Amidst ongoing challenges, reducing size of government is essential step toward correcting Argentina

Libertad y Progreso has been named a finalist for Atlas Network’s 2018 Templeton Freedom Award.

A little over a century ago, Argentina was one of the world’s wealthiest nations. Yet decade after decade of economic mismanagement and a ballooning state has tanked its economy and ingrained a culture in which Argentines view their government as a benevolent provider of prosperity — even as 28 percent of the country lives below the poverty line, taxes on private firms are the second highest in the world, and public spending clocks in at 44 percent of GDP.

Local think tank Libertad y Progreso (LyP) set out to show the real nature of government with “Downsizing of Argentina’s Government,” a massive education, awareness, and advocacy campaign that addressed issues of nepotism, government waste, and public political apathy.

Argentina used to be one the world’s wealthiest nations. Yet decades of economic mismanagement and a ballooning state have tanked its economy. Libertad y Progreso’s massive education campaign showed how absurdly bloated the size of the state was, and prompted many important changes, even in its present economic crisis.

LyP’s research, media presence, and social activism resulted in the Macri administration’s adoption of a series of reforms, including tax and debt reduction, transportation modernization, and regulatory relief, to reduce the size of the state.

While Argentina faces ongoing challenges, borne from years of economic mismanagement, LyP's important work is popularizing the understanding that lasting prosperity requires self-reliance, not government intervention.

“We believe that the recent restructure of the Federal cabinet, merging 21 ministries into 10, confirms that we are finally having some real impact in policy making in Argentina,” said Agustín Etchebarne, director general of LyP. “With three years of delay the government is implementing part of our agenda to decrease government expenditures, pressured by the economic crisis. This proves that a small team of professionals using social media, videos, and participating in talk shows and media appearances with clear ideas and perseverance, can influence the direction of government policies and public opinion. We are very proud of being a small part of the Atlas Network of think tanks that are contributing to alleviating poverty through improving self-reliance, bringing freedom and prosperity in our countries.”

A lopsided landscape

For decades, Argentina’s size of the state has grown exponentially. There is a prominent mentality in Argentinian culture that in order to be successful, government must play a central role in citizens’ lives. The impact of this can be seen in the fact that 21 million Argentines currently receive payments from the government (either as public employees or through publicly-subsidized benefits) while only 8 million citizens work in the private sector. There is also a general acceptance of corruption as an unchangeable (and even helpful) element of government which incentivizes fraud and bribery for federal employees.

Using a thorough, first-of-its-kind report, and a compelling, easily digestible video, LyP detailed the total size of the government and provided proposals to reduce it.

The report appeared first on the cover of La Nación (one of Argentina’s most influential news outlets), seven TV talk shows, 19 radio stations, 37 newspapers, and 690 additional mentions in other media outlets. This led to swift and broad reform, that is ongoing.

President responds

In response to the report and media campaign, President Mauricio Macri said that Argentina must “leave behind the harmful intervention politics of converting the State into an endless source of jobs for friends, family, and partisans”. He then went on to sign a Modernization Agreement with 13 governors which called for a State that is “modern, efficient, close to the people and federal.” The government announced a new regulation for public employees which for the first time established clear guidelines to avoid nepotism, encourage early voluntary retirements, and freeze new hiring for various vacancies.

Additional impact as a result of LyP’s education and awareness campaign: the government merged two ministries of communications and modernization into one; the government merged two ministries of finance and taxation into one; former President Cristina Fernandez de Kirchner mentioned LyP's report to minimize the effects of government reduction of public spending after the shutting down of several secretaries and sub-secretaries in all ministries; and after some recommendations delivered to the new Agriculture Minister he ordered a downsizing of 10% of its employees.

And on Sept. 2, La Nación reported that Macri decided to move forward with the biggest restructuring of his team since he took office, which includes the elimination of 13 ministries.

“Government leaders rarely have the will to downsize what they control,” said Brad Lips, CEO of Atlas Network. “It takes an independent, non-partisan think tank like Libertad y Progreso to hold feet to the fire, no matter who is in power, and show how to implement reforms so government will serve the public, rather than be a burden to it.”

The main objectives of LyP’s size of the state report were: first, to influence policy makers in order to reduce public spending and to design policies that could promote the creation of private employment. And second, to raise awareness on these matters among citizens through both traditional and social media, in order to increase support for governmental reform projects.

LyP succeeded in its objectives. And several outside influencers confirmed this. It is a well-respected think tank with leadership that inspires the entire staff, and it has become one of the leading advocates for free-market ideas in Argentina.

About Libertad y Progreso:
Buenos Aires-based Libertad y Progreso develops and promotes long-term public policies and promotes citizen participation and debate about the role of the State and of the people in our society. Its vision is an Argentina transformed into an open society based on respect for individual rights, limited government, private property, free markets, and peace.

About Atlas Network’s Templeton Freedom Award and the additional 2018 finalists:
Awarded since 2004, Atlas Network’s Templeton Freedom Award is named for the late investor and philanthropist Sir John Templeton. The award annually honors his legacy by identifying and recognizing the most exceptional and innovative contributions to the understanding of free enterprise, and the public policies that encourage prosperity, innovation, and human fulfillment via free competition. The award is generously supported by Templeton Religion Trust and will be presented during Atlas Network’s Freedom Dinner on Nov. 8 in New York City at the Intrepid Museum Manhattan. The winning organization will receive a $100,000 prize, and five additional finalists will receive $25,000 prizes. The finalists for Atlas Network’s 2018 Templeton Freedom Award are:

• The Buckeye Institute (Columbus, Ohio), “Increasing Safety, Liberty, and Justice: Comprehensive Criminal Justice Reform in Ohio”
• The Commonwealth Foundation (Harrisburg, Pennsylvania), “A Titanic Shift: Pension Reform in Pennsylvania”
• The Egyptian Center for Public Policy Studies (Cairo, Egypt), “A Better Budget for a Better Egypt”
• Libertad y Progreso (Buenos Aires, Argentina), “Downsizing of Argentina’s Government”
• Lipa, Taxpayers Association (Zagreb, Croatia), “Campaign Against the Introduction of the Property Tax in Croatia”
• The Mercatus Center at George Mason University (Arlington, Virginia), “Unleashing Prosperity by Cutting State Regulations”