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Center for International Private Enterprise

ECONOMICREFORM Feature Service® August 31, 2011

The 2011 Elections: Promoting Policy Debate in Argentina Fernando Straface Executive Director, Center for the Implementation of Public Policies Promoting Equity and Growth (CIPPEC)

Article at a glance • Political discussions in Argentina have traditionally focused on candidates’ personal attributes rather than on key policy issues. • CIPPEC has been working to engage presidential candidates, key political actors, private sector, civil society organizations, and journalists in substantive policy debate ahead of the October 2011 elections. • CIPPEC is using its 15 Memos to the President on issues ranging from social policy to good governance to spur discussion and build conditions for the first-ever presidential debate in Argentina.

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Agenda for the President 2011-2015 On August 14, 2011 Argentina held primaries for its upcoming legislative and presidential elections scheduled to take place on October 23, with a potential presidential run-off election on November 20, if needed. This busy electoral year presents a unique opportunity to push for issuebased debate among candidates on key policy challenges facing the country. The Argentine political system certainly involves plenty of discussions; however, they are not usually about public policy issues. Instead, political discussions are often centered around the personal attributes of candidates, their pasts, and the potential intentions behind what they are saying. Candidates also make general statements about universally accepted goals, such as “improve education” or “promote development,” without clearly stating what exactly they refer to or how they intend to implement their plans. That is why this year – the presidential election year in which politics gain the most visibility and intensity – the Center for the Implementation of Public Policies Promoting Equity and Growth (CIPPEC), in partnership with the Center for International Private Enterprise (CIPE), is encouraging significant changes in the nature of political debates in Argentina. “Agenda for the President” is a project that promotes rigorous debate about realistic policy options for the next government in Argentina. CIPPEC focused on supplying ideas for substantive discussion in order to encourage presidential candidates to make in-depth public policy debate the most relevant aspect of their political campaigns. The ultimate goal is to encourage debate that conveys the policy roadmap for the next government and improves the quality of information citizens receive in order to decide who will govern after the election.

The 2011 Elections: Promoting Policy Debate in Argentina

In preparation, CIPPEC collected best practices from other countries that have succeeded in establishing a culture of public policy debate during elections. For instance, many think tanks in the United States, Colombia, Perú and Chile develop policy memos each time there is a presidential election. CIPPEC has developed 15 Memos to the President to have a similar structure and intend that these documents will serve the same role that policy memos have in other countries: very clearly stating the president’s policy options in each of the key areas strategically chosen by CIPPEC. Each memo presents six to eight concrete proposals for public policies that are fiscally and politically feasible in the medium term. The memos also have a section that highlights the previous government’s achievements to promote a culture of recognition and sustainability of good public policies in the country. All memos are available on the Agenda for the President website, Substantive conversations on the contents of each memo have already commenced among Argentine political parties, government representatives, experts, universities, civil society organizations, and the private sector. The main goal of this dialogue is to explore each candidate’s platform and proposals, increase their visibility, and create incentives for key social and political actors to debate policy options during the campaign. With its own proposals, CIPPEC seeks to foster a deeper debate on what the next government’s priorities should be, not to disseminate a unique agenda of public policy priorities. CIPPEC does not intend for the people involved in this dialogue to think alike. On the contrary, it is important that they think differently and support their ideas and policy proposals with evidence. At the end of this process, CIPPEC hopes to have created the conditions necessary to hold the first-ever presidential debate in Argentina.


The 2011 Elections: Promoting Policy Debate in Argentina

Promoting Issue-Driven Debate to Foster the First Argentine Presidential Debate

Center for International Private Enterprise

When it comes to good governance, a key challenge is to reduce the tendency toward

It may be hard to believe, but there has never been a presidential debate in Argentina. In this context, Agenda for the President seeks to promote issue-based debate on specific challenges captured in CIPPEC’s memos. After creating the political conditions for dialogue over policy priorities, CIPPEC will encourage the candidates to participate in Argentina’s first presidential debate.

hyper-presidentialism, a constant throughout Argentine history. Social security is another comprehensive policy that has expanded under the current government. While social security has undeniable social benefits, its sustainability in the future is compromised as the worker-to-retiree ratio decreases. How the next government handles social security’s sustainability will affect the possibility of maintaining benefit payments in years to come. This issue is also crucial for maintaining fiscal sustainability of the country as a whole because social security funds are a large part of the macroeconomic equation in Argentina.

Though it is difficult to summarize CIPPEC’s 15 Memos to the President given the breadth and complexity of information they contain, it is possible to identify several policy challenges in key areas that the next government will face. Social policy In the social sector, the question is how to improve the returns on major investments achieved between 2003 and 2011. Investment in education, science and technology is currently the highest in Argentina’s history, having reached 6.4 percent of Gross Domestic Product (GDP) in 2009. However, the impact in the quality of public education is still low compared to the level of investment.

