Mexican agriculture in economy-wide policy: Latitude for special treatment

Abstract

The Mexican economy has gone through radical transformations in the past 7 years which have been reinforced during the Salinas administration. From the early 60s up to the mid-eighties, Mexico tended to pursue an inward-oriented development strategy. Those economic policies affected negatively the agricultural sector, especially through the indirect effects of the macroeconomic policies. The paper analyzes the role of the agricultural sector in the process of liberalization. It is argued that strategies to develop agriculture must also focus on policies outside the sector, that the level and rate of economic growth is particularly sensitive to investment in public goods, and that an over-investment in these goods might be justified if it induces rural households to engage in political activity that will prevent a movement towards the old policy regime once an economic crisis is resolved.