Neoliberal reforms, currency pegs and crisis in Mexico and Argentina

Abstract

This article argues that exchange rate regimes established by the Mexican peso currency band and the Argentinean Convertibility Plan were key dimensions of the political strategies of neoliberal structural reform through which discipline was imposed on workers and the state. By subordinating wage struggles and state spending to the maintaining of currency pegs, the stabilisation programmes helped to redefine the balances between capital and labour and the conditions of integration of each country within the global economy. This in turn allows for an understanding of the performance of the managed exchange regimes in each country and the states’ divergent economic responses to their exhaustion.