People receive a free meal from a soup kitchen in front of the International Monetary Fund (IMF) offices in Buenos Aires, on October 31, 2019, during the first social protest since Argentina's president-elect Alberto Fernandez won the South American country's presidential election. - The return to power of protectionist Peronists comes amid a lengthy recession and a debt crunch, raising market fears of a possible default on a $57 billion IMF loan. Fernandez has insisted his government would not default but rather seek to renegotiate the terms of the IMF loan, and sought to reassure voters that their bank deposits would be safe under his administration. (Photo by RONALDO SCHEMIDT / AFP) (Photo by RONALDO SCHEMIDT/AFP via Getty Images)
The IMF, Argentina and Ecuador: Have Lessons Been Learned?
One major difficulty faced by the IMF, or whoever designs macroeconomic adjustment policies in the current Latin American context, is the difficulty involved in reading appropriately – and responsibly – a country’s political dynamics and how people will react to austerity policies. Even if the IMF could hire Machiavelli as an adviser, its ability to take political tea leaves into account would not improve. As for avoiding risks entirely, that would only happen if the IMF fundamentally changes its mission – and stops lending to troubled countries entirely.