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Learning from the Past: Mexico's Failed Pro-Market Policy Experience

Mainstream economic policies in Mexico managed to generate growth that proved neither pro-poor nor sustained. The Mexican experience shows the need to leave behind the blind faith in market forces and embrace employment-based policies.

by Eduardo Zepeda

published by

Poverty in Focus

on December 1, 2008

Source: Poverty in Focus

Eduardo Zepeda, Senior Associate at Carnegie, assesses the extent to which reforms undertaken by the Mexican government following the recommendations of the Washington Consensus helped to improve labor outcomes.

Zepeda argues that while trade liberalization, the enactment of NAFTA, the promotion of export-oriented factories did create some jobs, the overall economic strategy had only weak labor results in general and specifically failed to increase unskilled workers’ earnings. Zepeda urges the rejection of a singular reliance on free market forces to create employment and improve income distribution. Instead, he recommends adopting employment-based development strategies as the viable alternative to generate pro-poor growth.

To view the entire December 2008 edition of Poverty in Focus:
http://www.undp-povertycentre.org/pub/IPCPovertyInFocus16.pdf

Carnegie does not take institutional positions on public policy issues; the views represented herein are those of the author(s) and do not necessarily reflect the views of Carnegie, its staff, or its trustees.