The International Monetary Fund and Latin America: The Argentine Puzzle in Context by Claudia Kedar (review)

The International Monetary Fund (IMF) has played a controversial role in the modern history of Argentina, even before Argentina joined the Fund in 1956. Always at issue stood the question of whether Argentina ought to enter into a relationship that many critics considered a Faustian bargain: Funding by the IMF required orthodox liberal policies leading to radical and disruptive change. The IMF preconditions for loans typically required measures aimed at producing price stabilization and promoting private ownership to replace public ownership. The main objection to such measures concerned their negative impact on the level of employment. IMF prescriptions required steep reductions of government spending and the privatization of public companies. Critics questioned the value of stemming inflation, for example, when it provoked high levels of unemployment, severe social dislocation and downward mobility, and the expansion of marginal, excluded sectors of the population. They charged that the IMF promoted the loss of national control over the economy, as foreigners seized key sectors and imposed high levels of foreign indebtedness.

The most interesting part of the book links the role of the IMF to the issue of external control over Argentina by the United States. In defining this asymmetrical relationship, Kedar advances the notions of “the routine of dependency” and “the epistemic community.” She means the institutionalized physical presence of the IMF in Argentina leading to the formation of an inbred interactive community of technocrats, some of them entrenched in the government, sharing the IMF’s outlook and purveying its prescriptions. Its development enabled the IMF to create forms of permanent surveillance and structures of invisible indoctrination facilitating the assimilation of its values. Described in such terms, Kedar’s analytical concepts might appear to invoke a form of conspiracy theory, although she emphasizes many situations in which Argentine governments rejected or ignored the IMF’s policy preferences. The IMF therefore sought to establish an ideological straitjacket through the so-called routine of dependency but never fully succeeded. The strength of Kedar’s book derives from her success in clarifying the objectives of the imf, while describing the conditions under which they were adopted or rejected.

The bulk of this book narrates the modern economic history of Argentina from the perspective of the fluctuating influence of the IMF. Periods of strong IMF influence included the late 1950s, the late 1960s, the late 1970s, and the entire period from the early 1990s until 2001, the neo-liberal era. In other periods, such the mid-1960s and the early 1970s, for example, the IMF remained in the background. The narrative description covering an array of administrations and short-term policies is based substantially on primary sources. It is well written, exhaustive, and contains many sound judgments. Kedar has interdisciplinary abilities as a historian and an economist, although certain periods, like the presidencies of Carlos Menem in the 1990s, have already been widely covered, making it difficult to offer anything new. The most novel parts of the book concern the late 1950s, mostly during the presidency of Arturo Frondizi, and the creation of the “routine of dependency.”