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Volume 65 / Social Sciences

POLITICAL ECONOMY: MEXICO


PAMELA K. STARR, Senior Fellow in Public Diplomacy and Senior Lecturer in Internationl Relations, University of Southern California

THE LITERATURE ON MEXICAN POLITICAL ECONOMY has undergone a gradual shift in recent years away from the process of economic reform and toward the economic performance of the reforms. While some analysts continue to focus their research on explaining the particular design and implementation of Mexico's economic reforms, the bulk of research attention is now focused on a more immediate policy problem—why these reforms have not fulfilled their economic promise. This expanding body of research aims to identify the forces that have undermined market efficiency and effective economic policy-making in Mexico and how these obstacles to growth and development might be overcome. This new wave of research has thus begun to focus carefully on microeconomic activity in Mexico and the operation of the country's distinct regional economies. It has also fostered some outstanding research projects carried out by analysts working in regional universities whose work has often been overlooked and underappreciated.

Looking first at new research on the politics of economic reform, two works stand out for their high-quality attention to the role of individuals in the policy process. During the past two decades, a rich body of research has been developed to explain the central role of economic structure and institutions in shaping policy choice and implementation. The dominance of this research agenda, however, tended to reduce the amount of analytic attention given to other important drivers of policy outcomes, including the role of individual policymakers. Sarah L. Babb's analysis of the rise of neoliberal economic thinking among Mexican policymakers (item #bi2008002010#) and Jonathan T. Hiskey's case study of President Carlos Salinas' striking skill as a politician (item #bi2004001545#) remind us that at the end of the day it is individuals, with their personal biases and skills, who operate within the constraints imposed by the structures and institutions that shape the policy-making environment to formulate and implement policy.

Research on Mexico's postreform economy, meanwhile, has produced an impressive array of studies that together make an important contribution to explaining why reforms that shifted economic decisions from the state to the market while democratizing policy-making have failed to produce rapid growth and development. Although there remains a strong current of analytic opinion that identifies global capitalism as the culprit, recent literature reveals a broad consensus among both Mexican and non-Mexican analysts that the problem is not the capitalist market model per se but instead how it has operated in Mexico. This finding has produced a new research agenda focused on government and market failures, how they have hindered market efficiency, and policy recommendations for reducing their negative impact.

This research includes an excellent volume published by Mexico's UNAM (item #bi2008002023#) that couples a comprehensive set of analyses of the macroeconomic sources of Mexico's weak economic performance during the past 20 years with studies focusing on weaknesses inherent to specific economic sectors and regions. A series of in-depth studies of the financial, information technology, and social policy sectors, the provision of public services, and the economies of Sinaloa, Veracruz, Estado de México, and Puebla deepen and further enrich this research agenda.

These studies identify a complex mix of variables that help explain limited growth, job creation, and increased inequality. Yet in the process, several of them reach strikingly similar conclusions: the Mexican government has been unable or unwilling to mitigate the negative impact of market failures operating in the national, regional, and sectoral economies and of government failures of its own making. Specifically, this literature points to the absence of supportive public policies to promote emerging sectors (item #bi2009001841#) or to mitigate the negative impact of reform in regions highly dependent on nonmodern agriculture (items #bi2008000411# and #bi2008002011#). Other works identify the challenge created by institutions that developed in an authoritarian political environment and are operating perversely in Mexico's current democratic setting (items #bi2008001318# and #bi2008002017#). One title illuminates the continuing ability of powerful societal actors to protect their interests even at the price of harming national well-being (item #bi2007000510#). And two studies show how policy "solutions" often derive from a purely political logic and thereby actually increase inefficiencies rather than reduce them (items #bi2009001753# and #bi2008001619#).

By shifting analytic focus from the macro level to the regional and sectoral and from past policy decisions and economic models to the future of the Mexican political economy, recent research has helped to identify some of the obstacles to effective market operations in the Mexican context. By pointing to the government as a key culprit in failing to respond effectively to market failures and to avoid policies that generate additional distortions, these studies have also directed the Mexican political economy research agenda on a path that leads "back to the future"—back to a focus on the drivers of policy choice and implementation.


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