Populism in Argentina: The Kirchners
This is the second post in our series of case studies on the five iconic cases of populism in 21st-century Latin America.
The Context
Néstor Kirchner (NK) assumed the presidency in May 2003, less than two years after Argentina experienced the most severe economic crisis in its modern history: the 2001 Argentine Great Depression. Both Néstor and his wife, Cristina Fernández de Kirchner (CFK), rose to power through the Partido Justicialista (PJ)—the political movement founded in 1947 by Juan Domingo Perón, one of the central figures of Latin America’s so-called “golden age” of populism (De la Torre, 2017; Gambini, 1999; see also Ocampo, 2015).
Since its founding, the Peronist Party has played a dominant role in Argentina’s political landscape. It has held the presidency for 37 of the past 75 years, secured between 30% and over 60% of the vote in both presidential and legislative elections, and maintained uninterrupted control over several key provinces and municipalities.
Given this enduring influence, it is no exaggeration to describe Argentina as a Peronist country.
The 2001 crisis not only collapsed Argentina’s economy but also brought down the presidency of Fernando de la Rúa (UCR – Unión Cívica Radical). The crisis triggered a profound political breakdown, with the country cycling through five presidents between December 20, 2001, and NK’s inauguration in May 2003.
When NK took office, he inherited ideal conditions for the first stage of macroeconomic populism—a phase characterized by expansionary policies made possible by underutilized resources and low inflationary pressures. The crisis had left behind three key features:
Large output gaps,
High poverty levels, and
Widespread public pressure for decisive political action.
Remarkably, NK also began his presidency with a budget surplus (extremely rare in Argentina), the result of emergency tax increases and the 2001 sovereign default. This fiscal cushion gave his administration room to maneuver.
The Kirchnerista Policies
The Kirchners capitalized on the institutional vacuum left by the crisis to consolidate political power. In turn, they responded to public demand to do “something” with a strong policy agenda.1 The existing output gap facilitated a swift economic rebound, further bolstered by a global commodity boom, which fueled growth and reinforced their populist project.
The Kirchner administration maintained and deepened two key policy measures introduced in the immediate aftermath of the 2001 crisis.
First, it upheld a new social assistance program aimed at supporting low-income households and the unemployed—an effort to address the sharp rise in poverty and social dislocation following the crisis.
Second, it continued the freeze on utility tariffs, keeping prices for gas, electricity, and public transportation at pre-crisis levels. While utility providers were required to charge in pesos at these frozen rates, they still faced input costs denominated in U.S. dollars, now subject to a heavily depreciated exchange rate.
Both policies, initially framed as temporary crisis responses, remained in place for at least two decades, entrenching themselves in Argentina’s economic structure. The long-term fiscal and economic distortions they introduced—particularly in the energy sector—continue to weigh heavily on the country’s economy today.
Over time, these social programs and subsidies became a structural burden on the public treasury. By 2007, Argentina’s fiscal accounts slipped into deficit, a position from which they would not recover until 2024, during Javier Milei’s first year in office. Between 2003 and 2015, these two spending categories alone accounted for approximately 65% of total government expenditure.
With limited access to international financial markets, the Kirchners turned to alternative funding sources, including asset confiscations and deficit monetization. The latter fueled a new cycle of high inflation. Inflation, which stood at 9% in 2007, climbed steadily, reaching 94.8% by 2022. On average, inflation during NK’s presidency was 15%, while under CFK’s two terms, it averaged 25.6%.
Starting in 2007, under CFK’s leadership, official inflation statistics were manipulated, leading to widespread mistrust of government data. In response, Congress began publishing a composite index based on private-sector estimates, informally known as Inflación Congreso.
Throughout this period, the Kirchners employed left-populist rhetoric to build a loyal political base—one that was receptive to policies such as the expropriation of major corporations and narratives that blamed inflation on corporate greed or foreign interference rather than on domestic fiscal and monetary mismanagement.2
The freezing of utility prices led to a predictable yet damaging outcome: an energy shortage. The resulting energy shortages were met through costly imports and, at times, unplanned rationing (power outages). These growing import needs, particularly in the energy sector, became a significant drain on central bank reserves.
Central bank reserves came under mounting pressure throughout the Kirchner era. During the 2001 crisis, the Argentine Central Bank lost approximately $3.68 billion in international reserves. Yet this was modest compared to the losses sustained during the capital control period (2011–2015), when the central bank saw a staggering $23 billion drain—six times the amount lost during the earlier crisis.
Even the windfall from booming commodity exports, which brought in record revenues amid historically high international prices, proved insufficient to sustain the fiscal demands of the Kirchners’ populist economic agenda. The persistent erosion of reserves reflects the underlying fragility of a model dependent on expansive public spending, rigid price controls, and chronic external imbalances.
