After export-led growth, what kind of industrial policy did Mexican policymakers embrace and why? What were the results of this change?
Contributed Content (0)
Ask a Question
Why did Mexican protectionism lead to inefficient firms, whereas earlier US protectionism (which also often protected industries centered around commodities) did not? Was it a matter of a more competitive domestic market in the US, whereas in Mexico public enterprises were often the recipient of ISI protection?
Great question Brett and I'm not sure we know 100% why that is so. In my opinion, the protectionism of the US was more targeted and less economy-wide. Mexico, like much of Latin America at the time, completely overhauled their economy where almost all manufacturing was protected. That, combined with the fact that they had a one-party state that co-opted pressure groups, meant that it was unlikely that this protection would ever be lifted. So manufacturers felt safe knowing that they were protected and didn't worry about competition and innovation.