as they deprive their political rivals of economic resources (Geddes, 1996); and (3) a highly committed group of state technocrats with sound credentials is necessary but not sufficient for the success of stabilization and reform initiatives. The literature on economic reforms points out having legislative majorities as part of the requirements for success (Torre, 1998). A final point lies in the prospects for Argentina's democracy. Milei's victory logically raised a concern on this matter. As discussed above, populism has often been the bridge between a weakened democracy and the emergence of competitive authoritarianism (Levitsky & Loxton, 2013). Milei's leadership style and ideas are certainly not encouraging. His adherence to liberalism is limited to the realm of economics. Before and after becoming Argentina's president, Milei has shown little tolerance of criticism and has referred to opposition leaders and journalists in harsh terms. Ideological polarization and radicalization are not encouraging features. Still, there are certain elements that provide a safety net for Argentina's democracy. Unlike other Latin American countries were the armed forces have either become a key arbiter in political crises or have amassed significant political power, the Argentine military is a weak political actor, one with little interest in getting involved in political affairs. Second, Milei does not control the judiciary branch and certainly not the Supreme Court of Justice, which is the ultimate arbiter when it comes to the constitutional validity of government actions. Finally, from a legislative standpoint, hegemonic or potentially dominant heads of state rather than weak presidents have typically been a major threat to democracy in Latin America (Pérez Liñan, 2018). In the near term, governability rather than democracy is much more likely to be at stake in Argentina, but the picture is certainly not a rosy one. Milei's arrival to power is the consequence of severe crises in Argentina's party system, which has certainly become less institutionalized. The election of a populist leader is hardly a solution for party-system weakness. In this vein, Milei's election was certainly an earthquake to Argentine political elites who are still in a state of shock. If Milei succeeds in solving Argentina's longstanding economic problems, a deep reconfiguration of the party system should take place. Meanwhile, his failure would not restore the old system and could in fact worsen Argentina's crisis of representation, further deteriorating democratic quality. Ignacio Labaqui is a professor of Latin American Politics and International Relations Theory in the Department of Political Science and International Relations at the Universidad Católica Argentina. He also teaches Regional Comparative Governance in the master's in international studies at the Universidad del CEMA.