What Makes Strong Federalism Seem Weak? Fiscal Resources and Presidential-Provincial Relations in Argentina

Abstract

This article revives an unresolved political debate now masquerading as an empirical puzzle: how can we characterize the nature of Argentine federalism when recent presidential administrations support conflicting conclusions about it? Carlos Saúl Menem (1989–1999) easily pushed through policy changes with the support of governors and provincial delegates in congress, implying that federalism is weak. Fernando De la Rúa (1999–2001) faced considerable provincial and congressional opposition, implying that federalism is strong. To resolve this puzzle, I recast federalism in terms of its economic context. I argue that economic growth renders presidential–provincial relations positive-sum, leading to intergovernmental cooperation and the appearance of weak federalism. Economic decline turns presidential–provincial relations zero-sum, raising intergovernmental conflict, and the appearance of strong federal institutions.