Article

State and Capital in Mexico : Development Policy Since 1940 / J.C. Cypher.

Authors:
To read the full-text of this research, you can request a copy directly from the author.

Abstract

La obra presenta un análisis de las políticas económicas del México contemporáneo, de los años 1940-1988. Los resultados exponen tres cuestiones: Las teorías sobre el estado mexicano, un panorama de la situación económica de 1940-1970 y las consecuencias de las políticas económicas en los sexenios de Luis Echeverría Alvarez, José López Portillo Pacheco y Miguel de la Madrid Hurtado.

No full-text available

Request Full-text Paper PDF

To read the full-text of this research,
you can request a copy directly from the author.

... 1930s and the 1980s in which the federal government assumed tax powers previously be- longing to subnational governments (Aboites, 2003;Diaz-Cayeros, 2006). Sources: For 1990For -2009. For 1980For -1989. ...
... For earlier decades: Ar- gentina: Camelo and Itzcovich (1978), Cetrángolo and Gómez (2007); Brazil: ibge (2006); Chile: Díaz, Lüder and Wagner (2010) and World Bank (1961;1966;1970); Mexico: Diaz-Cayeros (2006: 36); Uruguay: García (2014). Sources: For 1990-2009: CEPALSTAT (1990. For 1980For -1989 Bank (1961;1966;1970); Mexico, Diaz-Cayeros (2006: 36); Uruguay: García (2014). ...
... In pre-Pinochet Chile the state enterprise sector was also far more imposing than in Mexico (Etchemendy, 2011: 293-295). Efforts to expand the state's role in ownership and production were consistently resisted by Mexican capitalists (Cypher, 1990). Trade protectionism was also modest by regional standards (Ros, 1993). ...
Article
In recent years Mexico has had the lightest tax burden in Latin America. Using qualitative, historical analysis, this paper argues that a crucial cause of this phenomenon is the resistance of an exceptionally politically mobilized economic elite, which has resulted in the defeat or dilution of repeated attempts at reform. The intensity of elite resistance reflects, in turn, a strongly anti-state ideology constructed through conflict with the state, especially during the 1930s. This emphasis on the historical construction of preferences clarifies a central paradox of the literature on Latin American taxation: the fact that a number of authors agree that elite cohesion and political connections are important, but disagree on whether they hinder or facilitate revenue-raising reform.
... Por otra parte, dentro de los impuestos a las personas físicas, la participación de los impuestos al ingreso derivado del capital era muy reducida (en 1972 sólo el 23.9% provenía de impuestos a los ingresos de capital)-ver Solís (1981), p. 166; Gil Díaz (1988, pp. 324 y 325) realizó una estimación del sesgo introducido al no incorporar el impuesto inflacionario, de la que resulta evidente que las tasas impositivas reales 3 Parece haber cierto consenso entre los economistas, que escribieron sobre el periodo, de la necesidad de una reforma fiscal profunda (Fitzgerald, 1984(Fitzgerald, y 1985Solís, 1981;Gil Díaz, 1984;Looney, 1985;Buzaglo, 1984;Tello, 1979;Sheahan, 1987;Cypher, 1990;Barkin, 1990;Castañeda, 1993;Levy, 1981;Basañez, 1990). Si bien la importancia de la reforma es racionalizada de maneras muy distintas, todos los autores citados concuerdanalcaracterizaralsistemaexistentecomoinapropiado,yaseaporineficiente, inequitativo o incapaz de generar un crecimiento estable. ...
... A partir de 1973 hubo un recrudecimiento en las relaciones entre gobierno y empresarios (Cypher, 1990;González, 1981;Tello, 1979;Solís, 1981y Basañez, 1990. El gobierno decidió continuar con su proyecto de Desarrollo Compartido, por lo que, aunque recibió un fuerte golpe por el lado de los ingresos, mantuvo su línea de acción por el lado del gasto; éste último se incrementó de manera notable (el cual como porcentaje del PIB pasó de 6.5% en el periodo 1969-1972 a 8.9% en el periodo 1973-1976 y en consecuencia, el déficit operacional pasó de 3.47% en 1972 a 7.12% en 1975), 10 y la participación de la inversión pública en sectores prioritarios como la agricultura, el turismo, las exportaciones y la educación mostraron un importante repunte. ...
