Page 5 THE ARGENTINE T'ELECOMMUNICATIONS SECTFOR limited incentive to nationalize and unify the federdl and provincial party organizations. In addition, the staggering of elections means that the composition of any coalition will be constantly changing. A national election irvolving half the seats in the lower house occurs every other year, whlile every third year one third of the seats in the Senate are at stake.

As a result, in addition to a diversity of parties, there are significant divisions within parties. Today in Argentina, the two largest parties are the Radicals and the Peronists. While the Radicals generally represent the middle class, there are both moderate and extreme factions wNthin the party and in various periods there have been more than one Radical party. Th same is true for the Peronists, whose base is the urban, unionized working class. The Peronists have been represented by more than one party and the party has been segmented into moderate and extreme factions. In the recent Argentine clections the effective number of parties has been over three.' However, none of these parties cut across regional and class divisions.

The destructive pattern of politics described above began to change after the restoration of democracy and the elections in 1983. The election resulted in a Jivided govemment; the Radical party controlled the presidency and the Chamber of Deputies, but the Peroni"t party controlled the Senate. This resulted in a stalemate, where the discretion of the president was seve.rely limited by the Peronists in the Senate. As result, the Radicals were unable to pursue their own interests at the expense of the Peronists. This deadlock ended **ihe** "beggar-thy-neighbor" behavior, but it did not result in any cooperative behavior that might have allowed Argentina to improve its economic performance. The economic situation continued to decline, threatening the viability of democratic government. Army rebellions confronted President Alfonsin in April of 1987 and December of 1988.

This stalemate ended with the elections of 1989 in which the Peronists won control of the Presidency and both houses of Congress. However, rather than returning to the historical pattern of "beggar-thy-neighbor" policies, the Peronists embarked on a program of economic reform. This change seems to have been made possible by a conjunction of events. T he Argentine constitution provides for a long transition period between the elections in May and the swearing in of a new government in December, Laving the departing presid.it as a "lame-duck". During this period in 1989 the economy deteriorated rapidly. Hlyperinflation manifested itself for the first time in Argentine history, raising fears over the viability of the economic and political system.<sup>8</sup> Faced with the possibility of a return to military rule, the Radical party concluded an agreement with the incoming Peronists. President Menem took office in July. five mnonths ahead of ' Matthew Soberg Shugart and John M. Carey, Presidents and Assemblies: Constitutional Design and Electoral Dynamics, (Cambridge: Cambridge Universitv Press, 1992), 220. The effective number of parties is a number constructed to represent the number of parties that have a chance at competing for election. This is similar to constructing the effective number of new entrants **in** a market. There may be many potential entrants, while none are actually observed (or there may be many observed, but none are competitive).

8 While Argentina had frequently suffered from high inflation the acceleration il the rate of increase in consumer prices from 343 % in 1988 to 3079 % in 1989 was unprecedented. (Source: IMF International Financial Statistics.)