What is President Javier Milei, really: a savior, or a bankruptcy trustee? An anarchist, a populist, or a classical-liberal reformer? Is he dismantling the casta — the entrenched political establishment — or is the casta undermining his reform agenda? In the end, will freedom prevail, or will the corrupt system reassert itself and absorb the would-be reformer?
I recently formed my own impressions in Buenos Aires. What I saw is a fascinating country that, after decades of decline, is regaining its footing, pushing back widespread poverty, and rediscovering confidence. Some key indicators have already attracted international attention: sharply falling inflation, a visibly declining poverty rate, unemployment that is easing despite massive and long-overdue layoffs in the public sector, the first balanced federal budget in years, and a recovery in economic growth.
Other developments receive less attention. On the newly liberalized housing market, the supply of apartments has increased almost overnight. Mobile coverage is expanding rapidly thanks to Starlink. Following deregulation of air transport, investment in aircraft is picking up again. And even without subsidized credit rates, Argentines are once again purchasing durable consumer goods — washing machines rather than just a block of cheese here or a drinking glass there. Until recently, even such small items were often bought on installment plans, a symptom of distorted incentives under chronic inflation and massive subsidies.
Market activity is also increasing as import barriers and protective tariffs are dismantled. Yet branded foreign goods remain unaffordable for many Argentines. In an upscale shopping mall, a simple Samsung USB adapter can cost around $75, while an equivalent product from a small neighborhood shop sells for about one dollar.
Some reforms that Milei managed to push through quickly — despite initially weak congressional backing — are only now beginning to take effect. Through a more open trade stance toward the United States and the European Union, a pragmatic approach toward China, and a new investment framework (the “RIGI regime”), Argentina is opening itself to foreign direct investment in energy, natural resources, and data-intensive industries. Greater investment, planning, and legal certainty for large-scale projects are beginning to bear fruit.
Equally striking is the work of Federico Sturzenegger. The classical liberal economist and minister for deregulation and state transformation, together with his team, is dismantling or simplifying regulations, price controls, taxes, and administrative burdens at a remarkable pace. Still, supply chains must first adjust to new incentives, and investors need time to rebuild trust in Argentina’s institutional foundations.
Whether this succeeds will matter far more for Argentina’s future than debates about Milei’s personal eccentricities or his use of provocative political symbolism. Those elements appear to matter little to most Argentines. In conversations with Uber drivers, economics students, and service workers, I encounter predominantly positive — often enthusiastic — assessments of the president; only a determined minority remains clearly opposed.
Classical-liberal economists in Buenos Aires tend to be more cautious. They are skeptical of any cult of personality and acutely aware of the scale of the task facing Milei — and any future government. The catastrophic situation he inherited was the result of a state that had grown bloated and overstretched over decades, dominated by organized interests — the casta — and embedded in a political culture where personal connections and forceful rhetoric mattered more than expertise and adherence to general rules.
Previous presidents also promised to confront corruption and clientelism — most notably Carlos Menem in the 1990s, often described as a “neoliberal populist.” His mixed legacy reflects the fact that he was primarily a populist and Peronist who employed (neo-)liberal instruments selectively. With Milei, the order appears reversed. He is, first and foremost and by conviction, a libertarian who pragmatically uses populist rhetoric and style to advance a reform agenda.
This increases the likelihood that Milei’s reforms could have lasting effects. Yet the reform path remains narrow, risky, and long before reaching the institutional core. Above that core lies a dense thicket of cronyism and mismanagement. Provinces such as Tierra del Fuego cling to special privileges, while the federal system creates weak incentives for provinces to govern efficiently and spend public funds responsibly. Well-organized labor unions can be expected to resist long-overdue reforms. The judiciary remains only formally independent. Despite improvements, the tax system still discourages investment. Rigid pre-reform labor regulations leave roughly four in ten workers outside formal employment. And the casta — which successfully advanced its interests under successive governments — has not simply disappeared under Milei. On the contrary, Milei relies on experienced political operators, many of whom already served under former President Macri and are now tightly coordinated and disciplined by his sister, Karina Milei.
Most Argentines, however, appear willing to overlook questionable connections as well as Milei’s personal idiosyncrasies. Nearly everyone who knows him personally — even critics who disagree with him substantively — agrees that Milei is genuinely committed to libertarian reform and to improving the country’s prospects. There is still much to do in this regard. Major reforms of social security, labor markets, the monetary regime, taxation, the rule of law, and federal relations remain pending. Without them, recent successes will remain fragile.
The chances of success vary across policy areas. For a radical monetary shift such as dollarization, Milei likely still lacks sufficient political and financial capital. Political capital is also required for reforms of the justice system, where the path toward a truly independent judiciary appears even steeper than the path toward monetary stability. Yet judicial independence is essential for further reforms — such as credible fiscal rules that could anchor balanced budgets over time or a restructuring of Argentina’s federal system.
The most concrete hopes rest on the recently adopted labor-market reform and a more investment-friendly tax code, areas where the government can capitalize on having more seats after mid-term elections. The new legislature convened in December with an ambitious reform agenda framed by Milei in an optimistic “Make Argentina Great Again” message.
For this agenda to succeed durably, however, it will take more than Milei alone. A broad share of Argentines must support the transformation — and many appear ready to do so. After repeated crises, Argentines possess remarkable economic literacy. Especially younger Argentines understand inflation, financial markets, and the relative stability of different assets all too well — knowledge that has long been essential for everyday survival.
Less developed, however, is a shared understanding of how robust rules and institutional checks and balances can constrain political discretion and limit abuses of power. Too often in the past, rules were ignored and safeguards circumvented.
Argentina’s current reform experiment takes this reality into account. It does not follow classical-liberal textbook advice, but rather reflects the political constraints of a deeply cronyist state — constraints that Milei seeks to navigate in order to pursue a libertarian reform agenda. In this sense, he attempts to use the logic of the existing system against itself. It is a genuine experiment, one whose results are likely to matter well beyond Argentina.
