Adolfo Rodríguez-Vargas
OECD
OECD Economic Surveys: Argentina 2025
Abstract
Improving Argentina’s business environment is key for boosting stagnant economic growth and reverting the decline of labour productivity. Recent policy actions to streamline business regulations have led to considerable improvements and should continue, particularly by tackling remaining entry barriers to services sectors. Ensuring the independence of the competition authority will play a key role for strengthening competition. Continuing easing restrictions on imports and improving the country’s attractiveness to international investors can help domestic firms to access better technologies and improve their productivity, while also fostering new export opportunities. Addressing low judiciary efficiency, improving infrastructure, fostering digitalisation, and strengthening public sector integrity could reduce costs and strengthen the competitiveness of Argentinian firms.
Over the past 15 years, economic growth has been stagnant in Argentina. The economy grew on average 0.9% each year compared to 1.7% for the OECD during the same period. In terms of per capita GDP (in PPPs), Argentina dropped from being the 52nd largest economy in 2009 to the 69th in 2023 (World Bank, 2023[1]). Potential growth is estimated to have fallen from 3.5% in 2008 to around 0.5% in 2025. Macroeconomic instability and the subsequent boom and bust cycles described in Chapter 1 have undoubtedly played a role, and falling labour productivity has been a key factor behind weak growth (Figure 4.1). Between 2012 and 2023, labour productivity decreased by an average of 1.3% per year.
Note: LAC6 includes Costa Rica, Colombia, Mexico, Chile, Peru, and Brazil.
Source: World Bank WDI, OECD (2025), OECD Economic Outlook: Statistics and Projections (database).
This chapter reviews priority areas for policy reform to boost productivity growth and potential output. The focus is on making domestic markets more competitive, addressing costs from institutional and infrastructure bottlenecks, increasing access to imports and foreign investment, and promoting stronger exports.
High entry barriers have reduced competition in key sectors. Close to 70% of firms are over 10 years old, and less than 1% have been created in the last three years. Argentina is making significant progress in moving towards a more competition-friendly regulatory framework and this progress should continue. Entrepreneurs still face onerous procedures to start a business, many entry barriers remain in the services sector and retail, and governance of state-owned enterprises can be improved. OECD research suggests that additional product market reforms aligning the regulation with OECD best practices could raise potential output by up to 7% in the coming decades. Argentina should also ensure coherent regulation across levels of government and that the impact of new regulations is regularly assessed. Making the competition authority independent is also key to ensure a level playing field for firms.
Continuing to ease restrictions to imports and improving the country’s attractiveness to international investors can boost access to better technology and know-how. Fostering conditions for stronger and more diversified exports can allow Argentina to reap new opportunities.
The competitiveness of Argentinian firms is curtailed by high costs in several areas. Infrastructure bottlenecks increase logistics costs, while slow judicial procedures make enforcing property rights more costly than elsewhere. Promoting digitalisation can improve the competitiveness of Argentinian firms, as adoption of digital tools lags OECD countries even among the largest firms. Progress in this front is hindered by administrative requirements, especially at the local level.
4.1.1. Reducing barriers to competition from business regulations
Business regulations often pursue legitimate objectives, but they can also act as a barrier to competition, entrepreneurship, investment, and employment, sometimes as unintended collateral damage and sometimes on purpose. Despite notable recent reforms, regulation of product markets in Argentina remains very restrictive according to the OECD-WBG Product Market Regulation indicators (PMR) (Figure 4.2, Panel A), which measure the extent to which a country's regulatory framework promotes or hinders competition in product markets. By contrast, in OECD countries like Mexico (Kaplan, Piedra and Seira, 2011[2]; Brühn, 2011[3]) and Germany (Rostam-Afschar, 2014[4]), lowering entry barriers has contributed to increase firm creation and employment.
Argentina has embarked on a far-reaching process to reform business regulations and increase competition in domestic markets. In June 2024, the “Bases Law” was approved (Box 4.1), declaring a state of national emergency and delegating legislative power to the executive in administrative, economic, financial and energy matters for a year. The law lays the grounds for reviewing old and outdated regulations, promoting competition, and limiting state intervention. The government has started to implement an ambitious agenda to streamline and eliminate red-tape and lower entry barriers to domestic markets. These and other efforts are already reflected in the OECD-WBG PMR indicators. Comparing the change in the PMR score for each country, between 2018 and now, Argentina is the country that has improved the most (Figure 4.2, Panel B). Impressively, this progress has been achieved in only about six months since the introduction of the “Bases Law”. Some additional reforms since January 2025 have not yet been included in the most recent update of the indicators and would have resulted in an even better score. Scope for further improvement remains, for instance by streamlining regulation and bringing down entry barriers in service sectors at the subnational level, where Argentina is still the country that restricts competition the most among OECD member and accession countries.
Simplification of permit procedures as well as eliminating bureaucratic barriers to production, imports, and exports have been priorities. The Bases Law implemented silence-is-consent rules in administrative procedures, which should help to reduce time to start projects. Several types of procedures and requirements in sectors like agriculture, retail, and health services have been streamlined or eliminated, and technical requirements for industrial products have been dropped (Box 4.1). Additional policy measures taken include the creation of a Marketing, Transparency, and Deregulation Table for grains and meats, the deregulation of the warrant market to foster private sector credit, significant progress in unifying the Single Registry of the Agri-Food Chain (RUCA) and the Argentine Integrated Health Information System (SISA) along with the modernisation of export platforms. Progress is particularly remarkable on administrative and regulatory burden, where strong progress compared to 2018 has positioned Argentina better than most Latin American peers and better than the OECD average (Figure 4.3, Panel A). Further plans include a draft law to abrogate more than 68 outdated, repeated, or impractical laws that impose regulatory burdens.
Note: Product Market Regulation overall indicator (0 = best – 6 = worst).
Source: OECD-WBG Product Market Regulation database.
Pro-competition measures have also been prominent across many activities, including mail and courier services, insurance, and gas and electric charging stations (Box 4.1). In the transport sector the government has deregulated long-distance freight, opened railway routes to competition, concessioned a road crucial for trade, and relaxed restrictions on road transportation between provinces, so that providers in an area do not have to apply for a permit to operate in another. Restrictions on air transportation have also been lowered, and airport services opened to competition. These measures are reflected in a notable improvement in the PMR indicators with respect to barriers to entry in the network sectors (Figure 4.3, Panel B). Rent controls and other price control measures have also been abandoned. These reforms result in more new firms operating in these markets, which can increase service volume and lower prices.
Note: Data reflects laws and regulations that were in force by January 1st, 2025 for Argentina; by January 1st, 2024 for Hungary, the Netherlands, the US, Bulgaria, China, Cyprus, Indonesia Malta and Peru; and by 1st, 2023 in all other countries. Network sectors include energy, transport and e-communications.
Source: OECD-WBG Product Market Regulation database.
Regulatory improvements like the ones recently implemented have strong potential to boost growth and employment (Box 4.2). Reforms already implemented are estimated to lift potential output by 2.7% and employment 0.8% in the coming decades. More ambitious reform in the coming years could take those gains to 6.8% for output and 2.2% for employment. There are several areas of business regulation where Argentina can improve.
Entrepreneurs are still subject to some onerous and time-consuming procedures when starting their businesses. Procedures to notarise statutes for new business must be done in person, whereas in most OECD countries this is not a requirement or can be done online. Starting a business is also subject to taxes and administrative fees, unlike in most OECD countries. Entrepreneurs must also publish a notice of establishment in the online official journal, which is not required in most OECD countries or can be done jointly with other procedures. Recent regulatory changes at the federal level call for regular reviews of licences and permits that are still needed, and require that new licences and permits be proportionate to risks. Sub-national governments could also adopt provisions of this type to support the streamlining of administrative procedures at the federal level.
Barriers to entry persist in a range of professional services (Figure 4.4). There are restrictions imposed by provincial governments for lawyers, notaries, real estate agents, and accountants to practice across provincial borders. Citizenship is required to practice as a notary, non-notaries cannot have ownership-type interest in a notarial firm, and the number of notaries allowed to practice is limited by law, as is the case in other countries. Accountants have exclusive rights to provide audits, and civil engineers to provide topographical services and land surveying. Architecture degrees earned abroad are not recognised unless Argentina has a mutual recognition agreement. Otherwise, architects must undergo a recognition process for their degree. Binding minimum tariffs exist for legal services.
Retail activities still face many restrictions. In the province of Buenos Aires, unlike most OECD countries, only pharmacists can own pharmacies, and there are restrictions on the number of pharmacies that can be established in a given geographic area, depending on the number of inhabitants. Entrepreneurs who want to open establishments selling clothing, or food and beverages, face additional licenses or permits unrelated to health, safety or environmental protection regulations, which is not the norm across the OECD. Despite recent deregulation of prices, price controls remain for taxi rides.
