Searching for Growth and Development in Authoritarian Mexico : A Brief Tale of the NAFTA Commitment Device
Mexico’s pursue and implementation of the North American Free Trade Agreement (NAFTA) was a pro-growth policy strategy that deepened Mexico’s economic liberalization process at a time of crisis and macroeconomic stabilization. In that context, NAFT...
| Main Author: | |
|---|---|
| Format: | Working Paper |
| Language: | English English |
| Published: |
World Bank, Washington, DC
2017
|
| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/335681487591534632/World-development-report-2017-searching-for-growth-and-development-in-authoritarian-Mexico-a-brief-tale-of-the-NAFTA-commitment-device http://hdl.handle.net/10986/26211 |
| Summary: | Mexico’s pursue and implementation of
the North American Free Trade Agreement (NAFTA) was a
pro-growth policy strategy that deepened Mexico’s economic
liberalization process at a time of crisis and macroeconomic
stabilization. In that context, NAFTA constituted a
commitment device to investment that ensured continuity to
both the stabilization and the liberalization processes.
NAFTA was possible for Mexico thanks to a new coalition
between public and private elites that had recently gone
through a deep transformation process themselves. After more
than twenty years, NAFTA has significant results in terms of
investment and levels and diversification of trade; however,
the evidence on its impact in growth and development is
mixed. The asymmetry of negotiation power between the United
States and Mexico affected the agreement, but its final
shape and implementation were impacted in important ways by
Mexico’s political realities. Two examples of this: The
highly hierarchical, camarilla-style line of command of the
Mexican team derived in in controversial concessions and
strategic mistakes in the areas of agriculture and financial
services. Later, a corporatist, authoritarian regime induced
a weak supplementary labor accord that can have had the
potential of effectively promoting higher equity through
strengthened workers’ rights and more democratic industrial relations. |
|---|