October 21, 2015

Maria Victoria Murillo, a professor of political science and international and public affairs, studies distributive politics in Latin America; her research  has covered labor politics and labor regulations, public utility reform, education reform, and economic policy more generally. Her work on political parties analyzes both their coalitional and policy implications as well as their linkages with voters in new democracies. Her empirical work—in her native Argentina and throughout Latin America—is based on methods ranging from quantitative analysis of datasets to qualitative field work to survey and experiments.

Murillo has written a pair of books and numerous papers, and co-edited Argentine Democracy: the Politics of Institutional Weakness (Penn State, 2005).

She first  spoke with Joanne Hvala in advance of Argentina's general election on October 25, and then again with an eye toward the November 22 runoff .

Two candidates lead the opinion polls. How do they differ?

Daniel Scioli, who is a Peronist and the governor of Buenos Aires province, has a 10 percent lead over Mauricio Macri, the mayor of Buenos Aires. The question is whether Scioli will win in the first round or will there be a run-off. In his campaign he has promised “continuity with change,” which is a good slogan because the Argentine voter likes incremental change.  His opponent, Macri,  wants sharper changes in  economic policies. His center-right party is associated with the pro-market reforms of 1990s. The Argentine voter does not want economic adjustment and see Macri as more likely to follow those policies. There is also a socioeconomic component in the vote, with poorer and less educated voters being more likely to support the Peronist candidate and richer and more educated voters leaning more towards Macri.

Why is Sunday’s election so important?

This will be the first time that Argentina’s elected president is likely to follow another elected president from the same party who is not his or her spouse. Cristina Fernández de Kirchner, the current president, can’t run for a third term due to term limits. She or her husband, President Nestor Kirchner, were in office for the last dozen years, So this generates an interesting pattern of transition within the Peronist party in a relatively stable situation; many of Argentina’s prior presidential transitions were accompanied of economic crises, which is not the case now. Her likely successor—Scioli—is from a different faction of the party, which will represent a significant leadership change and a watershed for the Peronist Party.

What  policy changes or reforms might be expected with a new government?

The new government needs to address high inflation, which stood at 14.5 percent in September. It also must close the gap between the two different exchange rates in which the Argentine currency is traded for dollars—the official exchange rate is currently around 9.5 pesos per dollar and the black market is approximately 16 pesos per dollar. This is hurting exports, and the fiscal deficit—which stands at $5.07 billion, is problematic, given the cost of subsidies in energy and transportation. The new administration will have to reduce those subsidies, but such a policy is likely to generate higher prices for consumers of those services.

How successful is that likely to be?

Scioli has suggested that he will make changes incrementally and compensate those who need the most help.  However, this has proven to be politically difficult in the past as the subsidies benefit mostly inhabitants of the city of Buenos Aires and surrounding areas—the most populated in the country, where the national government is located and where it is easier to make any protest salient.  The agricultural policies have also made it difficult to export by establishing quotas and permits in an attempt to control the domestic price of commodities, like wheat and corn. These policies may be revised by the next administration as well as taxes on exports for agricultural production in areas farther away from ports, which are currently facing economic difficulties.

What advice would you give to the new president?

Take advantage of the honeymoon period. Use it to reduce energy and transportation subsidies in an incremental way. This won’t be easy because the voters are vocal and it is easy for Macri supporters in Buenos Aires to protest if Scioli is making such reforms; President Kirchner tried to cut subsidies to energy and had to back off.  The new president also should tackle the distortions created by the double exchange rate. The black market is small, and if that issue is resolved the country will have better access to foreign currency. Similarly, addressing inflation rather than tampering with statistics will give more confidence to both consumers and investors. All these policies should be implemented while sustaining social policies that provide a safety network for poorer voters.

Additionally, the new president is likely to negotiate an agreement with the creditors who did not accept the terms of Argentina’s debt renegotiation in 2003—remember that Argentina defaulted on its sovereign debt in 2002. These are the so called ‘hold-outs’ who ask for a 100 percent face value on their bonds rather than the haircut agreed with other bond holders. Whereas such an agreement can broaden access to international markets,  its terms are crucial for domestic politics. I do not believe that the government can give them the 100 percent face value they are asking through the Courts without paying a political cost.

In the October 25 general election, Daniel Scioli—the Peronist candidate—received 36.8 percent of the vote, while Mauricio Macri—the center-right candidate—received 34.3 percent.

Murillo explained that under Argentina’s 1994 constitution, to win election presidential candidates must receive either 45 percent of the vote or 40 percent of the vote with a 10-point margin over the second-place finisher. A runoff election will take place on November 22.

How can we interpret the results of last Sunday’s election in Argentina?

The election was surprising in several ways. For one thing, surveys failed to predict the close margin between the winner and the runner-up.

This upcoming runoff will be the first ever in Argentina. In 2003 Peronist Carlos Menem received the most votes in the general election, but withdrew from the runoff because he expected to be defeated by Peronist Nestor Kirchner. Just as in 2003, Peronist divisions were crucial in determining the result last Sunday: Sergio Massa, a former minister of Cristina Fernandez de Kirchner who broke with her and established Renewal Front (FR) in 2013, finished third with 21 percent of the vote.

The biggest surprise was that Mauricio Macri’s candidate—Maria Eugenia Vidal, who is his deputy mayor in the city of Buenos Aires—won the governorship of the largest electoral district, the province of Buenos Aires, where 37 percent of voters reside. The province’s current governor is Macri’s rival, Daniel Scioli of FPV. Yet Vidal, who is only 42, defeated the FPV candidate, Anibal Fernández, who is President Kirchner’s chief of staff.

The interesting thing about the Buenos Aires race is that Fernández, who has a very negative public image, received 320,000 votes fewer than Scioli, whereas Vidal, his opponent, received 450,000 more votes than Macri. In Argentina, voters receive large paper ballots with candidates for many different positions; the easiest thing is just to vote the party line. But these margins show that voters chose to discriminate among candidates at different levels even in a concurrent election within a byzantine electoral system.

Pictured: Maria Victoria Murillo