Federico Sturzenegger on Chainsaw and Deregulation: the First Year of Javier Milei’s Presidency

On Thursday, January 23, Federico Sturzenegger joined Markus’ Academy. He is the Minister of Deregulation and State Transformation of the Argentine Republic, he teaches at the University of San Andrés in Buenos Aires (UdeSA) and at the Kennedy School of Government at Harvard University, USA. He is also Professor Honoris Causa at HEC Paris.

Watch the full presentation below. You can watch all Markus’ Academy webinars on the Princeton BCF YouTube channel.

Timestamps:

[00:00] Markus’ introduction

[08:16] Argentina in 2024

[27:03] Two key deregulatory reforms

[42:32] Regulation resistance and dynamics

[58:05] Conclusion and Q&A

Executive Summary

A few highlights from the discussion.

• A summary in four bullets

• • Over the first year of Milei’s presidency the country achieved its first fiscal surplus in years. A 30% cut in government spending was largely driven by cuts to public investments, transfers to provinces, and public sector employment
  • With the Argentinian economy set to grow 2-3% of GDP this year, the transformation showed that government spending cuts can be expansionary
  • Beyond the budgetary chainsaw the government has deregulated large parts of the economy. A rule of thumb: wherever you deregulate prices fall by 30% 
  • The lesson for other countries is that we should revisit the limits of what can be done. Make an effort to ask yourself the deeper question of whether a certain government activity should be there or not
• Click here for the full summary