Article
Full-text available
This paper presents a model grounded on game theory with incomplete information to explain some economic events that took place in Mexico during the Echeverría administration. These are the aborted fiscal reform of 1972 and the deterioration in the relationship between the government and the private sector from 1973 to 1976 (represented by excesive government expenditures, capital flight, inflation and low investment).
... with the 'developed' countries. This aim forged the idea of a 'mixed economy' which should be guided by the state (Cypher 1990: 11). The guiding role of the state complied with the Import Substitution (IS) strategy which many countries of the periphery adopted after the Second World War. ...
... In the 1970s, the Mexican economy began to show declining levels of profitability which had serious ramifications for the relations between capital and labour (Soederberg 2001: 65). At the same time, the growing paralysis of the bureaucracy and other institutions of the state reduced the effectiveness of the state's intervention in terms of promoting private capital accumulation (Cypher 1990: 97; Tirado 1987: 491–2). Despite the huge debt, after new discoveries of rich oil reserves in Chiapas and along the Caribbean coast, the United States and other foreign creditors poured US$3 billion worth of new credits into the country between 1976 and 1979 (Cockroft 1983: 260). ...
... Over the six years that Vicente Fox was president, Mexico's gross domestic product (GDP) grew at an estimated annual real rate of 2 percent. Taking the three sexenios during which Mexico embraced the free trade policies that culminated in NAFTA and beyond (1988198919901991199219931994199519961997199819992000200120022003200420052006, the average annual real rate of GDP growth was 3 percent, roughly one-half that achieved in the import-substitution era between 1940 and 1982 (Gutiérrez 2006, 3A; Cypher 1990). Manufacturing growth for the 2000 to 2006 period was roughly 0.6 percent per year, with employment in that sector falling 15 percent between 2000 and 2005 (Dussel Peters THE STRATEGIC ROLE OF MEXICAN LABOR UNDER NAFTA 123 ...
... This combination of policies has given rise to a near stagnant economy when viewed from the perspective of the rate of growth of per capita income: between 1980 and 2003, per capita income increased only 0.5 percent per year. Between 1988 and, the level was an unimpressive 1.4 percent per year—far below the nearly 3 percent rate achieved from 1940 to 1980 under a policy of state-led development (Cypher 1990; Dussel Peters 2006b, 77). Further exacerbating the situation, the growth in productivity in the nonmaquila manufacturing area (which includes the disguised maquilas, the source of major dynamism in this area) has failed to lift wages, asFigure 3 shows. ...
Article
Full-text available
This article aims to reveal the precise meaning of Mexico's export platform by focusing on maquiladoras and the disguised maquila industry. In both sectors, imported components account for 75 to 90 percent of export value. As a result, benefits for the Mexican economy are basically restricted to wages, that is, the value of the labor incorporated into the exports. The authors argue that what is actually taking place is the disembodied exportation of labor or, alternatively, that the workforce is being exported without requiring Mexican workers to leave the country. The authors thus demystify the purported orientation of Mexican exports toward high-value-added manufactured goods and reveal the regressive movement of the export platform.
... This resurgence was led by a reinvigorated state effort to promote manufacturing. Using borrowed money (largely from foreign sources), the state subsidized loans; provided the private sector with below cost state produced industrial inputs (including petroleum, lumber, and mining products, electricity, transportation, cement, and steel); and established new parastate firms producing products such as auto parts and machine tools (Cypher 1990: 62). ...
... In 1984 the state controlled 1,212 firms and entities. By December 1988, the number had been reduced to 448 (Cypher 1990: 132). By the middle of the decade the government was under pressure to move beyond austerity and commit to a new economic strategy. ...
Article
Full-text available
ABSTRACT The 1997-98 East Asian crisis triggered a wave of neoliberal-influenced economic restructuring throughout the region. In most casesworking,people opposed this restructuring, fearing that it would produce greater inequality and poverty, higher levels of unemployment,and greater workplace insecurity. Mainstream economists and
... This period of intensified social conflict had significant ramifications for the relations between bourgeoisie and the government. meanwhile, as the pri cared more about their relations with the masses, in the 1970s, the mexican economy began to show declining levels of profitability due to which state-bourgeoisie relations would come under increasing strain (soederberg 2001: 65). the growing paralysis of the bureaucracy and other institutions of the state partly due to intensified struggles of workers and peasants reduced the effectiveness of the state's intervention to promote private capital accumulation which increased discontent among the capital groups (Cypher 1990(Cypher : 97, tirado 1987. the mexican foreign debt was growing at an unsustainable level, from $842 million in 1960 to $3.5 billion in 1969 to $50 billion in 1976 and to $100 billion in 1980 (Barkin 1986: 17-42, Cockroft 1983: 259, Otero 1996 1970s, as various representative associations of bourgeoisie frequently complained about the political instability and inconsistent government policies, they attempted to become a united front to control policy formulation more closely. ...
