Argentina’s escape from Kafka’s castle

Guillermina Sutter Schneider

Hi, it’s Guillermina here! Today, I’m bringing you some good news about Argentina, my home country.

Wherever you live, you’ll encounter bureaucracy. Whether you’re starting a business, hiring a new employee, changing your name, or even planning to get married, the government often steps in, requiring extensive documentation and imposing specific (and sometimes very complex or even absurd) requirements.

But what’s the ideal balance between order and overreach? That’s one of my favorite topics: law and economics. This field studies how laws and regulations impact human behavior, shape incentives, and influence outcomes. At its core, law and economics asks critical questions: Which regulations help or hinder innovation? When does the cost of compliance outweigh the benefits of the rule itself?

Argentina serves as a vivid example of what happens when the balance tilts toward overregulation. At the end of last year, the country was on the brink of hyperinflation, over 40% of the population lived in poverty, the fiscal deficit was up to 15% of GDP, and the country risk index exceeded 2,000 points (higher than when Argentina defaulted on its debt in 2001). In surveys, nearly 70% of young Argentineans expressed a desire to leave the country.

Next Tuesday will mark one year since Javier Milei became president of Argentina in the middle of that crisis. Milei campaigned on a program of deregulating the economy and significantly reducing the size of government, which he describes as “the most ambitious reforms ever undertaken in Argentina.” I was curious to measure how far these deregulatory efforts have actually gone in the year since:

There’s no centralized source of information on the reforms — but I discovered that the Minister of Deregulation, Federico Sturzenegger, had been sharing updates through his public posts on X (Twitter). I compiled a total of 79 posts referencing various deregulations and examined the specific rules that were either repealed or modified. These 79 actions affected a total of 527 regulations from previous administrations, 54% of which were abolished completely.

Which rules are being undone? Almost 40% of the abolished regulations had been implemented during the presidency of Alberto Fernández from 2019 to 2023, many of them signed only days before Milei himself took office.

Meanwhile, close to 10% had been passed during Argentina’s military dictatorship. And there’s more coming in that regard — the “Ley Hojarasca,” a bill that will be presented to Congress soon, promises to drop another 20 laws from the military-led governments of Onganía (1966–1970), Lanusse (1971–1973), and Videla (1976–1981).

Having read through most of the laws that were dropped, I can’t help mentioning a few that caught my eye:

• Just like in the Middle Ages, some government agencies had “blood privileges” that let family members inherit the job when an employee died. This happened in important institutions like the tax office, social security administration, Central Bank, and National Bank.
• When traveling by plane, public employees were obliged to fly the state airline, Aerolíneas Argentinas, which typically charged higher prices than other airlines.
• Due to pressure from Aerolíneas Argentinas, no other airline was allowed to keep planes overnight at the main airport in Buenos Aires. This meant that planes often had to leave the airport at night and return the next day.
• Every transport of yerba mate had to be meticulously recorded in numbered folders and printed forms and carefully transported in physical form from office to office.

Decades of excessive bureaucracy discouraged investment and created barriers to economic growth. They created privileged groups — including labor unions, business associations, and the bureaucracy itself — that imposed enormous costs on society. To keep that structure going, the government regularly spent more than it had, and the central bank finance that spending by habitually printing more and more money. Instead of fostering progress, the weight of these regulations has been a drag on the economy, contributing to inefficiency and ultimately playing a significant role in the country's recurring economic crises. After looking through some of these rules, I was left asking myself: How did we Argentinians, end up with such absurd regulations? It feels like we’ve always held ourselves to a much higher standard of discipline and hard work than we ever held our government.

The task of helping Argentina escape its version of Kafka’s castle remains large. But 68% of Argentineans now no longer think about leaving the country, and another 74% want to encourage their children to study and work in Argentina. I’m hopeful too.

That’s a wrap for now. Wherever you are, I hope you don't encounter too many regulations! Next week, Michi will take over our Weekly Chart series — we’ll see you then!

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Guillermina Sutter Schneider

(@gsutters) is a product specialist at Datawrapper and part of the sales team. She helps you get the most out of the tool through public webinars. A data visualization designer herself, Guillermina likes coding, color theory, numbers, and Berlin — not necessarily in that order.

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