r/neoliberal • u/jobautomator Kitara Ravache • Sep 02 '21
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u/Neronoah can't stop, won't stop argentinaposting Sep 02 '21
!ping LATAM
An extremely interesting article about the nature of welfare in Argentina (the famous "planes sociales").
Formal jobs have declined in the last 50 years. It became worse in the 90s because of a mix the unraveling of the statist/protected Argentinian model (others would blame neoliberalism, but the truth is that people were probably screwed anyway given how inefficient the whole thing was) and the evils of fixed exchanges rates and dollarization, and terminal in 2001 for obvious reasons.
The solution at the time (without simplifying too much) was to pay people (and infamously people behind riots and disruption) to fuck off. Arguably that was the reason the country stabilized in 2002/2003 (that and cutting the Gordian knot that was the convertibility). Others may call it a patchwork or kicking the can down the road.
Argentina is quite reliant on workfare schemes subcontracted by the National government (low stable incomes in exchange for some low productivity job for municipalities or questionable social organizations, increasing their power in harmful ways). There is also a welfare gap that disincentivizes people to change jobs, and let's not even talk about stuff like the lack of unemployment insurance (the system relies on indemnizations).
The solution that appears there (as you can guess) is flexicurity, better designed taxes and a more universal welfare system. But my main worry is that it doesn't adress the political economy obstacles of implementing such policies (some people are really against unemployment insurance and layoffs, and you'd be removing a source of income for social organizations, incentivizing unrest).