Note: Data reflects laws and regulations that were in force by January 1st, 2025 for Argentina; by January 1st, 2024 for Hungary, the Netherlands, the US, Bulgaria, China, Cyprus, Indonesia Malta and Peru; and by January 1st, 2023 in all other countries.
Source: OECD-WBG Product Market Regulation database.
Governance of state-owned enterprises (SOEs) can be improved. State involvement in the economy is significant (Figure 4.5, panel A), with SOEs operating in many sectors. Since 2024, most commercial SOEs have been converted to public limited companies. This is a welcome step to improve governance (Figure 4.5, panel B). Despite the size of SOEs in Argentina, there is no high-level policy document that clearly states the rationale for state ownership in each of them. Instead, details of ownership rights are dispersed across multiple pieces of legislation. Management and auditing of SOEs can be strengthened. There is no requirement that the board of commercial SOEs includes independent members, which would improve oversight, and active politicians can be part of the board.
Note: Data reflects laws and regulations that were in force by January 1st, 2025 for Argentina; by January 1st, 2024 for Hungary, the Netherlands, the US, Bulgaria, China, Cyprus, Indonesia Malta and Peru; and by January 1st, 2023 in all other countries.
Source: OECD-WBG Product Market Regulation database.
The Bases Law
The law aims to simplify rules with a view towards promoting market-entry and competition, and limit state intervention.
Public sector reform. The law gives powers to the Executive to close or restructure public entities, although there are many exceptions related to science, technology, culture, national parks and food safety. It also opens several public companies to full or partial privatisation, except for the national airline, mail services, and public TV; and broadens the range of works that can be granted as a concession to private operators.
Administrative procedures. The law established principles and requirements for administrative procedures, including speed, simplicity, effectiveness and efficiency in procedures; the right to offer and produce evidence, to be heard, and to a decision within a reasonable time. The Law also established the silence-is-consent principle.
Labour reform. New regulations include the creation of a new, simpler system of registering workers, among other changes (Chapter 2).
New investment regime (RIGI). The regime aims to foster large-scale project development in the energy, mining, oil and gas, steel, infrastructure, forestry, tourism, and technology sectors (Chapter 1).
Energy. The law gives greater freedom to companies in the sector. It enhances the scope for energy exports, eliminates price controls, and reduces caps on exports of liquified natural gas.
Examples of measures to simplify regulation and increase competition taken so far
Since December 2023, the government has implemented a series of measures to lower administrative burdens and increase competition in agriculture, transport and retail.
Implementation of silence-is-consent in administrative procedures.
Streamlining of the Single Registry of Agribusiness (RUCA), including lower requirements and fees and use of virtual inspections.
Elimination of technical regulations in several activities. In industry, compliance with domestic product standards is waived if the product complies with international standards.
Deregulation of long-distance freight and passenger services and opening of railway routes to competition. Concession of a road connecting Argentina with Paraguay, Uruguay and Brazil.
Deregulation of the ramp services in airports, elimination of fixed prices for airport services and of the previous prohibition to park planes overnight at the domestic airport of Buenos Aires.
Streamlining of process for operating air transport services with smaller aircraft, and permission to use foreign crews in local flights.
Streamlining of authorisation for smaller ships, elimination of outdated requirements, and shorter times for transfer of ship property.
Elimination of the Single Registry for Road Transportation (RUTA). Elimination of special document to drive another person's car.
Elimination of tax on the purchase of vehicles, of tariffs on EVs, and of most fees and taxes when transferring property of a vehicle.
Deregulation of gas stations, including size and storage restrictions, and mobile station limitations.
Elimination of red tape to provide electric charging services.
Streamlining of electricity consumption certification in household appliances.
Autonomy of provinces to set their own rules for medicines import, use and sale. Introduction of online sale of medicines. Less requirements to sell painkillers and anti-acids.
Mandatory use of electronic prescriptions and requirement to prescribe drugs rather than specific brands to enhance consumer choice.
Reduction in the maximum delay for credit card operators to process payments to SMEs.
Elimination of price controls measures, including on dairy products and beef.
Elimination of rent controls.
Deregulation of market entry in mail and courier services.
Virtual procedure to request digital signature.
Automatic renewal for credentials of health professionals.
Elimination of requirement of hiring a lawyer to receive retirement pension.
Note: Cut-off date was June 2025.
Source: Government of Argentina.
4.1.2. Enhancing the use of regulatory impact assessments
Regulations often have legitimate goals, like protecting consumers or the environment, and weighing the costs and benefits of regulatory change should be an integral part of reform going forward. For this, it is necessary to evaluate the potential competition impact of new regulation systematically and make regulatory impact assessments (RIAs) a common practice to increase stakeholder engagement.
Regulatory impact assessments allow policy makers to evaluate the potential costs and benefits to society of regulatory proposals to help select the most effective solution that achieves the desired objectives while minimising unintended regulatory and administrative barriers to business entry and innovation (OECD, 2024[5]). The 2012 Recommendation of the OECD Council on Regulatory Policy and Governance urges countries to carry out a Regulatory Impact Assessment (RIA) early into the formulation of new regulatory proposals. The use of RIAs can help to increase policy effectiveness, reduce regulatory uncertainty, and promote transparency and legitimacy, which can increase compliance. This is especially pertinent for small businesses, as for them the financial and administrative costs of complying with new regulations can be more difficult to manage.
Argentina does not yet have a fully-fledged system for the systematic use of regulatory impact assessments. Several components of ex-ante assessments of proposed regulation have been established, but they have not been integrated in a standardised procedure. The National Securities Commission, the National Gas Regulator (ENERGAS), and the National Electricity Regulator (ENRE) regularly conduct a more elaborate technical analysis when developing new regulations, sometimes including a cost-benefit analysis, but the practice is not yet widespread in other sectors (OECD, 2019[6]). The case of Argentina contrasts with that of many OECD countries. In the European Union, RIAs are mandatory for legislative and non-legislative initiatives with important economic, environmental and social effects. In Australia, RIAs are mandatory for all regulation sent to the Cabinet. In Canada, all departments and agencies must conduct RIAs on all regulatory proposals (OECD, 2019[6]). Around 90% of OECD member states require RIAS when new legislation is developed, though some have a threshold below which the requirement does not apply. There is also progress made on this area in Latin America. As of 2022, at least 9 Latin American countries had binding laws, decrees or resolutions that mandate policy makers to conduct RIAs for the development of subordinate regulations, but only Mexico applies them systematically (OECD, 2024[5]). All Latin American OECD members and other accession countries have improved on their practices to assess possible effects of legislation on competition, an area in which Argentina has scope for further progress (Figure 4.7).
The OECD Long-Term Model was used to estimate the effects on potential output and employment of making the regulatory framework more competition-friendly, using as guide the OECD Product Market Regulation (PMR) indicator. This exercise assumes two regulation reform scenarios and compares the potential output and employment trajectories resulting from them with those of a situation where no regulation reform is carried out. The first scenario shows the effects of regulatory reforms already done, that have taken the PMR to its current value in 2025 but includes no further reform. The second scenario assumes further regulatory improvement over the next decade, so that by 2035 Argentina’s PMR matches the first quartile of the distribution of the 2025 PMR scores for OECD countries.
The results already show considerable potential gains in output and employment with the reforms that have been achieved so far. With regulation staying as in 2025, by 2050 output is expected to be 2.7% higher compared with a situation where regulation would have remained as in 2018, while employment is projected be 0.8% higher. Under the more ambitious scenario, with further regulatory reforms, gains in output could increase to 6.8% and in employment to 2.2% compared to the 2018 status quo.
Source: OECD Long-Term Model. (Guillemette and Château, 2023[7]).
Argentina could develop a formal system of regulatory impact assessment to establish the principle that evidence must inform policy decisions, and that it is important to evaluate ex-ante the potential effects of proposed regulations. This will help to ensure that these are efficient and effective, and to minimise unintended consequences. The RIA system could incorporate elements of ex-ante assessments already present in some Argentinian institutions, like legal scrutiny and technical analyses of draft legislation, but also incorporate cost-benefit analyses. To develop the system, Argentina could follow OECD’s best practice principles for RIAs (OECD, 2020[8]). The government could ensure commitment and buy-in for the system, by developing a transparent RIA mechanism as part of a comprehensive regulation improvement plan, securing political and stakeholder support, and entrust oversight to an independent unit. The design and implementation of the RIA system could be integrated with other regulatory management tools, be adapted to the legal and administrative system, assign clear responsibilities, and ensure adequate training for public officials. The RIA methodology needs to be simple, flexible and data-based; and it should identify all relevant direct and indirect costs and benefits, including the impact on competition, on the incentives for businesses to innovate, on employment, on SMEs, on the environment, as well the administrative and compliance costs imposed on businesses and government agencies. Further RIAs should consider multiple policy options, including non-regulatory solutions, to ensure that the chosen one is the most effective, efficient, and proportionate solution to the underlying problem being addressed.
