State policy, distribution and neoliberal reform in Mexico

Abstract

For nearly a decade, Mexico has embraced a neoliberal development model based on liberalisation, privatisation and deregulation. Yet, contrary to longstanding claims in the economic development literature, this strategy has yet to produce the high levels of growth and income gains that policy-makers had projected at the outset of the reforms. This article suggests that the lacklustre response of the Mexican economy represents more than a longer-than-expected adjustment lag. Rather, through an analysis of state policy in the urban-industrial and rural-agricultural sectors of the economy, the authors locate the sources of slow growth and wage compression in: (1) the particular mix of policies that have been implemented under the banner of neoliberalism in Mexico; and (2) the failure to properly coordinate macroeconomic stabilisation with longer-term goals of market restructuring.