Did Argentina’s Deregulation Work? Measuring the Chainsaw’s Results

The “30% Rule”

Sturzenegger argues that heavily regulated sectors tend to see price drops of roughly 30% when deregulated. He bases this on a simple observation: if a regulation exists that prevents a more efficient transaction from taking place, removing it allows the market to find a lower equilibrium price. Across the sectors targeted by the DNU and Ley Bases, Sturzenegger claims this pattern has held remarkably consistently.^[1][7]

This is not an independently verified economic law — it is Sturzenegger’s empirical rule of thumb derived from observing outcomes across multiple deregulated sectors. Critics note that confounding variables (inflation normalization, seasonal effects, parallel policy changes) make it difficult to isolate deregulation’s contribution. Nevertheless, the claim has become central to the government’s narrative of reform success.^[7]

Case Study: Rent Law Repeal

The most cited test case of the 30% rule is Argentina’s rental market. In December 2023, the DNU repealed the Ley de Alquileres (rent control law), which had imposed three-year minimum lease terms, annual adjustment caps, and mandatory contract registration. Within months, rental supply in Buenos Aires surged by approximately 170%, according to real estate market data.^[9]

According to CUCICBA (the Buenos Aires real estate brokers’ association), real rental prices in Buenos Aires fell approximately 40% between January and September 2024. This figure is in real terms — adjusted for Argentina’s high inflation — meaning nominal rents still rose, but far less than the general price level. The rent repeal remains the government’s strongest evidence for deregulation delivering consumer benefits.^[9]

Fiscal Outcomes

The Milei administration achieved Argentina’s first fiscal surplus in over a decade, ending a streak of continuous deficits dating to 2010. This was accomplished through aggressive spending cuts rather than revenue increases: government expenditure was reduced by approximately 30% in real terms during 2024. According to government estimates, these measures generated savings exceeding US$4 billion.^[1]

The civil service workforce was reduced by approximately 35,000 employees through a combination of non-renewal of temporary contracts, voluntary retirement programs, and elimination of positions deemed redundant. The government framed this as cutting “ñoquis” (ghost employees who collect salaries without working), though labor unions contested the characterization, arguing that many positions served essential functions.^[1][2]

GDP: V-Shaped Recovery

Argentina’s GDP contracted by 1.3% in 2024, the inevitable consequence of the fiscal shock therapy. The austerity measures, currency devaluation, and removal of subsidies created a sharp recession in the first half of the year, with real wages declining and consumer spending contracting.^[10]

Recovery began in Q4 2024 and accelerated through 2025. According to INDEC official figures, GDP grew 5.8% year-over-year in Q1 2025, 6.4% in Q2, and 3.3% in Q3 — producing a V-shaped recovery trajectory. Full-year 2025 growth is estimated at approximately 5.2%, though this partly reflects the low base effect from the 2024 contraction.^[10]

CONAMI Micro-Lending

CONAMI (Comisión Nacional de Microcrédito) was a state micro-lending agency established to provide small loans to low-income entrepreneurs. According to Sturzenegger’s analysis of the agency’s portfolio, the cumulative loss rate reached 99.85% — meaning that of all funds lent over the agency’s lifetime, virtually none were ever repaid.^[1]

Sturzenegger uses CONAMI as an emblematic case study of state failure: an agency that consumed public resources while delivering no measurable economic benefit. The 99.85% figure compares cumulative disbursements against cumulative repayments over the agency’s full history, which critics note overstates the failure rate compared to measuring default rates on a per-cohort basis. Regardless of methodology, CONAMI became a poster child for the administration’s argument that many state agencies exist to serve bureaucratic interests rather than their stated beneficiaries.^[1]

Chainsaw 2.0: The Forward Agenda

With the first phase of deregulation largely implemented through the DNU and Ley Bases, the Ministry of Deregulation turned to what Sturzenegger calls “Chainsaw 2.0.” The centerpiece is the Ley Hojarasca (“Dead Leaves Law”), a bill proposing the repeal of approximately 70 obsolete or redundant laws identified through systematic legal review.^[4]

Sturzenegger has indicated that the reform agenda is far from complete. The ministry continues to identify regulatory barriers sector by sector, using the same Track Changes methodology that produced the original DNU.^[5] Read how the Track Changes methodology works →

Civil Service Reform

One of the more structural reforms is the introduction of CONCURSAR, a competitive entrance examination system for public sector employment. The system requires standardized testing for new hires, targeting the longstanding practice of political appointment to civil service positions.^[3][6]

The reform aims to professionalize Argentina’s civil service by replacing patronage-based hiring with merit-based selection. Early implementation has focused on new positions, with the government signaling that existing employees will not be retroactively subjected to examinations. The long-term impact depends on whether future administrations maintain the system.^[8] Meet the people who designed the reform program →

Congressional Reality Check

Despite the ambitious scope of the deregulation program, only approximately 20% of the combined DNU and Ley Bases reforms have been formally enacted into law through congressional approval. The remainder either operate under executive authority (which can be reversed by future presidents) or await legislative action.^[5]

This creates a structural vulnerability: reforms implemented by decree can be unwound by a future administration with different priorities. The congressional bottleneck reflects both the political difficulty of passing comprehensive deregulation in a fragmented legislature and the inherent tension between executive speed and democratic process.^[2] See the full political timeline of the deregulation program →