Assessment of regulations impact on competition (0 = best – 6 = worst)
Note: Data reflects laws and regulations that were in force by January 1st, 2025, for Argentina; by January 1st , 2024 for Hungary, the Netherlands, the US, Bulgaria, China, Cyprus, Indonesia Malta and Peru; and by January 1st, 2023 in all other countries.
Source: OECD-WBG Product Market Regulation database.
Formal consultation mechanisms with stakeholders to inform the development of new regulations are also lacking. Argentina is still far from OECD best practices in this regard (Figure 4.8), as there are no requirements for engaging stakeholders when drafting primary laws or subordinate regulations, unless that law increases the price of public services. Several bylaws provide a legal basis for stakeholder engagement, dealing with access to public information from the Executive Power, participative drafting of standards, and open meetings for regulators of public services. A 2017 decree also instructs government agencies to increase citizen participation mechanisms in the rulemaking process and more sophisticated examples of public consultation took place when the subject was expected to be controversial. An online platform for consultation has also been operational. However, the most common way to carry out public consultation has been through ad hoc meetings and public audiences (OECD, 2019[6]).
In 2024, the newly created “Ministry of Deregulation and Transformation of the State” opened the online platform “Reportá tu burocracia” (“Report your red tape”) for citizens and businesses to aid in the identification of burdensome, unnecessary or outdated regulations, which is a step in the right direction. To continue those efforts and following good practice principles, like those in the United Kingdom, the government could adjust the scale of consultation to the potential impact of the proposal, performing consultations when it is still possible to influence regulation, avoiding burdening stakeholders, and providing clear feedback (UK Government, 2018[9]). Regulators and agencies should have the obligation to inform stakeholders which comments will be used to amend the draft regulation, and which ones will be discarded, together with a justification.
Involvement of all stakeholders (0 = best – 6 = worst)
Note: Data reflects laws and regulations that were in force by January 1st, 2025, for Argentina; by January 1st , 2024 for Hungary, the Netherlands, the US, Bulgaria, China, Cyprus, Indonesia Malta and Peru; and by January 1st, 2023 in all other countries.
Source: OECD-WBG Product Market Regulation database.
4.1.3. Improving regulatory coherence across levels of government
Coordinating the design and implementation of regulation across levels of government is crucial to avoid increasing compliance burdens and to ensure the effectiveness of the regulatory system. The 2012 Recommendation of the Council on Regulatory Policy and Governance asks countries to promote regulatory coherence through co-ordination mechanisms across levels of government. Furthermore, it advises countries to identify cross-cutting regulatory issues to promote coherence between regulatory approaches and avoid duplication or conflict of regulations. The Recommendation also urges countries to develop regulatory management capacity at sub-national levels of government.
Argentina is a federal state comprised of 23 provinces and the city of Buenos Aires. Each state is self-governing and holds the powers that are not delegated to the federal government. States are divided into administrative units, called communities in Buenos Aires, and departments and municipalities in the provinces. Each level of government enacts regulations within the scope of its authority, and implementation of federal regulations occurs at the local level. Regulatory improvement must thus consider the competences, resources and capacity of actors at each level of government.
Argentina lacks a consistent strategy to support subnational governments to enhance regulatory quality. Procedures and regulations depend on the sector and location of the firm, with little coordination across levels of government. This can cause gaps in policy design and regulatory overlaps, which are a barrier to investment and entrepreneurship, and can foster corruption. There are no permanent coordination mechanisms to promote regulatory coherence with subnational governments (OECD, 2024[5]). The government’s support to subnational governments rests on ad-hoc and punctual vertical co-ordination mechanisms, like the federal councils where local and national authorities propose regulatory changes on topics dealing with modernisation, energy, environment or health (OECD, 2019[6]). Adhesion to the councils, however, is voluntary for the provinces.
Recent months have seen some progress in this area. Subnational governments are streamlining the delivery of public services, especially through digitalisation. Furthermore, the national government is aiming to reduce regulatory overlaps. For example, in 2024 the National Body for Water and Sanitation Works was closed, as it duplicated supervision also performed at the municipal and provincial level, and a recent decree has allowed provinces to set their own rules for medicines import, use and sale, without the need for authorisation from the national government. Establishing a formal mechanism to coordinate harmonisation and simplification efforts across levels of government can improve regulatory quality (Box 4.3). In 2018, Argentina established the regulatory policy group, bringing together agencies responsible for promoting regulatory quality, which could become the main contact point between federal agencies and subnational governments to seek regulatory coherence. Argentina could also involve subnational administrations through notification mechanisms when proposed regulations are likely to impact subnational governments and foster the exchange of experiences and good practices between agents at all levels of government (OECD, 2022[10]).
Mexico
The National System for Better Regulation aims to harmonise the regulation at the federal, state and municipal levels. The System is formed by:
The National Council on Better Regulation
The National Strategy on Better Regulation
The National Commission on Better Regulation (CONAMER)
The Better Regulation Systems at sub-national levels
The National Observatory on Better Regulation.
The National Council on Better Regulation is responsible for co-ordinating the national policy. It includes the co-ordination with the Better Regulation Unit of every state of the country. Each state has issued a law on better regulation to implement the better regulation policy that the National Strategy mandates.
The National Observatory on Better Regulation is an instance of citizen participation in charge of monitoring and evaluating the performance of the better regulation policy at sub-national level, by assessing policy, institutions and tools.
United Kingdom
The Primary Authority scheme in the United Kingdom is a mechanism to boost regulatory delivery at sub-national level. It is a statutory scheme in which a local authority takes on responsibility for providing advice and guidance to businesses on how they are regulated by local authorities. Primary Authority covers regulation on environmental health, trading standards and fire safety, and is conducted through a partnership between businesses and a chosen local authority.
At the national level, the Office for Product Safety & Standards (OPSS) from the Department for Business, Energy and Industrial Strategy (BEIS) is responsible for Primary Authority and manages the Primary Authority Register.
The scheme provides an effective means to meet business regulations and assess the suitability of business control systems. For regulators, it ensures clarity over where responsibility lies, improves coherence of local regulation, and develops staff expertise via partnerships.
Source: (OECD, 2021[11]). OECD Regulatory Policy Outlook 2021
4.1.4. Improving the insolvency framework
Low entry barriers are key for ensuring vibrant competition in markets, but low exit barriers are equally important to ensure the flow of resources from low-productivity to high-productivity firms. Effective insolvency regimes allow the smooth exit of ailing businesses, freeing capital for more productive and innovative firms, ultimately raising productivity (Adalet McGowan, Andrews and Millot, 2017[12]).
Argentina’s insolvency procedures are in line with the Latin America average, but certain challenges continue to hinder the efficiency of the regime. One issue is that only debtors can file for reorganisation proceedings and out-of-court restructuring agreements, which leaves creditors less protected. Proceeding can take a long time, around 2.4 years versus 1.8 years on average for the OECD (World Bank, 2020[13]), carrying additional costs for parties involved, and prolonging uncertainty for debtors and creditors. This results in often low recovery rates of only 19% compared with 67% on average for the OECD, while the total cost in terms of percent of the estate is 16%, nearly double the OECD average (World Bank, 2020[13]).
Streamlining resolution procedures, for example by setting up specialised bankruptcy courts, can help reduce duration and cost of resolution procedures (OECD, 2017[14]). Evidence suggests that at least some degree of specialisation in expertise of judges and bankruptcy practitioners leads to faster and cheaper procedures (Adalet McGowan and Andrews, 2016[15]).
Argentina has significant scope to improve the institutional design of its competition authority. The 2018 Law for the Defence of Competition (LDC) is the legal framework governing practices that may hamper, limit, restrict or distort fair competition, and block access to free markets. The LDC mandates the creation of the National Agency for Competition Defense (NACD), a decentralised and financially independent agency with wide-ranging national competency. The law also mandates the creation of three bodies under the umbrella of the competition authority: the National Tribunal for the Defence of Competition, the Secretariat of Instruction of Anticompetitive Behaviours, and the Secretariat of Economic Concentrations. The Tribunal has the mandate to issue non-binding opinions on the impact that laws, regulations and other instruments may have on competition in product markets. The two secretariats are charged with investigating anticompetitive conducts and carrying out preliminary analysis on economic concentrations, respectively. However, as of 2025, the NACD and its subsidiary bodies have not yet been created. The national government has only recently regulated the open competitive selection process to select the members of the National Agency for Competition Defense and expects to have a fully functioning NACD in the following months. In the meantime, the instances that issue rulings and resolve all competition cases under the LDC are the National Commission for Competition Defence (CNDC), and the Secretariat of Industry and Commerce (SIC), an arrangement deemed as temporary by the 2018 law. The CNDC is not independent, but a decentralised body under the SIC, and thus not sufficiently insulated from political influence.
