For fourteen of the twenty years preceding Argentina’s crisis in 2000, its economic policy operated within an IMF program. Even after the initial success of its currency board arrangement and debt restructuring in the early 1990s, Argentina relied on the IMF’s endorsement and occasional financing to navigate choppy international markets. As the IMF came under criticism for its handling of Asia’s financial crisis, it set aside early doubts about Argentina’s currency board arrangement and embraced the country as a symbol of the success of IMF policy advice.
…the IMF got both the economics and politics wrong by continuing to support Argentina’s attempts to cling to its peg and avoid a restructuring through 2001. In 2001, the IMF bet that continued support for convertibility would be less risky politically, even if the economics did not work. However, the IMF underestimated the extent to which it would be blamed for backing a failed system.