Few governments have inherited a more daunting economic mess than the one that greeted Argentina’s new president, Mauricio Macri, a year ago. The scale of mismanagement and flat-out corruption under the previous government of Peronist president Cristina Fernandez de Kirchner (and before that, her husband, Nestor Kirchner) forced Macri to initiate a series of austerity measures, along with a host of initiatives designed to reduce efficiency-crippling market distortions.

Macri is attempting a clean break from the recent past — an aspiration often asserted by Argentina’s elected leaders but rarely followed by tangible acts. He’s gambling that by instituting productivity-enhancing reforms and curbing ad hoc populist policymaking to buy off one interest group or another, he can return the economy to a path of sustainable growth without losing a plurality of voters.

As Macri is discovering, though, focusing on longer-term goals in a society obsessed with the short-term is politically problematic. Argentinians accustomed to quickly engineered “economic miracles” are becoming restive, as the rapid return to growth that followed past economic collapses has failed to materialize. Indeed, the recession (which, to be fair, began on Pres. Cristina Kirchner’s watch) has taken quite a toll. The only indicator that is going up is the poverty rate, which rose from around 16 percent at the end of 2015 to 35 percent by the second quarter of 2016.

Perhaps not surprisingly, Macri’s popularity ratings, while still above 50 percent, have fallen by 10 percentage points since he took office. In fact, the real surprise is that Argentinians are giving him the (temporary) benefit of a doubt. Unfortunately, there are no sustainable painless fixes for Argentina’s economy, as the booms and busts of the past few decades demonstrate.

Roller Coaster

Reacting to the sharp 1988-90 economic downturn, then-president Carlos Menem shifted from oft-tried-and-failed populist Peronism to neo-liberal economic policymaking. Menem’s 180-degree turn (well, 120 degrees, anyway) included a commitment to free markets and to mass privatizations. The most radical change: the establishment of what’s called a “currency board” with strict rules on exchange convertibility — in essence, a self-regulating monetary policy designed to stop inflation dead in its tracks. And it worked, at least for a while. From 1991 to 1998, the Argentine economy grew at an impressive 6.3 percent annually.

Then the Argentine roller coaster headed downhill. Government insolvency, driven largely by widespread evasion of taxes, combined with profligate borrowing by provincial governors, resulted in an overvalued exchange rate and large-scale withdrawal of foreign investment. In the following three years (1999-2002), Argentina’s economy contracted by almost 5 percent annually.

What goes down, must come up — in Argentina, anyway. The next miracle economy, this one under the aegis of Nestor and Cristina Kirchner, enjoyed six-plus-percent growth from 2003 to 2011 thanks in part to booming global commodity prices. In sharp contrast to the policies of the later years of Menem, the Kirchners’ familiar Peronist catechism dictated default on much of the external, dollar-denominated debt, along with extensive price and foreign exchange controls, and loose monetary and fiscal policy.

The goal was to cement political power by nurturing key constituencies, generating surpluses in the external and fiscal accounts that were channeled into popular subsidies. The subsequent economic bust was more or less inevitable — nobody can successfully manage such price manipulation for long without a police state to back them up. But this time the hangover was less traumatic than usual — the economy basically treaded water from 2012 through 2015.

The election of Macri in December 2015 heralded a shift to pro-market policies, a return to international capital markets, and an aggressive effort to tighten integration with the global economy. The Macri economic model was crafted to take Argentina off the roller coaster. While a major retrenchment of state spending from the Kirchner years was the only sustainable choice, Macri seems determined to protect living standards of those at the bottom and middle by easing the transition to prices dictated by supply and demand.

The Business Cycle, Argentine Style

The short-term focus of Menem and the Kirchners produced a predictable pattern of productivity change. After growing at a tepid rate of 1.1 percent from 1988 to 1990, total factor productivity (TFP) expanded at a spectacular average rate of 5.3 percent during the Menem boom years of 1991-98 and then declined at an average annual rate of 4.5 percent during the bust years of 1999-2002. The somewhat more sedate Kirchner boom-bust saw total factor productivity expand at a very respectable rate of 3 percent per annum from 2003 to 2011, only to decline at a rate of 0.8 percent from 2011 to 2015.

These patterns suggest that the Menem and Kirchner booms were largely the result of the economy expanding during periods of excess capacity left by the previous bust. Once the economy approached full employment, the existing policy mix was incapable of sustaining productivity increases, so diminishing returns to stimulus quickly set in. The Cristina Kirchner bust (2012-15) was further exacerbated by default on foreign debt, together with a major deterioration in governance, especially in the areas of government effectiveness, rule of law, regulatory quality and corruption.

When Cristina Kirchner left office in 2015, Argentina faced exclusion from international capital markets pending an agreement with the owners of bonds dating back a decade or more, who were holding out for a better settlement. Macri also inherited a worsening trade deficit, not to mention a tangle of foreign exchange and capital controls and a near doubling of public expenditures on wages and subsidies since the early 2000s.

As of September 2016, the Macri administration has come to terms with bond holdouts, thus regaining Argentine access to international capital markets. Exchange rates have been unified, reducing inefficient incentives in trade and drastically paring the opportunities for corruption. Realistic budgetary targets have been set, helping to restore investor confidence. Energy subsidies have been reduced. (While Argentina’s Supreme Court recently ruled against the price increases that inevitable followed, they eventually will go through.) And the administration has put in place a plan to make the public sector more transparent and accountable.

Patience Is the Scarcest Resource

It will take several years for the benefits of Macri’s economic strategy to be realized — provided he’s given the time. Unfortunately, living standards are eroding under the combined effects of lower governmental spending, a post-devaluation inflationary spike, cuts in energy and transportation subsidies and tightening monetary policy. This will make sustaining popular support difficult, a reality reinforced by Macri’s lack of a Congressional majority to make course corrections as needed. As a result, Macri’s government will not be rolling back many of Cristina Kirchner’s social welfare reforms, but looking instead for more efficient ways of continuing them.

The other key to Macri’s prospects (along with voter patience) is the response of foreign investors to Macri’s welcome mat. After being burned repeatedly in the past, foreign investors will demand evidence of property rights stability as well as control of inflation, which remains an ever-present threat.

Why, then, are many analysts (cautiously) optimistic that Macri can put Argentina on a stable growth path? In part, because Argentina possesses so many of the building blocks of economic success — abundant resources, a skilled labor force and a large middle class that yearns to join the club of affluent nations. Indeed, Argentina’s failure to live up to its promise for the past century-and-a-half is one of the great puzzles of development.

Arguably, the best thing about Macri is that he has refused to succumb to the pressures from an immature political culture to promise what he can’t deliver. The test now is whether Macri can inspire the will to act responsibly — and ironically, just when Europe and the United States seem to be heading into a period of collective parochialism and paranoia.