Argentina requires profound structural changes that go beyond Milei himself.

A fter almost two years in office and now preparing for the midterm elections due on October 26, Javier Milei’s Argentinian government is experiencing its most serious economic and political turbulence yet. Although Milei has achieved outstanding economic results in a short time, he has not yet been able to make much progress on the significant structural reforms required to leave Argentina’s dysfunctional past behind.

Milei insists that such reforms will be carried out if his party and its allies win the midterms. But is it reasonable to expect that Argentina’s future depends only on whether one political coalition remains in power?

James M. Buchanan, Nobel laureate in economics, challenged this way of thinking in his essay “Politics without Romance.” He argued that politicians act within an institutional environment that shapes their behavior. A government’s success or collapse depends less on the individuals in power than on the rules of the game. In the spirit of Buchanan, Argentina needs a complete overhaul of its economic and political framework — not just a change of players.

There is no doubt that some of Milei’s economic achievements are remarkable. When he took office in December 2023, government spending and the fiscal deficit were out of control, inflation was running at 200 percent per year, and GDP was shrinking by 1.6 percent. Less than two years later, Milei cut spending sharply and turned a 5 percent fiscal deficit into a 1 percent surplus. Inflation is now projected at 27 percent for 2025, and GDP is expected to grow 5.5 percent this year.

But behind these numbers, Argentina’s institutional scaffolding remains almost untouched. On the economic front, pension, labor, and tax reforms are still pending. The pension system is bankrupt, labor regulations remain rigid, and, even though some tax cuts have been implemented, taxes continue to suffocate investment. On the political side, the division of power among Argentina’s different levels of government remains blurred, while improvements to the rule of law have been scarce. Without progress on these fronts, the radical transformation promised by Milei is still far away.

Milei recognizes the need for these structural changes and emphasizes that his party must win the midterms to push reforms through the legislature. But even with a landslide, his government will not hold a majority in either chamber, since only part of Argentina’s congressional seats are renewed at each election. Until a future reelection delivers a proper majority, Milei will have to govern with limited legislative strength.

But political reform does not depend only on winning legislative votes. It comes through a stronger judiciary, more autonomous local governments, and credible checks and balances that transcend any singular administration.

Argentina requires a transformation at its institutional level. The challenge is not simply to elect the right people to do the right thing but to implement a framework that depends less on who is in charge at any given point. Institutions must provide the foundation for long-term economic growth and political stability. This involves not only maintaining the fiscal surplus, putting the currency on an even keel (no easy task as recent events have reminded us), and advancing pension, labor, and tax reforms but also deeper political changes, such as strengthening the judiciary and improving the rule of law.

F. A. Hayek, one of Milei’s major intellectual influences, believed that the best way to achieve social reform and lasting development was to create “a social system which does not depend for its functioning on our finding good men for running it, or on all men becoming better than they now are, but which makes use of men in all their given variety and complexity, sometimes good and sometimes bad, sometimes intelligent and more often stupid.”

Milei’s government will eventually end. Others will take office, possibly even those who left Argentina on the brink of collapse in 2023. But if Argentina builds a sound institutional structure, even the worst politicians will be constrained from returning to policies that deliver short-term political gain at the expense of long-term prosperity.

Milei is leading Argentina in the right direction. But there are still rough waters ahead. Argentina requires profound structural changes that go beyond Milei himself. To be sustainable, the country’s improvement must depend not on whether a single leader governs well but on whether its institutions ensure that whoever governs must govern well.