The Fall, Return, and Fall of the Kirchnerismo
The third Kirchner administration came to an end in 2015 with the election of Mauricio Macri, leader of the Cambiemos coalition. Macri inherited an economy plagued by deep structural imbalances. Inflation was running at 27.8%, the exchange rate was significantly overvalued, and the real economy had remained stagnant since 2011.
The fiscal situation was worrying: the central government deficit had reached 6.9% of GDP, more than double the level recorded during the 2001 crisis. At the same time, household poverty—according to estimates by the Pontificia Universidad Católica Argentina—stood at approximately 30%, underscoring the socioeconomic toll of a decade of populist policies.3
During Mauricio Macri’s presidency, the government implemented a gradualist approach to fiscal adjustment. While public spending increased during his first year, it ultimately declined by 20% over the course of his term. However, this fiscal contraction did not translate into economic recovery. The economy remained stagnant, and inflation continued its upward trajectory, averaging 41% annually throughout Macri’s presidency.4
In the face of mounting external pressures, the administration was forced to seek support from the International Monetary Fund (IMF) during the 2018 currency crisis. The resulting agreement became one of the largest in IMF history and reflected the fragility of Argentina’s macroeconomic position, which remained vulnerable despite efforts to reverse the legacy of populist economic policies.
The end of Macri’s presidency marked the renewed onset of macroeconomic populism in Argentina. Running for a second term, Macri was defeated in the 2019 presidential election by Alberto Fernández (AF), who had previously served as Chief of Cabinet under NK and CFK from May 2003 to August 2008. In a strategic political move, CFK joined the ticket as Vice President, signaling a return to the core leadership of the earlier Kirchnerist era.
As with previous episodes in Argentina’s recent history, the return to populism was preceded by an economic crisis—in this case, the 2018 currency crisis, which eroded confidence in Macri’s gradualist economic reforms. The electoral outcome once again underscored a recurring pattern in Argentine politics: macroeconomic instability paving the way for populist leadership promising state-led solutions and immediate relief, often at the expense of long-term fiscal sustainability.
By the end of AF’s presidency, inflation had skyrocketed to 211.2%, accompanied by a 4.8% fiscal deficit. Despite efforts to stabilize the economy, strict capital controls—which had been reintroduced during Macri’s presidency—remained in place. The country also faced a severe depletion of central bank reserves, which were at their lowest levels since 2006.
In the 2023 presidential elections, Sergio Massa, the Kirchnerista candidate, was defeated by Javier Milei, a newcomer to Argentina’s political scene. While Milei’s ideology cannot be classified as left-leaning, his populist rhetorical strategy has drawn attention and been labeled as a Latin American example of right-wing populism (Pereira, 2023), adopting a rhetoric that resonates with many of the themes associated with populist movements across the region.
The Four Stages of Argentine Populism
Dornbusch and Edwards (1990) conceptualize Latin American macroeconomic populism as unfolding in four distinct stages, each marked by a progressive deterioration of economic fundamentals and mounting policy distortions. These stages can be summarized as follows:
Stage 1: Populist policies initially yield what looks like positive macroeconomic outcomes, including rising output, employment, and real wages. Abundant inventories, underutilized capacity, and sufficient central bank reserves delay inflationary pressures and mask supply-side vulnerabilities.
Stage 2: Sooner or later, foreign reserves become critically low, constraining imports and severely affecting industries reliant on capital and durable goods. This leads to input shortages, declining production, and the emergence of inflationary bottlenecks. Governments increasingly rely on price controls, subsidies, and exchange rate interventions to contain the economic fallout.
Stage 3: As nominal wages adjust upward to match inflation, subsidies must be expanded to maintain production, further widening fiscal deficits. Capital flight accelerates, tax revenues erode, and severe shortages paralyze key sectors. The economy enters a phase of disarray, with collapsing real wages and an abrupt withdrawal of subsidies. Growth stalls.
Stage 4: A new administration typically adopts orthodox stabilization measures, often in coordination with the IMF. The adjustment phase entails continued contractions in real wages and a fall in national income below pre-populist levels. Sustainable recovery depends on whether the political context supports necessary reforms and can attract foreign investment through credible macroeconomic management.
While these stages offer a useful analytical framework, transitions between them are not rigidly defined and often require interpretive judgment based on the specific economic and social dynamics at play in each case. With that caveat in mind, the Kirchnerist experience in Argentina can be mapped onto this four-stage model, as shown in the table below.
In 2008, CFK nationalized the private retirement and pension funds, and in 2012, she nationalized the Spanish participation in the oil company Repsol-YPF.
Because the Kirchners tampered with official statistics, there are no reliable official poverty rate estimations for this period.