According to the Argentinean National Environmental Agenda ( Bases para una agencia ambiental nacional 2005: 6) ^[1] the macroeconomic policies of the 1990s ^[2] gave the private sector a very strong allocating power. As a consequence, the presence of the government in some basic environmental related sectors like water, sanitation or waste management was drastically reduced. Whenever the investments on these sectors were not profitable for the private parties involved, the environmental quality of the services diminished considerably.

Providing water, sanitation and waste management can be seen as achieving functions of the Argentinean state that were almost entirely given away. Intervening when private investors in charge of the provision of these environmental services are not able to do this satisfactorily is an arbitrating function that the Argentinean state was not able to fulfill.

The financial crash of 2002 questioned the legitimacy, efficiency, transparency and integrity of the whole Argentinean political system. The elected government in 2003 is working on regaining allocating power for the state in all its dimensions. The environmental policy consequences of this political decision can be read in the Environmental National Agenda. The first of the five environmental goals established here is to get the functions of the state back by giving the state the capacity to regulate and mitigate the problems (market failures) that market forces bring about ( Bases para una agencia ambiental nacional 2005: 7).