Several Latin American countries have already created independent and autonomous competition authorities. The competition authorities of Chile, Brazil and Peru, for example, have stronger legal and operational independence, and do not depend on any other government agency or service. Creating the National Competition Authority should also entail providing it with enough resources to properly carry out its tasks, including staff with skills to deal with cases involving digital markets. The CNDC currently operates with only 2 employees per million inhabitants, compared with 4 per million in the region and 10 per million in the OECD. Moreover, its budget per employee, of around EUR 15 000, is significantly below the OECD average (CNDC, 2024[16]; OECD, 2024[17]).
The rules governing antitrust and cartel activities have seen some progress recently. In 2024, the authorities created a Leniency Programme, to eliminate or reduce fines for natural or legal persons who come clean and admit anticompetitive behaviour before the CNDC. Increasing incentives to self-report could help increase the number of investigations. In Latin America, by 2020 around 47% of cartel investigations began thanks to leniency programmes (World Bank Group, 2021[18]). Incorporating a whistleblowing programme could also help improve cartel detection. Several practices that are common in antitrust jurisprudence such as collective boycotts and sham litigation could also be explicitly described in the law, even if the current lack of an explicit description in the law does not restrain the CNDC to punish these conducts. A collective boycott happens when a group engaged in collective bargaining decides not to provide or purchase goods or professional services from a specific business unless the business agrees to the group's terms and conditions. Sham litigation refers to the use of legal actions to disrupt the operations of a competitor rather than seeking legitimate legal resolution to conflicts.
Market studies can help competition authorities to gauge whether there are competition problems in a sector, that are not related to merger reviews or antitrust investigations. They are conducted by the competition authorities of nearly all OECD countries. The CNDC also carries out market studies, notable recent examples including the beef and liquid fuels markets in 2023. However, professional services sectors should be more prominent among these studies.
Some mergers can harm competition but fall below the threshold for review, especially in digital markets. Several OECD countries, including Belgium, Italy and Ireland, have implemented reforms to allow below-threshold merger investigations. Establishing these powers in Argentina could improve the implementation of the merger control system in transactions that would otherwise go undetected by the authority. Furthermore, a provision in the law stipulating ex-ante evaluation of mergers has been suspended for a year pending the establishment of the National Competition Authority. This delay in implementing the law can hinder the effective application of remedies.
Competition advocacy can go beyond the realm of the competition authority. The competition authority should act in coordination with sectoral regulatory entities, and other institutions may also be useful. For example, Australia’s Productivity Commission has played a crucial role in raising awareness about the merits of pro-competition reform (Productivity Commission, 2023[19]).
Argentina could also take guidance from the OECD's Competition Assessment Toolkit. The toolkit aids governments in removing competition barriers by offering detailed technical guidance for performing competition assessments, including key issues to consider and a step-by-step guide. In the region, the toolkit has been applied to conduct assessments in the ports and civil aviation sectors in Brazil and the medicines and meat sectors in Mexico. Argentina could consider applying the toolkit in sectors where competition is lagging, like professional services.
There are also provincial regulatory distortions that favour public banks. Some provincial public banks have the exclusive right to receive salary deposits for national and provincial government employees, and to handle deposits from the judicial system and the national public administration. Higher geographical reach of public banks might have justified these privileges in the past, but currently this discriminatory treatment of private banks undermines competition in the financial system, hurting consumers. The competition authority recognised this in a recent recommendation urging the revision of two laws that give the Bank of the Province of Buenos Aires (BAPRO) exclusive rights to handle municipal employees' salaries. In 2024, Argentina also eliminated regulatory privileges at the national level favouring the national public airline (Aerolíneas Argentinas), bank (Banco Nación) and energy company (YPF). To enhance competition, and following the national government’s initiative, provincial privileges favouring public enterprises should also be eliminated.
Argentina has remained a fairly closed economy for most of its recent history, which limits its growth potential. Policies to promote industrialisation through import substitution contributed to making the economy significantly less integrated into world markets than emerging economies of similar size, and the sum of its exports and imports represents less than 30% of its GDP (Figure 4.9, Panel A). Imports and exports are more than 40% percent below the estimate from a model that accounts for geographic remoteness and other factors (World Bank Group, 2024[20]). Argentina´s participation in global value chains (GVC) is one of the lowest among the OECD and accession economies (Figure 4.9, Panel B). The share of domestic value added embodied in foreign final demand (forward participation) stems mainly from foodstuffs like soybeans, and chemical products like petroleum and alcohols (World Bank Group, 2024[20]), and remains well below its level at the beginning of the millennium, although it has recovered in recent years. Backward integration is even lower and is stagnant, showing that local exporters make little use of foreign inputs.
Source: Panel A: OECD National Accounts Statistics. Panel B: 2023 OECD Trade in Value Added database.
4.3.1. Reducing import restrictions
Argentina has much to gain from easing access to imports. Domestic firms would be able to obtain higher-quality intermediate goods and more advanced equipment that can foster innovation and productivity gains. Empirical evidence for Argentina points to a robust relationship between the use of imported inputs, productivity, and export propensity (Brambilla, Depetris Chauvin and Porto, 2017[21]). Estimates suggest that a 50% reduction of input tariffs is associated with average increases of 7% in sectoral employment, 5% in production and 7% in value added, besides a 19% increase in exports value added (OECD, 2019[22]). Research also suggests that consumer purchasing power could increase by up to 25% on average under the extreme case of complete removal of all trade barriers, with the poorest segments of the population benefiting the most (OECD, 2019[22]).
There is room for further tariffs reductions
Recent progress in tariff reduction should continue. While tariffs have been reduced consistently in many countries over the last two decades, they have increased in Argentina. In 2022, average tariffs were significantly higher in Argentina than in all Latin American OECD members and all accession countries (Figure 4.10). This was the case not only for consumer goods but also for intermediate and capital goods, thus raising consumer prices but also hurting the competitiveness and productivity of firms and their ability to create jobs. In 2022 Mercosur members approved reducing the common external tariff for the first time since the common tariff scheme’s inception in 1995, but this reduction excluded products in highly protected sectors, like textiles and apparel, footwear, automotive, and dairy products. Mercosur member countries have the right to undertake unilateral changes to common tariffs in about 30% of tariff lines, an avenue which Argentina should continue to use to its full potential.
In 2024, Argentina cut tariffs on more than 90 products, including both consumer and capital goods, as well as inputs like textiles, plastics, machinery, and agrochemicals (Box 4.4). Authorities estimate that these cuts have reduced the average applied tariff by one third. Mercosur is considering expanding the list of exceptions to the common external tariff. Reducing tariffs on intermediate inputs and capital goods should continue to be a priority, especially for those not produced domestically, as the adjustment costs in those cases would be small. The temporary admission regime allows firms to import inputs without paying tariffs provided that the final product is exported. This regime could be expanded to include firms that also produce for the domestic market.
Note: Data are weighted averages of effectively applied tariffs (AHS) across single products in each product class, using import values of each product as weights.
Source: World Integrated Trade Solution database (WITS).
Tariff administration can be further improved. The government recently enhanced the transparency and predictability of tariff administration by formalising the classification procedure for imported goods, which will allow importers to know beforehand what tariffs will be applied. The variation in tariff rates across products, known as tariff dispersion, has increased in Argentina (Figure 4.11). There is evidence that high levels of tariff dispersion are associated with a higher chance of a product being classified in the “red lane” of stricter import checks (Dominguez Prost and Scattolo, 2024[23]), which can cause delays and hamper competitiveness for importers. Cutting remaining high tariffs for products that have lower tariffs under trade agreements like Mercosur can decrease tariff dispersion.
Tariffs standard deviation, all products
Source: World Integrated Trade Solution database (WITS).
Reducing non-tariff trade barriers
Argentina has made considerable progress to reduce the extensive use of non-tariff measures (NTMs) (Box 4.4). In early 2024, the government removed the automatic and non‑automatic import licensing regime, and the SIRA import system. Some requirements in the "red lane" of additional checks have been eased, many types of merchandise no longer must go through it, and some technical requirements have been eased for many products, including food, industrial supplies, and manufactured products. Authorities also relaxed some foreign exchange controls and import restrictions and reduced delays in foreign exchange access, including by passing a one-off tax amnesty that allowed the declaration of previously undeclared FX assets, which increased foreign exchange deposits and rapidly narrowed the foreign exchange gap to single digits by December 2024 (Chapter 1). An assessment of the existing stock of NTM has been initiated to ensure that they are based on the best available technical information, proportionate to their intended goals, and consistent with internationally agreed standards (OECD, 2019[24]), with a view towards eliminating those that do not meet these criteria.
The recent removal of currency restrictions entailed a significantly easier access to the foreign exchange market for importers. Argentina has reduced the time frame for SMEs to access foreign currency to pay for imports. Previously, SMEs could access foreign currency 30 days after the goods arrived at the destination port. Now, they can access it as soon as the purchased product is dispatched at the port of origin.