Economic policy, integration and competitiveness In the Argentine economy, the greatest policy challenge is to manage the balance between inflation, fiscal sustainability and economic growth. Inflation in particular is a pressing problem. In fact, there are two inflations: the official one, which for 2010 equaled 10.9 percent, and inflation that independent sources estimate, which suggest that the real rate stands at around 25 percent.

The Universal Child Allowance, sanctioned by a presidential decree in 2009, is another strategic policy that all actors in the political system support. This program provides cash transfers to unemployed or informally employed parents of children under 18. It is probably the most comprehensive social protection policy of the last few decades and it has proven to have a definite impact on reducing poverty levels. The challenge is to maintain the Universal Child Allowance, support families in poverty, and simultaneously build the conditions for these beneficiaries to eventually enter the formal labor market and live without this publicly funded income.

In trade integration and competitiveness policy, the challenge for the next government is how to improve trade performance and solve microeconomic distortions without hurting the domestic market. The idea that in order to have good performance in the domestic market a country needs to isolate itself from world trade is a false dilemma. Subsidies will be another challenge for the next government when it comes to improving Argentina’s competitiveness. They amount to almost 3 percent


The 2011 Elections: Promoting Policy Debate in Argentina

Center for International Private Enterprise

of gross domestic product and they are expected to continue growing. Subsidies are especially prevalent in the energy sector, though they are not evenly distributed across households, which generates overspending. The government needs to face this problem, especially if it wants to fight inflation. However, reducing subsidies is always politically difficult because it directly affects people’s day-today livelihood and may trigger discontent among the middle class. Good governance When it comes to good governance, a key challenge is to reduce the tendency toward hyperpresidentialism, a constant throughout Argentine history. Power is heavily concentrated in the hands of the president who is the head of the executive branch. That has serious governance and fiscal implications. For example, the country is still working under the 2010 budget because Congress and the executive branch were not able to agree on a new one, giving the president a lot of flexibility to decide on budgetary matters. The case of weakening autonomy of the National Institute of Statistics and Censuses – the institution in charge of tracking the inflation rate – also shows the lack of independence of professional institutions at the federal government. Flaws in Argentina’s system of fiscal federalism compound the issues created by the overly dominant executive branch. As it stands, political pressures and non-transparent discretionary spending taint the system of intergovernmental transfers from the federal government to regional governments. The next government will also have to advance the agenda on greater independence and effectiveness of the justice system, especially with the Magistrates’ Council reform. The Council, which is in charge of appointing judges, was changed in 2006 in a way that makes it more vulnerable to the will of the majorities in the ruling party. In addition, the presidency of Cristina Fernández de Kirchner showed an unjustified delay in delivering judicial candidates to the Senate after receiving the shortlist selected by the Magistrate’s Council. This

has resulted in the existence of surrogate judges, which the Supreme Court of Justices recently questioned.

The Way Ahead Regardless of October’s election results, the winners will face a number of structural challenges. CIPPEC’s Agenda for the President addresses those issues and spurs meaningful policy debate, not only to revitalize Argentina’s electoral campaign but also to contribute to developing much-needed policies that will address the country’s challenges. As one of the most influential think tanks in Argentina, CIPPEC’s goal is to help improve the quality of public debate, produce a policy roadmap and options for the next government, and provide strategic information for citizens to help them decide their vote. Through the Agenda for the President initiative, CIPPEC will continue to bridge the gap between research and public policy and bring deeper understanding of technical issues involved in policymaking to current and future decision-makers and the broader public. _____________________________________________________________________________

This article is based on a presentation by Fernando Straface delivered at CIPE on July 12, 2011. _____________________________________________________________________________

Fernando Straface is the executive director of CIPPEC. He received his Master’s degree in Public Policy from Harvard University and his B.A. in Political Science from the University of Salvador. He has dedicated more than 12 years to the implementation of projects geared towards improving the public sector in Latin America. He previously worked as a consultant on governance for the Inter-American Development Bank and also served as the Executive Director for the National Institute of Public Administration (INAP). The Center for the Implementation of Public Policies Promoting Equity and Growth (CIPPEC) is an independent, non-partisan, and non-profit organization that strives to create a more just, democratic, and efficient state in Argentina to improve the quality of life for all Argentine citizens. CIPPEC was formed in September 2000 when 11 young professionals, from various fields –4–

The 2011 Elections: Promoting Policy Debate in Argentina

Center for International Private Enterprise

and with differing political points of view, decided to come together to create a non-profit organization dedicated to improving the quality of public policies in Argentina and Latin America. Specifically, they envisioned that CIPPEC would help turn sound ideas into concrete policies in the areas of education, public health, justice, transparency, and public spending, thereby setting itself apart from other non-governmental organizations. Today CIPPEC has a staff of 90 and is one of the most respected think tanks in Argentina.

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The 2011 Elections: Promoting Policy Debate in Argentina  
The 2011 Elections: Promoting Policy Debate in Argentina