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Latin American Research Review 38.3 (2003) 223-236



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The Mexican Economy:
Persistent Problems and New Policy Issues in the Aftermath of Market Reforms

Jaime Ros 1
University of Notre Dame


Reformas Economicas En MÉXico, 1982-1999. Colleción Lecturas del Trimestre Económico 92. Edited by Fernando Clavijo. (México: Estrategia y Análisis Económico, Consultores, S.C., Comisión Económica para America Latina y Caribe, Fondo de Cultura Económica, 2000. Pp. 584.)
Polarizing Mexico. The Impact Of Liberalization Strategy. By Enrique Dussel Peters. (Boulder, Colo.: Lynne Rienner Publishers, 2000. Pp. 249, $49.95 cloth.)
Mexico: A Comprehensive Development Agenda For The New Era. Edited by Marcelo M. Giugale, Olivier Lafourcade, and Vinh H. Nguyen. (Washington, D.C.: The World Bank, 2001. Pp. 748, $65.00 paper.)
México: Hacia La Reconstruccion De Una EconomiA. By Nora Lustig. (México: El Colegio de México y Fondo de Cultura Económica, 2002. Pp. 200, $113.00 Mexican pesos.)
Oecd Economic Surveys: Mexico 2002.By the Organisation for Economic Co-operation and Development (OECD). (Paris: OECD, 2002. Pp. 200, $34.00 paper.)

Since the mid-1980s successive Mexican governments have made several attempts at macroeconomic stabilization and embarked on a path of structural reforms. Balance of payments liberalization and the North American Free Trade Agreement (NAFTA) have closely integrated the economy with that of the United States, both in terms of trade and capital flows. Restrictions on foreign ownership have been largely eliminated, and foreign participation in the economy has increased through direct investments in new plants, as well as mergers and acquisitions. [End Page 223] State banks and public enterprises have, with few exceptions, been turned into private hands. Privatization revenues together with debt relief (under the 1989 Brady Plan) and fiscal adjustment have allowed the government to reduce its debt as a proportion of gross domestic product (GDP) to rather low levels by international standards. A market-oriented rural economy has emerged following far-reaching changes in the land tenure system, price policies, and the privatization or elimination of state enterprises and their substitution by a combination of subsidies and public programs.

The books reviewed in this essay examine the vast transformations brought about by the market reform process and address the problems and new policy issues that have emerged in the aftermath. The more than 700-page volume edited by Marcelo Giugale, Olivier Lafourcade, and Vinh Nguyen and institutionally housed and published by the World Bank presents an extensive assessment of the state of the Mexican economy at the end of the Zedillo government and a detailed rationale of the policy recommendations of this multilateral institution for the incoming Fox administration (2001). The OECD volume, published in 2002, is the latest country study on Mexico by this influential international organization. As a survey the OECD study is of particular interest, being the first of its kind since the Fox administration that examines the short and long-term challenges facing the current government. Fernando Clavijo's edited volume is a collection of essays that were written as part of a multi-country research project housed by the UN Economic Commission for Latin America and the Caribbean (ECLAC) (2002). Together these essays provide a comprehensive evaluation of market reforms from a perspective of "healthy skepticism" close to ECLAC. Enrique Dussel Peters presents a critical view of Mexico's liberalization strategy (2000). The author acknowledges the relative success of the strategy "on its own terms," but does not believe that export expansion in a market-friendly environment will lead to overall development. As its title indicates, the book argues that the strategy has led to an increasing polarization in household incomes, regional development, productive sectors, and firms. Nora Lustig's book is the Spanish edition of Mexico: The Remaking of an Economy, the second edition of which was published in 1998 (2002). The book provides a comprehensive account of the reform process since the initial steps of trade liberalization and privatization under the De la Madrid administration. This account...

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