Non-tariff measures are estimated to add a tariff equivalent of 22 percent to import costs, with higher increases in manufacture, and in agriculture and food (Martínez Licetti et al., 2018[25]). NTMs are a drag on Argentinian importers’ productivity, as in 2019 they dedicated an estimated 166 hours to prepare import documentation requirements, far more than in any OECD member and accession country (Figure 4.12). Even with the considerable recent progress, the time to import remains higher than average OECD countries. Recent research suggests that a firm for which 10% of their inputs are affected by non-automatic import licences reduces their total imports by 18%, which leads to a 5% reduction in that firm’s exports (Bernini, García-Lembergman and Juarez, 2024[26]). NTMs can also lower employment. A 10-percentage-point increase in a firm‘s exposure to non-automatic import licenses is estimated to lead to a 2% fall in employment, to a reduction in hours worked, and to a fall in the probability of a firm remaining active (Bernini, García-Lembergman and Juarez, 2024[26]). Estimates suggest that cutting NTM costs in Argentina can increase household income per worker more than twice as much as tariff reduction (OECD, 2019[24]).
Time to import, documentary compliance, hours, 2019
Source: World Bank, World Development Indicators.
Exports
Elimination of export taxes on beef, pork and dairy products, and a reduction of 25% on other meat products.
Temporary elimination of export taxes on soybeans, corn, sunflower, and wheat until the end of June 2025, and permanent elimination of export taxes on peanuts, sugar, and non-crop agricultural products.
Elimination of quantitative export restrictions on wheat and corn, and of the ban on exports of live cattle.
Elimination of all export requirements for food products, except for those required by the destination country.
Elimination of requirement to provide "reference values" when reporting exports.
Reduction in the amount of guarantees for exports and enabling of new ports and establishments to be used as bonded warehouses for exports.
Imports
Elimination of the 7.5% "País tax" on all imports.
Tariff reductions on more than 90 import lines including appliances, tires, motorcycles and bicycles, herbicides, plastics, polyester, Lycra and several lines of machinery.
Tariff elimination for fertilizers.
Capping antidumping measures to 5 years (3 years initial, possibility of single 2-year extension).
Reform of the Antidumping System to establish mandatory consideration of the public interest by the National Commission for the Defence of Competition and the Under-secretariat for Consumer Protection.
Removal of the automatic and non‑automatic import licensing regime, and of the SIRA import system.
Formalisation of the classification process of imported goods.
Removal from the "red lane" of additional checks and controls of 36% of merchandises subject to it by law.
Elimination of restrictions on importing used capital goods.
Elimination of requirement of having local industry representatives issue opinions to allow entry of "red lane" imports.
Elimination of the foreign exchange information registry for exporters and importers.
Automatic import approval for food products certified in countries with high sanitary standards.
Elimination of authorisation and registry requirements for samples, products, establishments, utensils, and packaging related to a wide range of products.
Streamlining of technical regulations for imports by aligning with international best practices.
Permission to use fiscal depots for merchandise entry checks.
Streamlining of procedures to import veterinary products.
Increase of the number and total allowance of personal duty-free online purchases per year.
Introduction of an advance ruling procedure for queries by importers.
Elimination of pre-declared value for imports.
Source: Government of Argentina.
4.3.2. Improving conditions for increasing exports and GVC participation
Stronger export performance will be key for Argentina to reap new opportunities and put behind recurrent current account imbalances. Currently, the agricultural sector accounts for a large share of exports, but there are also successful exporters and significant potential in other sectors.
One way to strengthen current exports would be to continue the elimination of the explicit export tax, whose revenues come mostly from the highly productive agriculture sector. Export taxes work against the needed outward re-orientation of the economy and can only be justified by the emergency character of the situation. In fact, export taxes have regularly been a significant source of fiscal revenue in times of crises (Chapter 1). These export taxes curb the returns on investment into agricultural production. While this leaves agriculture sufficiently profitable in the core of Argentina’s highly productive agricultural areas, more marginal lands or those that require more investment will export less under the current export tax. Frequent changes in the rates and scope of export taxes have further reduced investment incentives by creating high uncertainty for exporters. For example, since 2020, export tax rates on soy products and other crops have been raised several times with no prior announcement (World Bank Group, 2024[20]).
Research suggests that removing export taxes would increase production and employment (Piñeiro et al., 2019[27]). Plans to reduce and eventually eliminate export taxes have been announced, although so far without a clear timeline. In the context of a broader tax reform that would open less distortive revenue sources, export taxes should be phased out according to a clear timeline (Chapter 1). In 2022, export taxes were already eliminated for services exports, and in 2024, the government temporarily cut or eliminated export taxes on several agricultural products affected by adverse climate events (Chapter 1).
Reducing logistics costs for exporters through better trade facilitation would be another way to strengthen exports. Argentina’s performance was below the OECD average in several areas of trade facilitation in 2022, especially regarding the harmonisation and simplification of trade-related documents, and availability of trade-related regulations and information (Figure 4.13, Panel A). Logistics challenges have become more acute recently, reducing the competitiveness of some of Argentina’s exports (Figure 4.13, Panel B). Recent measures try to address these challenges. The new ExportaSimple 2.0 platform facilitates exports through logistics operators (OLES), which are companies certified by customs authorities to assist SMEs with services like pickup and delivery, and customs procedures. Argentina has also taken steps to reduce bureaucratic barriers affecting production and exports, including measures to simplify procedures and align with international standards (Box 4.4). Recent initiatives include the creation of the Agro-industrial Differentiation Schemes Directory to support compliance with international norms, expansion of the "Argentine Food Seal" to 83 companies complying with quality protocols, and promotion of value-added exports through product traceability and quality certification.
1. Internal border agency co-operation and External border agency co-operation
Source: Panel A: OECD Trade facilitation database. Panel B: World Bank, Logistics Performance Index database.
Argentina also has a Single Window for Foreign Trade (VUCEA) in place, with nodes in 11 provinces catered to regional needs. However, VUCEA works mainly as a portal to centralise information and give access to procedures. Interconnection with customs began only in 2023 and for a few product categories. Other limitations include the fact that institutions exchange documents rather than harmonised data, often relying on scanned paper documents rather than genuine data exchange. Moreover, VUCEA does not allow payments of fees and duties, and several important procedures like customs declarations or phytosanitary certificates are still not integrated (ALADI, 2023[28]). Recent efforts aim at turning VUCEA into a digital trade facilitation tool that centralises all necessary information for import, export, and customs transit procedures. It now offers features such as tariff preference calculators and quota tracking, providing traders with streamlined and transparent access to legal, fiscal, and statistical data for agro-industrial products. Going forward, Argentina should ensure full interoperability between VUCEA, customs and other agencies to cover all relevant export procedures; include payment services for fees and duties; and going fully digital in data exchanges.
Although distortions persist in the agricultural export sector, Argentina has taken significant steps to reduce them. Quantitative export and import restrictions have been eliminated, including a legal commitment not to reapply them. Import licenses for inputs have been removed, tariffs on imports have been lowered, and export duties on dairy and pork products have been eliminated. Export duties on some agricultural products including processed foods, beverages, sugar and rice have also been eliminated (Box 4.4). Temporary reductions have been introduced for key export commodities including soybeans and selected cereals. Complementary efforts include regulatory simplification and trade facilitation across agricultural agencies.
Beyond its current exports with their high concentration in agriculture, Argentina has potential for export diversification. While the traditional exports in which it has long had a comparative advantage are a key asset, it is worth exploring sectors with untapped potential. This would also mitigate the effects of adverse weather shocks or price fluctuations on commodity markets.
Data suggest that Argentina’s comparative advantage is not limited to low-value-added activities. An analysis of revealed comparative advantage (RCA), which measures how much a country exports of a good compared to an average country, points to strong potential in several industries, far beyond those that are intensive in natural resources (OECD, 2019[22]). These industries include chemicals, pharmaceuticals, basic metals, rubber and plastic products and machinery, but also biotechnology, and automobiles. Harnessing some of these opportunities would require bridging skill mismatches and reducing trade barriers, in addition to ensuring future macroeconomic stability (World Bank Group, 2024[20]).
New export opportunities will also arise in the context of the global energy transition. Global lithium demand is projected to rise given the role of lithium in the production of batteries, and Argentina has the third largest reserves of lithium in the world. This confers Argentina strong potential to further develop its lithium industry, including towards higher-value-added products (Chapter 3).
Success in export diversification is usually underpinned by a comprehensive policy mix. Research suggests that policies targeting human capital accumulation, trade openness, and investment can help to diversify the export structure (Swathi and Sridharan, 2022[29]), with reduction in trade barriers being the main driver among commodity exporters (Giri, Quayyum and Yin, 2019[30]). A strategic shift towards trade openness and export orientation, investment in human capital, and dedicated institutions to attract foreign investment are often behind success stories of diversifying exports beyond commodities (Delechat et al., 2024[31]) (Box 4.5).
