Greetings, as usual, from the four corners of our spherical planet! Let’s go to the land of fire, or the end of the world, and see what is happening there.

Argentina faces another turning point. After decades of crises and political whiplash, President Javier Milei vows to break the cycle and bring lasting stability. But can his shock-therapy reforms and electoral changes deliver? With foreign influence growing and old fears resurfacing, we examine whether Milei can truly transform Argentina — or simply replay its history in a new key.

Via Shutterstock

There’s an old joke in economics: there are four kinds of countries in the world: developed countries, undeveloped countries, Japan and Argentina. The line captures Argentina’s peculiar, unique trajectory. It was once one of the richest nations, but it has since endured many cycles of growth and collapse. Since the early 20th century, each boom has been followed by debt-fuelled expansion, default and inflation. This created a pattern of instability that no leader could break out of. 

Successive governments have alternated between nationalist protectionism and neoliberal reform, each claiming to restore prosperity but relying on short-term borrowing and populist spending. These swings eroded public trust and left Argentina trapped between optimism and crisis.

Milei’s rise fits this historical rhythm. When he was elected in 2023, the economy was reeling from record inflation and depleted reserves. His promise to dismantle the old order and impose fiscal discipline resonated with voters weary of the endless boom-and-bust cycle — but it also revived fears of another round of austerity and foreign dependency.

Sources:

2023 Argentine general election | Wikipedia

History of Argentina | Facts, Summary, & Inflation | Britannica

Argentina’s Struggle for Stability | Council on Foreign Relations

Economy of Argentina | Wikipedia

We’ve now had two years to realize that Milei isn’t a team player, he let down his allies and he barely avoided default thanks to US President Donald Trump &Co bailing him out. When a state doesn’t use the money it receives to stabilize reserves but to stabilize internal markets, there’s a problem. 

Milei, the chainsaw guy, was losing until… 

Many Argentinians voted for Milei in the midterms partly as a reaction to fears raised by the Peronist resurgence in provincial elections, especially after the Peronists won Buenos Aires Province just weeks prior to the national vote. Anxiety over a potential return to Peronist policies — associated with past defaults and economic mismanagement — drove hesitant voters toward Milei as a perceived safeguard against another financial crisis. This dynamic is borne out in surveys and turnout patterns; the opposition’s victory at the provincial level acted as a potent reminder of “what could go wrong,” motivating voters to seek continuity and foreign-supported stability over perceived risk.

The Political Economy of “Make Argentina Default Again” The Jacobin

Two weeks ago, Milei was losing and heading into a financial default. International financial aid played a decisive role in Milei’s midterm triumph, but it came with strings attached. The $20 billion bailout from the Trump administration — on top of earlier International Monetary Fund (IMF) support — was contingent upon Milei’s government committing to stringent fiscal discipline and structural reforms. Trump’s team insisted on stabilization targets for inflation, state spending and currency reserves, effectively shaping Argentina’s domestic policies from abroad. This external pressure complicated Milei’s ability to maneuver politically, forcing prioritization of international creditor demands over local coalition-building.​

Milei’s Win in Argentina Signals Rebuke of the Past and Trump’s Impact – The New York Times

Boleta única: electoral system reform

A notable shift occurred with the introduction of the “boleta única” (single ballot) voting system in Argentina’s national midterms. The reform was aimed at reducing electoral fraud and limiting informal manipulations that were common in previous elections. The new system diminished longstanding local arrangements — sometimes referred to as “Argentinian arrangements” —  which made it harder for political machines, especially Peronist networks in strongholds like Buenos Aires Province, to exert undue influence. This increased transparency and leveled the playing field, amplifying Milei’s appeal to skeptical middle-class voters who favored clean elections.

Argentina Embraces Electoral Reform with Single Ballot Law – The Rio Times

Socioeconomic shift: middle-class support

Milei’s voter base also underwent a significant transformation in the midterms. Disappointed by austerity policies and failed legislative promises, most poor voters shifted away, leaving the middle class as Milei’s core constituency. Middle-class Argentinians, who are especially vulnerable to currency shocks and inflation, turned to Milei primarily for his anti-Peronist credentials and promises of financial stability — even if his policies resulted in rising unemployment or cuts to welfare. Electoral maps and demographic studies showed declining support for Milei in poorer districts and a growing concentration in urban, professional and business sectors.

Argentina: Congressional elections in Argentina – Friedrich Naumann Foundation 

Javier Milei’s midterm victory in Argentina illustrates a complex confluence of forces: global financial intervention, institutional change and deep-seated societal fears. On the economic front, Milei’s continuation in office hinged on urgent foreign backing — especially the politically charged bailout from President Trump — paired with tight austerity and visible inflation relief. Simultaneously, the introduction of the boleta única system curbed electoral manipulation, boosting public faith in the fairness of voting and tilting the momentum toward Milei’s camp.

Yet, beneath these structural shifts lay the decisive driver: trauma from repeated national crises, volatile currency and the specter of Peronist dominance. Many Argentinians, especially in the middle class, chose Milei less out of ideological fervor than from a desire to avoid the failures of the past. In short, Milei’s win cannot be traced to any single factor — it was the result of external financial rescue, institutional reform and powerful collective memories of economic instability converging at a critical electoral moment.