Book
Full-text available
Decentralization is accepted as one of the defining features of the third wave of democratic transitions in Latin America and commonly understood as an index and an agent of democratization. This rather optimistic perspective is inherent in the literature which is dominated by two theories. The liberal-individualist approach, especially as advocated by the World Bank, promotes decentralization policies on the premise of their efficiency, equity, and responsiveness to local demands. Similarly, the statist approach claims that decentralization can be the route to greater accountability, transparency and participation in governance; they add that this path should be guided by political elites and institutions. These dominant views nevertheless understate the extent to which certain decentralization policies have been implemented in lockstep with neoliberalization. This book examines the relationship between global economic processes and decentralization. It argues that through decentralization policies, the imperatives of neoliberal rules of competitiveness have been diffused into local governments and economies, generating different local development models. Whether decentralization produces democratic opening at the local level is contingent on how the local economy is integrated into global economic processes, and which social and economic groups are empowered, and disempowered, in that transition.
... The continued decline of public investment followed the new orientation toward a larger private-based sector and a market-friendly economy (L€ achler & Aschauer, 1998). Two investment trends can be identified during this period (Cypher, 1990). The first is that, with public investment cut approximately by half, the private sector could not rely on the state to open up new areas of investment. ...
Article
This paper uses multiple regression analysis to determine the extent to which the regional distribution of public investment policies before and after the Mexican debt crisis and the opening of the country to trade have responded primarily to efficiency or redistribution criteria. The results highlight that the regional allocation of public investment funds in Mexico since 1970 seems to follow neither redistribution, nor efficiency criteria. In addition, there is no evidence that the allocation of funds has a positive effect on regional growth. The most likely explanation is that pork-barrel politics has played a key role in the regional distribution of funds, and probably has contributed to lowering their economic impact.
... In terms of income growth, this period is often referred to as Mexico's "Golden Age." During this time the economy grew at an annual rate of over 6 percent, or over 3 percent in per capita terms (Cypher 1990). What's more, public investment appeared to crowd-in private investment. ...
Article
Full-text available
Abstract Previous work has shown that the results of both China and Mexico’s export-led market reforms over the past quarter century have been strikingly different. In contrast to China, Mexico has not managed to increase the value added of its exports of manufactured goods and has subsequently had a difficult time competing with China in world markets. Building on this previous work, in this paper we conduct a comparative analysis of the role of government policies in industrial learning and the development of capabilities of indigenous firms in Mexico and China in order to shed light on why China is so outperforming Mexico. We find that Mexico and China have had starkly different approaches to economic reform in this area. Mexico’s approach to reform has been a “neo-liberal” one, whereas China’s could be described as “neo-developmental.” Mexico’s hands-off approach to learning has resulted in a lack of development of endogenous capacity of domestic firms, little transfer of technology, negligible progress in the upgrading of industrial production, and little increase in value added of exports. By contrast, China has deployed a hands-on approach of targeting and nurturing domestic firms through a gradual and trial and error led set of government policies.
... The State was able to establish the rules of the game, consolidating its strength in economic activity through different means: land redistribution, fiscal and monetary policies, state-run firms, price controls and all kinds of interventions in trade, investment and labor markets. 7 5 For a more detailed description of this and other hypotheses of the Mexican State see: AguilarCamln (1990), Aguilar-Camln and Meyer (1991), Basafiez (1990a, b), Camp (1989), C6rdova (1989), Coslo-Villegas (1973), Cypher (1990), Hamilton (1983), Levy and Bazdresch (1991), Rodrlguez-Araujo (1988), Saldlvar (1988), Teichman (1988). ...
Article
Full-text available
A Game Theory interpretation is presented of the Mexican economy between 1940 and 1988. It is assumed a Mexican State with objectives of its own, coming from its commitment to the capitalist system and the need of legitimacy. The model consists of a differential non-cooperative game for three players (government, entrepreneurs and workers). The equilibrium strategies offer a rational explanation of several stylized facts of the period. In particular, the model suggests that the policy swings in different administrations moving (apparently) from one side of the political spectrum to the other, are not necessarily a consequence of the ideology of the president in office, but instead are an outcome of the political-economic environment of the moment.