New bilateral trade agreements could help Argentina and its Mercosur partners open new markets. Trade partner diversification has been found to be associated with higher growth (Önder and Yilmazkuday, 2016[32]), and lower aggregate volatility for high-volatility countries (Ardelean, León-Ledesma and Puzzello, 2024[33]). According to Mercosur rules, bilateral negotiations on free trade agreements are conducted by the bloc and not its individual members. Several free trade agreements negotiated by Mercosur are pending ratification. The free trade agreement with the European Union reached a political agreement in December 2024. Research suggests that the EU-MERCOSUR agreement would increase Argentina’s income, total trade, and output, with the largest expansion occurring in food and agriculture, would raise wages of both skilled and unskilled workers, and would reduce poverty (World Bank Group, 2024[20]). Mercosur has also reached a free trade agreement with Singapore and is in the final stage of negotiations with the European Free Trade Agreement (Iceland, Liechtenstein, Norway, and Switzerland). Rapid progress on the ratification of these treaties would help Argentina seek new export opportunities, and Argentina has undertaken strong efforts to fulfil all formal requirements for this to happen.
Costa Rica
Costa Rica attracted FDI inflows that underpinned its shift from an economy based on agricultural commodity exports to an exporter of higher-value added products like microchips, medical instruments, and knowledge-intensive consulting services. This transformation can be credited to:
Macroeconomic stability, a long-standing commitment to openness to trade and capital flows, a geographic location close to major markets, and strong property rights protections.
Enabling conditions like adequate infrastructure, political stability, universal access to health and education, and a strong commitment with sustainability.
Creating free-trade zones to provide transparent and targeted support to strategic high value-added sectors, to create economic clusters, and enhance value chain linkages and spillovers.
Strong and effective public institutions, like investment and export promotion agencies, help foreign firms to establish and promote linkages with domestic firms.
Periodical evaluation of support policies to adapt them to changing circumstances.
Malaysia
The collapse of global rubber and tin prices in the early 1980s prompted a shift in commodity output, with crude oil, natural gas and palm oil becoming Malaysia’s dominant commodities. Malaysia has pursued a diversification strategy to reduce its vulnerability to future shocks and promote integration into higher value-added activities. The electronics and electrical industry have been the main contributor to Malaysia’s integration into global value chains, producing components such as semiconductors for mobile devices and automotive components, as well as computer parts. This shift was supported by:
Increased participation of the private sector in the economy.
Trade liberalisation and diversification in production, as well as diversification of export markets.
Taxation and incentive policies along with R&D investments to develop manufacturing industries and attract foreign investment.
Creation of free-trade zones to attract foreign manufacturing firms with lower costs.
Investment in its human capital in management, engineering, and other technical fields.
Source: (OECD, 2023[34]), OECD Economic Surveys: Costa Rica; (Koen et al., 2017[35]) Malaysia’s economic success story and challenges; (Blankenship et al., 2024[36]) When do petrostates diversify their exports? Urgency, interests, and policy design in Egypt, Kazakhstan, and Malaysia.
Besides fully-fledged bilateral agreements, Argentina could bilaterally negotiate lower non-tariff barriers with its export destinations, as it has done in the past, and assist firms in getting internationally recognised quality certifications for their products to access more markets (OECD, 2019[22]). Argentina started exporting to around 70 new markets in 2024 and 20 more in early 2025, covering 19 products across 12 destinations. Argentina has also expressed interest in joining the Americas Partnership for Economic Prosperity, an initiative organised by the United States Department of State to establish an enduring forum for regional competitiveness and investment mobilisation.
4.3.3. Attracting foreign direct investment to boost exports
Foreign direct investment has helped many countries become more export-oriented, given the global focus of many multinational enterprises. Argentina receives far less foreign direct investment (FDI) than Latin American OECD countries (Figure 4.14), which stems from several connected factors. Economic and political instability have created planning uncertainty, which has been compounded by a regulatory framework that has often lacked consistency and transparency, with frequent changes in tax policies, tariffs, foreign exchange controls, and export restrictions.
Moreover, FDI inflows are concentrated in highly protected manufacturing activities, like vehicles, food products and chemicals. These FDI flows are mainly oriented to the domestic market, possibly to reap rents derived from high import protection. Technology and knowledge spillovers are usually lower from this type of foreign direct investment compared to efficiency-seeking investments (Barrientos, Gereffi and Rossi, 2012[37]), which limits the positive effects of FDI on domestic productivity and employment.
FDI inward positions, 2023
Notes: Data exclude Special Purpose Entities (SPE).LAC6 is an unweighted average, and the OECD is a weighted average.
Source: OECD database - FDI main aggregates, BMD4.
A natural first step to attract more FDI would be to relax restrictions on it. According to the OECD FDI Restrictiveness Index, Argentina’s regulations towards potential foreign direct investors have been more restrictive than the OECD average (Figure 4.15). Argentina’s restrictions of FDI include foreign equity ceilings, for example in the media sector, and stringent conditions for companies to transfer profits and dividends abroad. In recent months, some FDI restrictions have been eased. Argentina repealed a law that restricted foreign ownership of bodies of water, rural productive lands, and areas along borders, which limited investment in real estate and agriculture. Statutory foreign equity restrictions were also lifted on air transport services, allowing foreign individuals and entities to own and operate domestic air services. OECD research suggests that easing FDI restrictions by about 10% as measured by the OECD FDI Restrictiveness Index could increase bilateral FDI in stocks by 2.1% on average, with stronger effects for the services sector (Mistura and Roulet, 2019[38]). There is also evidence that the complexity of the tax system can significantly inhibit the establishment of FDI between countries, with a 10% reduction in tax complexity being comparable to a one percentage point reduction in effective corporate tax rates (Lawless, 2013[39]). Reducing administrative costs derived from burdensome business regulation has also been shown to increase FDI stocks (Torriti and Ikpe, 2015[40]).
OECD FDI Regulatory Restrictiveness Index, 2023
Source: OECD FDI Regulatory Restrictiveness Index database.
Tax incentives to attract FDI can play a role, but should not be the only policy lever, especially given Argentina’s challenging fiscal situation. Tax incentives should be designed to address externalities and frictions that can hinder investment without imposing significant costs, like diminished tax revenue and inefficient resource allocation (OECD, 2025[41]), and their cost-effectiveness should be regularly assessed. Recent research suggests that tax incentives usually are not the main determinant of location choice because firms first pick locations that satisfy their basic production requirements and then seek incentives (Katitas and Pandya, 2024[42]; Johnson and Toledano, 2022[43]). Multinational enterprises often favour governance reforms, development of local suppliers, investments in domestic hard and soft infrastructure, human capital, and upholding the rule of law, characterised by predictability, transparency, credibility, accountability, and fairness of rules (OECD, 2024[44]). Investment promotion agencies (IPAs) from OECD countries report that the provision and promotion of tax and non-tax investment incentives are the least important elements of their strategies, while measures related to image-building, investment facilitation and investment generation play a more central role (OECD, 2024[44]).
Argentina has made progress on several of the dimensions mentioned above. Besides regulatory improvements (section 4.1), recent efforts to attract foreign investment include the Incentive Regime for Large Investments (RIGI), introduced in 2024, which assures a 30-year period without changes to a series of tax and customs benefits, which is expected to improve regulatory stability and legal certainty.
Intellectual property rights should be strengthened to enhance the country’s attractiveness to FDI. Argentina ranks 102 out of 125 countries in the intellectual property component of the International Property Rights Index (Property Rights Alliance, 2024[45]), and has not yet ratified several crucial intellectual property agreements, like the Patent Cooperation Treaty (PCT). Discussions on the PCT are ongoing in Congress and are expected to be concluded with a view towards ratification.
Additional measures aimed at helping foreign companies navigate the regulatory framework could increase investment flows further. The Argentine Agency for Investment and Trade assists foreign investors by providing market insights, streamlining processes, and identifying investment opportunities across the country. Specialised administrative assistance and services, used in many OECD countries, can also facilitate investment for companies that need to engage with several public entities (OECD, 2024[44]). Such assistance can be especially helpful for smaller foreign companies that will not meet conditions to enter RIGI. For example, the Invest Japan Hotline offers consultations on the administrative procedures needed for FDI into Japan, arranges meetings with officials of regulatory agencies, provides in-person logistic assistance during visits, and relays suggestions for reforms to the Japanese government.
In addition to creating rules and incentives, the public sector also creates public goods and services that can improve the productivity of enterprises such as infrastructure, education or the enforcement of law and order including property rights. At the same time, the public sector can hinder productivity if these public services are not of adequate quality or if institutions absorb too much private resources for taxes and regulations compliance or owing to weak economic governance and corruption.
