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Kirchners swap keys to Argentina’s executive suite

rgentina ’s former sittin g president,
Nestor Kirchner, helped
his wife Cristina take the presidency
of Argentina on the
first round of presidential elections last
October, winning 45 per cent of the vote.
For anyone unfamiliar with Argentine
politics, this might seem surprising.
However, Cristina Kirchner didn’t
arrive on the coattails of her husband –
she was a senator and before that a
deputy in the national legislature and in
the provincial legislature of Santa Cruz.
Since taking power she has appointed
Martin Lousteau, the president of Banco
de la Provincia de Buenos Aires, as economy
minister in a bid to show her
readiness for any downturn in the economy.
Nerves remain frayed from
Argentina’s recent extended economic
crisis of the early 2000’s.
In November, her defence minister,
Nilda Garre, fired the chief of Argentine
military intelligence after hearing a tape
of a phone call from the chief saying that
the minister had to go. The new president
has also weathered an election campaign
scandal around allegations that money
from Venezuela helped put her in office.
This succession to power by the wife
of the former president can be explained
in part, at least, in light of Argentina’s
political economy. Understanding the
interaction between economic shocks
and political institutions helps in grasping
key aspects of the outcome of the
2007 national elections.
Kirchners swap keys to Argentina’s
executive suite
Husband-wife rotation could see Mr. Kirchner return to power in four years
By Mig uel Braun an d Martin Ardana z
Miguel Braun is Policy Director of the Centre for the Implementation of Public Policy for Equity
and Growth ( Centro de Implementacíon de Políticas Públicas para la Equidad y el Crecimiento
or CIPPEC ) in Buenos Aires, Argentina and Martin Ardanaz is a researcher in the Economic
Policy program at CIPPEC.
Geraldo Cas o/ AFP/ gett y images
ar g entina
In November, 2007, as Argentina’s first lady and President-elect, Senator Cristina Fernandez de Kirchner walks past an honour guard at the
Chilean government palace in Santiago.
FEBRU ARY | MARCH 2008 Federations
FEBRU ARY | MARCH 2008 Federations
Ms. Kirchner’s election was aided by
the severe fragmentation of the opposition.
Her nearest rival in the elections last
Oct. 28 was Elisa Carrió of the Affirmation
for an Egalitarian Republic Party, who
received 23 per cent of the vote. The forme
r Mini s t e r of Economy and
Production, Roberto Lavagna of the
Radical Party, came third with 16 per cent.
A distant fourth was Alberto Rodriguez
Saa of the Justice, Union, and Liberty
Front Al l iance who
received less than eight
per cent.
Argentina is a federal
democracy with a presid
e n t i a l f o r m o f
government and a bicameral
legislature. The
federation consists of 23
provinces and a semiautonomous
capital. Presidents are
chosen directly in a single,
nation-wide vote that
includes a runoff system
requiring 45 per cent of
the valid votes, or 40 per
cent with a margin of at
least 10 per cent over the
runner-up, for first-round
Presidents have
Presidents are vested with considerable
legislative powers, including a strong
veto and executive-decree authority.
They also enjoy substantial leeway in unilateral
pol icy act ion, especial l y
throughout the budget process.
But, in Argentina, the president does
not govern alone. Presidential power is
counterbalanced by strong federal institutions
and powerful governors. From
this election onward, however, provincial
influence will decline because
elections for president and for the
national legislature will be held on the
same day. With both elections the same
date, the fate of candidates for the legislature
will be linked to their party’s
presidential candidate, not to their party’s
candidate for governor.
To understand the workings of
Argentine-style federalism, five key features
need explaining. First, provincial
governments are important political and
administrative entities.
They dictate their own constitutions
(including electoral rules), enjoy policymaking
authority over vital areas of
public policy (education, health), control
large budgets, and are also in charge of
executing national public policies such
as welfare programs. This policy-making
and implementation authority is complemented
by the Constitution’s residual
power clause, which states that provinces
reserve all powers not delegated to
the federal government.
Second, provinces serve as electoral
districts for congressional elections. The
fact that electoral districts are identical to
provincial boundaries makes the province
the locus of party competition and
political support base for politicians and
Congress is composed of a Chamber
of Deputies and a Senate. The 257 deputies
are elected from party lists under a
proportional representation formula for
four-year terms. On the ballot, voters
choose a list, not the individual candidates.
But in fact, small provinces are
over-represented because the electoral
system also establishes a minimum of
five deputies per province. The Senate
consists of 72 directly elected members,
with three senators per province serving
six-year terms.
Under this system, the number of
votes it takes to elect a senator in the
District of Buenos Aires is much higher
than the number of votes it takes to elect
a senator in one of the rural provinces.
Studies also show that the country has a
high degree of unequal representation in
the lower chamber.
Slums surround capital
Third, Argentine federalism is characterized
by large regional disparities. The 23
provinces and the Federal District of
Buenos Aires vary greatly in size and
wealth. In 2004, the four
largest provinces, Buenos
Aires, Santa Fe, Cordoba,
and the City of Buenos
Aires, accounted for 63 per
cent of the population,
and 72 per cent of GDP.
Furthermore, GDP per
capita was on average 40
per cent higher than in
the rest of the provinces.
Even in these more
developed regions, social
problems are acute as vast
pockets of poverty surround
the major cities. In
the province of Buenos
Aires, there are densely
populated slums outside
the federal capital.
