Industrial Policy: A Missing Link in Mexico's Quest for Export‐led Growth

Abstract

This article explores the need for Mexican policymakers to add an active industrial policy as a key instrument to assist in the nation's so far failed quest for high and sustained economic growth. Mexico implemented drastic reforms in the mid‐1980s to open its markets to foreign competition and to reduce the state's intervention in the economy, but these reforms failed to ensure robust economic growth. The article explores myths and facts of the theory and practice of industrial policy. It identifies what type of industrial policy the new administration, which took office in December 2012, will apparently implement during 2013–2018 and how it may, or may not, help to put Mexico onto a path of high, sustained economic expansion.

Latin America and the Middle Income Trap

“…As a result, industrial policies re-emerged in the region (Peres 2011), first slowly, but recently increasingly more explicitly. Mexico's National Development Plan 2013-2018, released in June 2013, advocates the use of industrial policy to achieve development (Moreno-Brid 2013). Brazil has been a major exception all along, never embracing Washington Consensus policies as extensively as its southern neighbors and all along maintaining its state development bank (BNDES) as well as more explicit and targeted industrial policies.…”

Evaluación de la política industrial durante el periodo de apertura económica en México

“…Fuente: elaboración propia con datos del Banco de información económica de inegi Otra forma de observar el fenómeno de desindustrialización es a través de la baja proporción de la formación bruta de capital fijo como porcentaje del piB. durante el periodo de 1995 a 2014 dicha proporción se mantuvo en alrededor de 22 por ciento (Banco Mundial), cifra inferior al considerado por la CepAl que es de 25 por ciento cuya proporción es la mínima necesaria para que un país pueda alcanzar tasas de crecimiento arriba de cinco por ciento (Moreno-Brid, 2013). la disminución de la intervención del estado en la economía en las últimas décadas fue promovida en todos los planes de desarrollo; sin embargo, algunos países asiáticos muestra que una política industrial con objetivos claros y de largo plazo puede producir resultados favorables en la senda de crecimiento de largo plazo.…”

Re‐Examining the Case for a Vertical Industrial Policy in Mexico: A Step Backward or Forward?

“…The second hypothesis behind Moreno‐Brid's () finding is that economic growth is associated with the type of industrial policy followed in the country. For example, to evaluate precisely the effects of switching from a vertical to a horizontal industrial policy, it would have been necessary to find a valid counterfactual that embodies the situation whether had Mexico opted to continue following a vertical industrial policy from the 1980s onward.…”

“…The second hypothesis behind Moreno-Brid's (2013) finding is that economic growth is associated with the type of industrial policy followed in the country. For example, to evaluate precisely the effects of switching from a vertical to a…”

“…8 These economists sustain that government failures are associated with state capacity to face its responsibilities. If it cannot do so efficiently, it does not mean that it should not intervene; rather, its capacities should be strengthened (Chang, 2012;Lall, 1993;Moreno-Brid, 2013;Rodrik, 2008). 9 The study of the relationship between productivity and economic growth begun several decades ago.…”