4.4.1. Improving infrastructure to reduce logistics costs
Good infrastructure can reduce the costs of sourcing, producing and selling goods and services and has hence a direct bearing on productivity. Addressing Argentina’s significant transport infrastructure gaps would have significant potential to bolster productivity. The quality of infrastructure is low in many respects and the disparity between the current state of infrastructure and the level required to support optimal economic growth is one of the largest in the region (Figure 4.16). In the transportation sector, only 32% of road infrastructure is in good condition (Ministry of Public Works, 2021[46]), and in the Central region only 44% of freight railway infrastructure is in good shape (Federal Investment Council, 2023[47]). The poor state of freight railway infrastructure has been flagged as the main cause of train derailments (Government of Argentina, 2024[48]). Furthermore, the port of Buenos Aires, which handles around 85% of the nation’s containers, has an average ship-turnaround time close to two days, while for other ports in the region it is below one day. Ships often face waiting times before entering the port (Merk, 2018[49]).
The government is aiming to significantly increase private participation in construction and operation of infrastructure. The Bases Law has broadened the scope for concessions to include public works (e.g. buildings and roads), assets that support an activity or service (e.g. electricity lines or oil pipelines) and public services, allowing its construction, conservation or operation. The government has already begun the tendering process for a strategic route that connects the country with Brazil and Uruguay (Corredor Vial 18).
Going forward, Argentina could follow the guidelines for efficient and effective procurement of infrastructure projects outlined in the Recommendation of the OECD Council on the Governance of Infrastructure. This entails, among other practices, using transparent and competitive processes that limit the use of exceptions and single sourcing, selecting contractors based on qualitative and financial criteria, evaluating available delivery modes against clear criteria, and designing a robust and transparent process for contract re-negotiations and dispute resolution to account for evolving conditions. The latter might include setting up an independent board like Chile’s Technical Panel for Concessions. The OECD also developed the Support Tool for Effective Procurement Strategies (STEPS) to inform procurement decisions on major projects. STEPS can advance the efficiency and effectiveness of public procurement of infrastructure, for example, by improving the Value for Money propositions of both traditional and privately financed infrastructure projects. It is also an effective tool against bid rigging, the effects of abnormally low bids, and corruption in public procurement.
Public-private partnerships (PPPs) can also help deliver infrastructure investment. Getting value for money out of PPPs and managing them effectively requires significant institutional capacities, including to weigh their benefits against traditional procurement and to assess potential long-term fiscal implications (Chapter 1). The OECD has developed twelve guiding principles to ensure that PPPs can maximise the benefits of private sector participation. These include building a sound regulatory framework supported by competent and well-resourced institutions, ensuring sufficient competition through auctions, and strengthening the integrity of the procurement process to minimise fiscal risks. Brazil has successfully overhauled its regulatory framework for concessions and PPPs, and this experience could provide valuable insights. A special secretariat tasked with centralising, selecting, and prioritising infrastructure projects, as well as monitoring their development, has been created. This has helped for prioritisation, making sure that selected projects respond to long-term strategic goals and are adequately prepared before reaching the bidding stage (OECD, 2023[50]).
Source: Panel A: World Economic Forum, Global Competitiveness Index 4.0. Panel B: Global Infrastructure Hub (GI Hub)
4.4.2. Fostering digitalisation through better digital infrastructure and skills
Digitalisation is key for raising firm productivity, as it facilitates the incorporation of new technologies into business processes, resulting in more flexibility and efficiency, that can lead to improvement of existing products and services or the creation of new ones. Although Argentina has many tech start-ups and digital talent, especially in cities like Buenos Aires, Córdoba and Mendoza, half of Argentinian manufacturing companies have a low degree of digitalisation, and adoption of emerging technologies is lagging in some areas. While the use of the Internet of Things (IoT) by Argentine manufacturing is on par with OECD member countries, cloud computing use is well below regional peers and the OECD average, while barely any manufacturing firms use Artificial Intelligence. Only 40% of manufacturing firms used e-commerce as part of their business strategy in 2021, and for most of those firms, online orders account for less than 10% of sales or purchases (Secretaría de Innovación, Ciencia y Tecnología, 2024[51]).
Broadband connectivity is a particularly relevant aspect of infrastructure that enables the digital transformation. Argentina ranks among the last countries in the OECD in the technology access dimension of the Network Readiness Index, which considers device and service prices, broadband coverage, and international bandwidth (Portulans Institute, 2024[52]). Fixed broadband subscriptions, at 25 per 100 people, are low compared to the OECD average of 36 per 100 people. The number of secure Internet servers per million people are also well below the OECD mean. Increasing access to communications infrastructures and services, like fibre optic networks, towers or spectrum, is essential. To spur private sector investment in networks, policy makers should address barriers to investment and enhance competition.
Administrative barriers to digital infrastructure deployment are frequent, often due to a lack of homogeneity in requirements between municipalities. The average time to secure a permit for a site is one year, and more than 90% of the country's municipalities do not have ordinances that regulate the installation of telecommunications infrastructure (Cabello, Ros Rooney and Fernández, 2023[53]), or in many instances directly prohibit it depending on location and size, or out of safety concerns. Several municipalities, including the city of Ushuaia, have banned deployment of 5G equipment out of health concerns.
The process of granting of permits, authorisations and rights of way could become more transparent and agile, including by improving the coordination between competent bodies while ensuring adequate coordination at the national level. Setting up one-stop shops could help in this regard. The number of administrative procedures could be subjected to a review and simplified, eliminating those that are unnecessary. “Zero-based” approaches, i.e. rethinking regulation from scratch as opposed to accumulating fixes to preexisting regulation, can help separate unnecessary restrictions from adequate requirements for operation.
Increasing the amount of radioelectric spectrum available is also vital to enable expansion of digital networks. Flexible, efficient, transparent and competitive spectrum allocation mechanisms should be defined in which any interested party can participate on equal terms. Harmonisation of the spectrum at the international level will help to guarantee coexistence and compatibility between services.
Progress has been made to foster competition and attract investment in the ICT sector. In 2024 the government eliminated price caps set during the pandemic in telephone and internet services, and cable television, now allowing firms to set prices freely. Restriction on imports have also been lowered (section 4.3), making it easier to bring inputs needed for the deployment of infrastructure.
Digitalisation can also be hampered by a lack of appropriate skills in the workforce. Argentina needs to improve the foundational skills of its students and ensure that the education they receive is in tune with technological advances and business sector needs. Shortages in cognitive and digital skills are much higher than in the OECD, while the share of ICT graduates in tertiary education is very low and has been falling over the last two decades (Figure 4.17). Three out of four employers face difficulty finding the workers they need, with especially acute shortages in IT and technology (Manpower Group, 2022[54]). Increasing collaboration with the private sector to keep VET and university curricula aligned with labour market needs, assessing the relevance of the VET and university curriculum, and strengthening lifelong learning can reduce skill shortages (Chapter 2).
Note: In Panel A, data is from 2022 except for Costa Rica, Philippines, Thailand and Malaysia (2023); Colombia (2021); Indonesia (2018); Peru (2017); and Vietnam (2016).
Source: UNESCO UIS database, OECD Skills for Jobs database.
Argentina has made progress in advancing regulation to establish ethical safeguards for the use of Artificial Intelligence (AI). Adoption of AI technology can raise productivity, especially for labour (Filippucci, Gal and Schief, 2024[55]), which can enhance the ability of firms to innovate. Responsible AI should promote innovation while remaining trustworthy and respectful of human rights and democratic values. The National Artificial Intelligence Plan aims at fostering AI development in line with ethical and legal principles. It addresses several OECD AI core principles, among them inclusive growth, human-centred values and fairness, investment in AI, and building human capacity and preparing for labour market transition (OECD AI Policy Observatory, 2024[56]). The plan aims to issue guidelines for the development of AI, along with the creation of a National Observatory in AI to audit public policies and tools using AI, and an AI Ethics Committee as an advisory body.
4.4.3. Improving the efficiency of the judiciary services
Perceptions about the performance of the Argentinian justice system lag those in OECD countries and several Latin American peers. Trust in the judiciary system is low, both among firms and citizens (Figure 4.18, Panels A and B). In fact, almost two thirds of citizens manifest having low or no confidence in the judicial system. Lack of trust in the legal system could also be related to high perceptions of corruption (see section 4.4.4). Other metrics related more directly to the efficiency of court proceedings, such as perceptions on processing speed and enforcement, are also lagging in international comparison (Figure 4.18, Panels C and D).
Low judiciary efficiency has costs in terms of employment, productivity and growth. Judicial efficiency affects contract enforcement and the respect of property rights, which encourages investment and innovation. Inefficiencies in the operation of judicial systems, measured as long court proceedings, many accumulated unresolved cases, a high burden of pending cases or inflow of new cases, have been found to hamper economic growth (Kapopoulos and Rizos, 2024[57]). Jurisdictions with longer trials have been found to have less job creation and lower labour productivity, especially in sectors where flexibility is needed (Gianfreda and Vallanti, 2017[58]) (Chemin, 2020[59]). Time and cost inefficiencies in the enforcement of contracts through the judiciary system have also been found to have a negative effect on financial markets’ development (Zhang, 2024[60]).
