Mexico's Economic Problems

Kevin Grier, Professor of Economics at the University of Oklahoma, writes about Mexico's Economic growth problem,
I believe the primary two problems with mexico are both political (1) very little real competition in the domestic economy (2) no true rule of law. Fundamentally its still a society where personal connections or bribes get lots of things done. The "ideal" of everyday anonymous transactions working out well even when there are time intervals between beginning and end (payment and reward) just is not there. Also the Mexican civil war at the beginning of the 20th century probably had something to do with the low growth in the first half of the century. That was no joke, that war. The "golden years" could easily be high transitional growth getting back on the BGP after the devastation of the civil war, kind of Mexico's mini version of the Japanese and German growth miracles after WWII.

imho Mexico is middle income due to "location location location" and is still chained to an almost feudal social and political system.

Comments

  1. True_LiberalSeptember 3, 2004 at 5:41 AM

    "...(1) very little real competition in the domestic economy (2) no true rule of law..."

    These are not independent of each other. (2) is at least partially the cause of (1). Without the rule of law it's an uphill battle to attract outside investment to create more competition.

    (Is there an echo in here?)

    ReplyDelete
  2. Hispanic PunditSeptember 5, 2004 at 7:02 PM

    Good point, True Liberal. I agree.

    Btw, what do you mean by echo?

    ReplyDelete
  3. Monica Gamez-DjokicMay 26, 2005 at 8:55 AM

    Hello,
    I am an undergraduate student at Wellesley College very interestd in the current economic situation in Mexico. One of the organizations that I am part of would like to start some sort of small scale project that works towards economic development in Mexico using students as our main tool. Do you have any recommendations as to what problem we should address?
    Thank you,
    Monica

    ReplyDelete
  4. HispanicPunditMay 26, 2005 at 9:30 AM

    Hey Monica,

    You might want to contact Tyler Cowen, he is an economics professor that has recently spent some time in Mexico. He might be able to give you more specifics.

    As far as generalties goes, I would say that Mexico's biggest problem is government corruption and the need for a stronger rule of law. Here are some sources that may interest you. Here, here, here and here. In addition, while this may be a bit dated, the gist of it is probably the same today.

    Hope that helps.

    ReplyDelete
  5. Cris RosasFebruary 18, 2006 at 5:57 AM

    I got a great solution that would fix Mexico's economic woes; The U.S. goverment should come up with an excuse to invade and after we win emplement a Marshal Plan, like the U.S. did after WWII for Europe and Japan.Also, South Korea made out pretty good after the Korean war.

    ReplyDelete
  6. ObserverFebruary 19, 2006 at 4:31 AM

    “I got a great solution that would fix Mexico’s economic woes; The U.S. goverment should come up with an excuse to invade…”

    - Cris Rosas

    They did that about 160 years ago; it didn’t work.

    ReplyDelete
  7. Cris RosasFebruary 21, 2006 at 1:38 AM

    Observer- That is because the U.S. did not stay to form a goverment for them. They simply waged war they won and later left.

    ReplyDelete
  8. ObserverFebruary 21, 2006 at 10:33 AM

    Those poor, poor Mexicans- how different their socio-economic outlook would have been had their benefactor (U.S.) occupied…err I mean liberated them.

    ReplyDelete

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