Aglietta’s legacy for Latin America: sovereign money as an institutional precondition for development

Abstract

Latin American economic thought has produced influential explanations of structural heterogeneity, external constraint, and uneven development. However, across its major traditions, money has often been treated as a secondary or accommodating variable rather than as a constitutive institution shaping expectations, asset hierarchies, and political legitimacy. This article argues that Michel Aglietta’s principal contribution to Latin American economic thought lies in addressing this analytical gap. The article draws on Aglietta´s regulationist theory of money and shows how it provides a comprehensive framework for reinterpreting recurrent monetary crises in the region. By conceptualizing money as a social institution that stabilizes debt relations and anchors expectations through political legitimacy and trust, this approach allows for a reinterpretation of capital outflows, currency substitution, and weak domestic reinvestment as manifestations of contested monetary legitimacy. The article further mobilizes this framework to reinterpret the adoption and collapse of Argentina’s Convertibility regime beyond the traditional Optimal Currency Areas approach, highlighting sovereign money as an institutional precondition for development in Latin America.