... In terms of income growth, this period is often referred to as Mexico's "Golden Age." During this time the economy grew at an annual rate of over 6 percent, or over 3 percent in per capita terms (Cypher 1990). What's more, public investment appeared to crowd-in private investment. ...
Article
Previous work has shown that the results of both China and Mexico’s export-led market reforms over the past quarter century have been strikingly different. In contrast to China, Mexico has not managed to increase the value added of its exports of manufactured goods and has subsequently had a difficult time competing with China in world markets. In this paper we conduct a comparative analysis of the role of government policies in industrial learning and the development of capabilities of indigenous firms in Mexico and China in order to shed light on why China is outperforming Mexico. We find that Mexico and China have had starkly different approaches to economic reform in this area. Mexico has followed a “neo-liberal” path, whereas China’s approach could be described as “neo-developmental.” Mexico’s hands-off approach to learning has resulted in a lack of development of endogenous capacity of domestic firms, little transfer of technology, negligible progress in the upgrading of industrial production, and little increase in value added of exports. By contrast, China has deployed a hands-on approach of targeting and nurturing domestic firms through a gradual and trial and error led set of government policies.
... 17 Especially during the administration of Echeverría (1970 Echeverría ( -1976), the private business sector in Mexico engaged in " economic terrorism " and was unable, after exhausting the existent profitable projects during the first import substitution decades, to create new leading sectors. For the first time since the 1940s, productive investments accounted for considerably less than 50 percent for the period 1970-1978 (Cypher 1990; Tello 1976 1977 new measures were introduced to reduce import dependency and to expand exports and trade in the border regions (Villareal 1988; Haneine 1987). The current account deficit reached $16.5 billion in 1981, and the external debt rose from $5.97 billion in 1970 to $78.22 billion in 1981. ...
Technical Report
Analysis of Mexico´s trade liberalization process in light of its increasing integration to the US-economy Working Paper 187, Hellen Kellog Instiitute, University of Notre Dame
... In the 1970s, the Mexican economy began to show declining levels of profitability which had serious ramifications for the relations between capital and labor (Soederberg, 2001: 65). At the same time, the growing paralysis of the bureaucracy and other institutions of the state reduced the effectiveness of the state's intervention to promote private capital accumulation (Tirado, 1987: 491–2; Cypher, 1990: 97). In 1981 and 1982, Mexico witnessed what was then generally considered as the gravest economic crisis in its history. ...
Article
Full-text available
Decentralization is generally accepted as one of the defining or distinguishing features of the third wave of democratic transition in Latin America. Decentralization, in fact, is commonly understood as an index and an agent of democratization. This article tests this optimistic perspective inherent in the literature and examines the effects of decentralization policies on the design of local development programs in a northern state of Mexico, Chihuahua. The case of Chihuahua shows that, although decentralization policies have expanded local participation in policy design and making, they have failed to bring equal access to local state power by various local social groups. After the decentralization of development programs, internationalized local capitalists have gained privileged access to political power. Thus, decentralization can easily be a vehicle of class domination and may not be a panacea for unequal power relationships in local politics.
... This combination of policies has given rise to a near stagnant economy when viewed from the perspective of the rate of growth of per capita income. Between 1980 and 2003, per capita income increased only 0.5 per cent per year, between 1988 and 2003 the level was an unimpressive 1.4 per cent per year-far below the nearly 3 per cent rate achieved from 1940-1980 under a policy of state-led development (Cypher, 1990;Dussel, 2006: 77). Further exacerbating the situation, the growth in productivity in the non-maquila manufacturing area (which includes the disguised maquilas, the source of major dynamism in this area) has failed to lift wages (seeFigure 3.3). ...
Article
� The authors argue that the periodisation of history of modern capitalism in conjunction with the international- isation of circuits of social capital is a powerful tool for the analysis of transnational economy. It is shown that the post- World War II import substitution and export-led industrialisation strategies are both a part and parcel of the internationalisation of capital. The state's task in this highly globalised capitalist era is more complex and contradictory than in the earlier stage. The state's role in the present period is to pursue 'national' policies within an increasingly transnational environment. Here the contemporary nation- state has no choice except to go beyond itself in order to meet the challenge of encroaching transnational capitalist social relations.