Note: Panel A reflects the perceptions of business leaders, whereas Panel B is based on interviews with citizens by Latinobarómetro.
Source: Panel A: Economist Intelligence Unit, Business Environment Indicators; Panel B: Latinobarómetro; Panel C&D: World Justice Project, Rule of Law Index
Digitalisation offers opportunities for increasing efficiency in court proceedings, like in other areas of the public administration. The use of digital case files, documents, signatures, and communications has been allowed in judiciary proceedings since 2011, and digital case management systems are now in place in the judiciaries of all provinces and the Supreme Court. These systems generate data which could be used to further increase efficiency, for example by reviewing processes to eliminate tasks that do not add value and by developing management indicators from cases data to measure progress and identify bottlenecks (AmCham Argentina et al., 2021[61]). Incorporating artificial intelligence (AI) techniques could also accelerate proceedings, for example by assisting on drafting of sentences and search of legal sources, providing basic legal information to the public in an automated way, or analysing judiciary performance (AmCham Argentina et al., 2021[61]). The government has recently announced a National Comprehensive Program for Artificial Intelligence in the Judiciary, which has already carried out pilots to test the use of AI in common tasks. Developing a strategic vision for the responsible and trustworthy use of AI justice system, following the OECD AI Principles, could be considered. Continuous investments in digital infrastructure and capacity building to enhance digital skills of judicial staff would also help.
Digitalisation can also support the efficiency of internal administrative processes in the Judiciary. For example, the Judicial Council (Consejo de la Magistratura) of the city of Buenos Aires is using an e-procurement platform. The experience is being analysed by the OECD in an E-procurement Review that will benchmark this progress against OECD best practices and provide recommendations to get closer to them.
Alternative dispute resolution schemes can lower workloads in courts and avoid lengthy proceedings in labour and commercial disputes, reducing costs for workers and firms. Compulsory labour dispute settlement systems, like those that operate in the city of Buenos Aires and the province of Mendoza, are good examples. The Office for Labour Conciliation in Mendoza reached agreements in 56% of cases brought to it in 2024. The Office offers free advice to workers lodging claims and sets a deadline for resolution of 60 days. Following this positive experience, the Mendoza government is planning to introduce a civil dispute settlement office for commercial and property disputes in 2025. Other provinces could consider introducing similar schemes to lighten court caseloads.
Online dispute resolution (ODR) is another potential avenue to make justice systems more accessible, affordable, flexible and people-centred, by using digitalisation and data to support dispute settlement in and out of the courtroom. Argentina has advanced in establishing online mediation services, like the MEL system in the province of Buenos Aires, which deals with conflicts on e-commerce, consumption or property issues. As a first step towards implementing or improving online dispute resolution facilities, a thorough review of the current legal and institutional setup could help to spot any limitations or opportunities in procedural rules (OECD, 2024[62]).
4.4.4. Ensuring integrity in business and government
Corruption distorts competition by creating an unfair advantage for firms that engage in illicit practices and increases the cost of doing business by imposing additional burdens to secure contracts or permits. Moreover, it reduces the quality and availability of public services, misdirects public funds, and disrupts the allocation of resources. Corruption also weakens the government's capacity and lowers trust in public institutions (Olken and Pande, 2012[63]). Evidence for developing countries also suggest that corruption can hamper access to finance for SMEs (Amin and Motta, 2021[64]).
Perceptions of corruption in Argentina remain high in international comparison and have not improved significantly over the last three decades (Figure 4.19, Panels A, B and C). Only 28% of Argentinians consider that the country has made at least some progress in reducing corruption, compared with 37% for Latin America, and 30% report having known about acts of corruptions in the last 12 months (Latinobarómetro, 2024[65]). In Argentina, the cost of corruption due to bribes has been estimated at 0.8% of GDP per year (Grandes and Coremberg, 2020[66]).
Argentina’s Anticorruption Office (“Oficina Anticorrupción”, OA) was established in 1999, and has been instrumental in strengthening procedures to prevent and manage conflicts of interests in the government. The regulatory framework on integrity comprises several laws and secondary legislation, including the Corporate Liability Law and its guidelines, to address corruption in the corporate sector; the National Public Employment Framework, the Public Ethic Law, and the Code of Ethics, regulating integrity in the public sector. Regulatory safeguards to prevent corruption are on par with OECD countries in several areas (Figure 4.19, Panel D).
The strategic framework for fighting corruption was enhanced in 2023, with the publication of the National Integrity Strategy. The Strategy aims at coordinating integrity and transparency policies across government institutions. The Strategy is a comprehensive strategic approach to prevent and combat corruption based on international best practices. This strategy was developed following OECD recommendations through a collaborative effort involving government bodies, international organisations, and the civil society (Boletín Oficial, 2023[67]). Argentina is also an adherent of the OECD Anti-Bribery Convention since 2001.
Legislation concerning integrity in the public sector remains fragmented. A draft bill has been put forward by the Anticorruption Office to reform the Public Ethics Law, which included many of the recommendations made in the OECD Integrity Review of Argentina (OECD, 2019[68]) and would partly address the fragmentation of the legislation on integrity, but it has not yet been approved. The Public Ethics Law should be updated as proposed.
The Anticorruption Office has made efforts to raise awareness of conflicts of interest among public servants and is making progress in providing more practical guidance. In 2024, the Office redesigned eight core courses to meet the needs of different audiences, launched targeted in-person sessions for senior officials in several public institutions, and developed a comprehensive training programme on public ethics to enhance practical application of integrity standards. Qualification and performance criteria have been developed for all positions in the public sector, and in 2024, compulsory competence tests were introduced for jobs in the public administration and state-owned enterprises, eliminating hereditary privileges in public jobs. The Office issues binding instructions through its notes, reports, and resolutions, which may result in disciplinary proceedings or the annulment of actions involving conflicts of interest.
Whistleblowers can help uncover information that could lead to the prevention or investigation of corruption. There are already legal protections for whistleblowers in the public sector. The Corporate Criminal Liability Law addresses corruption in the private sector, encouraging companies to establish mechanisms for reporting misconduct, especially for those involved in public procurement or contracts with the government. However, the law should be amended to explicitly establish protections for whistleblowers in the private sector, which are not currently in place.
The Auditor General (“Auditoría General de la Nación”, AGN), which oversees the external control of the national public administration, is an autonomous body that assists the National Congress. However, the AGN is the only supreme audit institution in Latin America that does not have its own specific law (OECD, 2021[69]). To strengthen the autonomy of AGN, Argentina should issue a law that establishes its mandate, powers and independence.
SMEs face similar corruption risks as large companies, but perceptions about the need to establish anti-corruption measures are often less developed, therefore failing to develop basic compliance structures (OECD, 2022[70]). Those that do recognise the risks struggle with insufficient resources to implement effective programmes. Raising awareness among SMEs of corruption risks and anti-corruption practices is thus essential, but it is often difficult. The OECD has issued a toolkit with recommendations to guide countries in reaching out to SMEs (OECD, 2022[70]). The Anticorruption Office has implemented the Integrity and Transparency Registry for Companies and Entities (RITE), a free and voluntary online platform to complement integrity programs. The platform includes a toolbox with reference materials and a self-assessment simulator to help entities evaluate the maturity level of their integrity programs. New exporters could be given anti-corruption guidance, both at home and abroad, like Brazil does with its Micro and Small Business Support Service’s Integrity guide.
Lobbying helps to identify potential impacts of policies on specific groups, but it should be transparent and regulated to avoid undue influence on government decisions or public opinion. Although there is a registry of meetings between interest representatives and public officials, Argentina could establish a public registry for lobbyists to make regulation design more transparent and fairer, like many OECD countries do. Governments should oversee compliance with lobby regulation and impose sanctions when there are breaches. Argentina lacks an explicit overarching definition of lobbying activities within its regulatory framework, making it challenging to prevent groups from exerting undue influence. The 2003 Decree on Lobbying does not carry legal value and applies only to the executive branch. Furthermore, there is no centralised body tasked with overseeing the transparency of lobbying activities, nor have any investigations into lobbying being carried out in 2023 (OECD, 2024[71]). Incorporating an explicit definition of lobbying activities into the regulatory framework is a crucial first step to improve compliance and reduce risks of undue influence.
1.Transparency of public information.
Note: Panel B shows the point estimate and the margin of error. Control of corruption captures perceptions of the extent to which public power is exercised for private gains. Panel C: PEERS is an average of Colombia, Costa Rica, Mexico, Argentina, Brazil, and Peru. Panel D: Measured against OECD standards, each value shows the percentage of criteria that are fulfilled. A higher score is therefore interpreted as being closer to best practices and standards.
Source: Panel A: Transparency International; Panels B & C: World Bank, Worldwide Governance Indicators; Panel D: OECD Public Integrity Indicators Database
.
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