Antecedents

porfiriato (1877-1911)

primary exporting model

● aimed to promote the agricultural sector, exporting raw materials to be manufactured

● abroad and then importing them back into the country.
● the hacienda was the most productive unit
● promotion of foreign investment
● many foreign enterprises established
● industrialization started
● infrastructure for domestic and foreign trade railway
● telephone and telegraph
● modernization of commerce
● foreign enterprises began to exploit mineral sources such as oil
● national industry is scarce
● haciendas became very productive due to agriculture and industry
● order and progress at all cost
● exploitation, abuse and slavery practices
● political opposition and social struggles repressed
● disparity between social classes

Mexican revolution (1910s-1920s)

regardless of disorder and violence, from 1910 to 1920 a Mexican economy

functioned
● regions developed unevenly: the most developed was the north, the least developed
● was the south
● oil and henequen production flourished
● world war I increased demand of mining products

redistribution of rural and urban properties changed

Post-revolution

● The U.S entered WWI

● Mexican economy healed some effects of the armed conflicts they had
● 1929 Great depression affected the national economy, and by 1932 Mexican
economy fully recovered from this effect.

Cardenism

six-year plan → not an economic model

● This plan paved the way for the following decades

● sought to implement the social content of the constitution of 1917
 - principles of this plan:
1. Defense of the country's natural resources
2. Application of the labor laws in favor of worker's rights
3. Distribution of lands through ejidos
4. Th exportation of the oil industry and Mexican railways
5. educational reform, the socialist school was introduced

The plan attempts to reduce economic dependence. It adopts the policy of economic
nationalism

Post-Cardenismo → implemented the Imports substitution model

● The oil expropation of 1928 provoked an international boycott of Mexican oil.
● WWII (1939-1945) increased the demand for oil and other raw materials.
● War industry ended the boycott, it also paralyzed production that Mexico imported.
● the national industry had an international and external market that required its
products.

The presidents that implemented the model and continue it were

➔ Manuel Ávila Camacho (1940-1946)
➔ Miguel Alemán Valdés (1946-1952) → first civilian president
➔ Adolfo Ruiz Cortines (1952-1958)

Imports substitution industrialization

It is an economic policy that advocates replacing foreign with domestic production. A country
should attempt to reduce its foreign dependency
It began the transformation of the national economy from benign agricultural to industrial

main aims:
● To protect, and grow local industries by the substitution of import and use of more
domestic or local goods
● Overcome the backwardness of the secondary sector
● Promote domestic trade

main measures and strategies

● subsidies to local industries
● taxes and/or barriers to imports
● promote exports
● avoid direct foreign investment
● substitution of foreign products
● overvalue currency to lower the cost of purchasing inputs and machinery from abroad
● facilitate access to stimuli and credits for growth

advantages
● employment increased
● dependence on the international market decreased
● small and medium industries flourished
● lower cost of transport
 ● national consumption increased

disadvantages
● a general increase in price
● appearance of state monopolies
● disappearance of market self-regulation (due to state intervention)
● tendency to stagnation and obsolescence of industry

This Import substitution model inspired the welfare state; institutions and public bodies were
created
● Mexican Institute of social security (1943)
● Technological Institute of Higher Studies of Monterrey
● National Institute of Fine Arts (1946)

Stabilizing development model

➢ economic boom (1954-1970) and is considered to be a golden age of capitalism in

Mexican economics
➢ the term used to refer to this period is “Mexican miracle”

Presidents that implemented this model:

➔ Adolfo Ruiz Cortines
➔ Adolfo Mateos
➔ Gustavo Diaz Ordaz

Objectives
● stop inflation with monetary stability
● maintain direct participation from the state in the economy
● support industry capitalization through a protection policy
● expand industrial capacity
● fiscal incentives to the industrial sector
● fiance development with national savings

Strategies
● more public enterprises
● establishment of guaranteed prieces for basic agricultural products
● taxes used to support the industrial sector
● development of infrastructure works
● public investment in social infrastructure

Effects
● decreased support for rural activities as a result massive urban migration
● uncontrolled urban growth
● stabilization of exchange between pesos and dollars for $12.5
● growth rate between 6 ad 7% per year (abour 4% is decent beyond 6% is quite good)
● industrial production increased by 8% inflation only 2.5%
● stabilization economic development
● agricultural productivity decrease
 ● social discontent protests, movements, etc

Shared Development model (1970-1976)

● implemented during the period of Luis Echeverría Álvarez (1970-1976)

● aimed to correct mistakes of the previous model, conserving somo of itss guidelines
● favor the sector need
● stabilize the country after the studennt movement of 1968

Objectives
● stop economic crisis
● prevent a deeper social and political crisis
● gain the trust of the young and middle class
● improve salaries
● reduce public debt
● promote a better quality of life
● support the agricultural
● address population growth in cities

Effects
● Private investment decreased
● public spending grew compared to income
● waste of resources for unviable development programs
● external debt and inflation increased
● private sector interests were affected

Accelerated Growth model (1976-1982)

Jose Lopez Portillo, the discovery of oil reserves (mexico 5th nation with the laargest amount
of hydrocarbons reserves)

objectives
● achieve economic growth and capital accumulation
● provide satisfaction to workers without disturbing the financial interests of the
companies
● carry out conciliatory acts with the industrial entrepreneurs
● improve basic services like health, water, housing and electricity
● ensure food sufficiency for families

strategies
● reduction of interest rate to 3%
● impulse in the oil industry by increasing investment in pemex
● redirection for industrial production towards processed food, clothing, footwear
● delivery of a basket of basic consumption to 19 million mexicans
● creation of agricultural insurance
● expanded coverage of social services
effects
● exchange rate went from $12.50 mexican pesos per dolar to $2,290 mexican pesos
per dollar
● expansion of public services
● very rapid economic growth
● distribution of this income was unfair
● financial deficit of the public sector grew from 6.7% to 14.8%
● dramatic fail in oil prices, worldwide would bring overall economic instability in the
long run