Article
Policy-makers in both Mexico and the U.S. reacted to the economic crisis which began in Mexico in December, 1994 as if it were a problem of short-run financial liquidity. The argument presented in this article is that Mexico's current crisis has its origins in long-standing, fundamental problems of the Mexican economy. These long-run problems include: massive external debt, a severely skewed income distribution, inadequate job creation, low productivity per worker and lack of investment in infrastructure. The short-run policy response will not address the long-run problems.
Article
Full-text available
Ha habido innumerables intentos por definir y caracterizar la tendencia actual a la internacionalización del capital, que consiste en tres movimientos simultáneos: una expansión del comercio internacional, un crecimiento de los flujos financieros internacionales y la creación de sistemas de producción internacional integrados, asociados a una tendencia a la diferenciación, precarización y transnacionalización de los mercados laborales. A ve-ces se entiende que este proceso caracteriza a la “globalización”. Sin embargo, la globalización sigue siendo un concepto elusivo, a menudo descrito caprichosamente y empleado con ligereza. Por ello en este trabajo conferimos un carácter más concreto al proceso de internacionalización acelerada mediante el examen de lo que podría considerarse como un caso paradigmático: la adopción del modelo neoliberal en México, particularmente en el contexto del Tratado de Libre Comercio de América del Norte (TLCAN). El análisis de este caso no intenta definir la “globalización”, en virtud de la carga ideológica del término. Sin embargo, al patológico proceso en cuestión no se le puede considerar una aberración o una excepción a la dinámica de la internacionalización (o “globalización”). Más bien, se deriva —y al mismo tiempo es una negación categórica— del precepto neoclásico-neoliberal que afirma que una apertura indiscriminada entre naciones bajo el “libre comercio”, generará para éstas beneficios mutuos importantes, independientemente de sus disímiles fuerzas relativas, historias, aparatos productivos y niveles de desarrollo.
Article
Over the last two centuries in Latin America a Washington Consensus development strategy based on integration in the global trading system has dominated domestic demand management and industrialization "from within." This paper assesses the performance of each from the point of view of the impact of external conditions, and the validity of its underlying theory. It concludes by noting that replacing the Consensus will require not only a reform of the international financial architecture, but a return to the integrated policy framework represented in the Havana Charter.
Article
Full-text available
This paper addresses the important question whether public investment spending on economic infrastructure enhances economic growth and labor productivity in Mexico. Following the lead of the endogenous growth literature, it presents a modified production function which explicitly includes the positive or negative externality effects generated by additions to the public capital stock. Using cointegration analysis, the paper proceeds to estimate a dynamic labor productivity function for the 1955–94 period that incorporates the impact of the growth rate in the stocks of both private and public capital (as opposed to the flows) and the economically active population (EAP) (rather than the rate of population growth). The results suggest that (lagged) increases in public investment spending on economic infrastructure—as opposed to overall public investment spending—have a positive and highly significant effect on the rate of labor productivity growth. In addition, the estimates suggest that increases in government consumption expenditures may have a negative effect on the rate of labor productivity growth, thus suggesting that the composition of government spending may also play an important role in determining the rate of labor productivity growth. Finally, the findings call into question the politically expedient policy in many Latin American countries of disproportionately reducing public capital expenditures on economic and social infrastructure to meet targeted reductions in the fiscal deficit as a proportion of GDP.
Article
This article analyzes the weak economic performance of Latin America since the end of the Import Substitution era, emphasizing the structural impediments that led to the dissipation of opportunities for viable economic policies that arose during the latest commodity boom, 2002–2012. The theoretical/analytical framework for this article derives from the developmental hypotheses of Veblen, Gerschenkron, Innis, Abramovitz, Amsden, and Chang. All addressed, in their related but varied approaches, the “catching-up” problématique—with Veblen and Abramovitz analyzing “falling-behind.” In Latin America—the theoretical formulations regarding catching-up have had minimal explanatory power, for reasons explored in the text. Pioneering institutionalists, modern “revisionist” institutionalists (e.g., Amsden) and the Latin American Structuralists (e.g., Furtado and Prebisch) often converged regarding their confidence in the efficacy of rational, operative, developmentalist policies and programs. However, only those drawing from the work of Veblen—including Innis with his analysis of the “staples trap”—seriously considered the “falling-behind” hypothesis. During the latest commodity boom, Latin America’s elite failed to exploit favorable circumstances to diversify from low-value added, volatile, commodity production due to pre-Import Substitution (i.e., nineteenth century) institutional legacies. Endogenous industrialization was fragile, while the agro-mineral-financial export elite was persistent.
ResearchGate has not been able to resolve any references for this publication.