The four largest provinces
elect 17 per cent of
the Senate and in the
lower chamber they elect
51 per cent of all representatives.
Fourth, political parties are usually
coalitions of provincial party organizations.
This is especially the case with
Argentina’s two traditional parties: the
Partido Justicialista (the Peronists) and
Unión Cívica Radical (the Radicals).
These parties have dominated the electoral
landscape and occupied main
public offices for the last 60 years. The
Peronist party has enjoyed more
extended national presence than the
Radicals, backed by more stable and
broader sub-national coalitions.
A second group of parties consists of
minor national parties, who have
achieved a certain degree of national
presence (representation in the Lower
Chamber) since 1983, but have consistently
failed to consolidate and extend
their base of support beyond the capital
city and the province of Buenos Aires.
These provincial parties are the third
group of Argentina’s party system: each
Argentina’s President Cristina Fernandez accepts a gift from Venezuelan
President Hugo Chavez in Buenos Aires on her first day in office, Dec. 11, 2007.
Re ute rs/Ho New
FEBRU ARY | MARCH 2008 Federations
is an important player in only one province
where it is often the dominant or
main opposition party.
Finally, electoral rules and party practices
make provincial party leaders key
players in national politics. The way it
works is that the lists of candidates are
drawn up by each party at the provincial
level. Because the provincial party leaders
control candidate selection, national
legislators’ careers are heavily influenced
by sub-national party leaders, who are
usually provincial governors.
Governors are
Clearly, provincial governors
play a key role in
national policymaking. For
example, since Argentina’s
return to democracy in 1983,
five out of six presidents
h a v e b e e n f o r me r
And what governors care
about is fiscal federalism.
They care about thi s
because they need the
funds to pay teachers’ salaries
and keep hospitals
running, as well as to
finance their political campaigns.
Most of that money
comes through the common
pool of taxes collected
by the national government from joint
and delegated tax sources.
Sub-national governments are
responsible for almost 50 per cent of consolidated
public spending (actually
two-thirds of total spending if pensions
and interest payment on debt are
excluded), but collect only 20 per cent of
consolidated revenue. This represents a
significant fiscal imbalance which is
much greater in some provinces than in
This problem is addressed through a
complex system of intergovernmental
transfers. Most transfers are automatic
and occur under the federal tax-sharing
agreement (called coparticipación), the
process by which part of the taxes collected
by the central government are
reallocated to the provinces.
The possibility of a positive-sum federal
game (in which both president and
governors find it useful to co-operate) is
is more likely to occur during a strong
economy, which prevailed during former
president Kirchner’s mandate. Given the
executive’s power in the budget process,
the availability of discretionary funds has
made possible the exchange of fiscal
resources for congressional support from
Throughout his mandate, Néstor
Kirchner strove to gather governors from
different parties (Radicals, Peronists,
provincial parties) under the government’s
umbrella. He mustered a solid
provincial base for Cristina, his spousal
successor, who, besides being the wife of
the previous president, has built a political
career at both the sub-national level
as a provincial legislator (1989-1995), and
in the National Congress as a former deputy
(1997-2001) and senator (2001-2005)
for Santa Cruz and senator for Buenos
Aires (since 2005). And Ms. Kirchner also
chose a provincial governor from the
Radical party – Julio Cobos, from
Mendoza – to become part of the presidential
ticket and run as Vice President.
Resisting change
Although fiscal federalism as such was
not a main issue in the campaign, all the
candidates recognized the need for
reforms in federal institutions in order to
achieve long-term solvency and equitable
development. However, all of this is
easier said than done: a strong bias
against change conspires against institutional
changes in the federal fiscal arena
as provincial and national government
interests and vetoes clash.
Two additional factors caused the
provinces to have less influence in this
election. One was the timing of the elections.
For the first time since 1989,
presidential and legislative elections
were held on the same day. Previously,
governors set the date for national legislative
elections and thus could affect who
was elected.
In this election, the fates of legislative
candidates were directly linked to those
of their parties’ presidential hopefuls
rather than to gubernatorial
candidates. Thus, with Ms
Kirchner’s first-round win,
h e r p a r t y ’s a l l i a n c e
increased its already comfortable
majority in the
Chamber of Deputies by 20
seats (including allies) to 161
out of a total of 257. In the
Senate, the government is
lacking one vote to control
two- thi rds of the 7 2
And then there is the fact
that not all provinces matter
equally in a presidential
election. Given that the
president is elected in a single
nationwide election, the
key to success is securing
votes in the most populous
districts, in the Federal
District of Buenos Aires, the city of
Buenos Aires, Santa Fe, and Córdoba.
Despite these caveats, the support of
provinces will be essential for the government
in the post-electoral period. After
all, international and local observers
agree that Argentina’s growth rate will
probably be lower over the next four
With moderate growth, the governors’
support will be more expensive to Ms
Kirchner and the new government’s
ongoing challenge is to keep a governing
coalition together in what is expected to
be a decidedly less buoyant economic
environment. Stability is imperative, after
all, if, as many pundits predict, Nestor
Kirchner will in turn succeed his wife for
the presidency when her term ends in
Former Argentine president Nestor Kirchner speaks to the press during
Colombian hostage negotiations in Caracas in December 2007. The
hostages were released by guerillas in Colombia in February 2008.
AP Photo/Howa rd Yanes