Presentation on theme: "MODERNIZATION, DEPENDENCIA, AND IMPORT SUBSTITUTION INDUSTRIALIZATION Mexico."— Presentation transcript:
MODERNIZATION, DEPENDENCIA, AND IMPORT SUBSTITUTION INDUSTRIALIZATION Mexico
Financing ISI: Sources of State Revenue Taxation Imports and Exports Income (individual and corporate) and payroll Sales, property, etc. Fees Licensing fees and permits State-owned industry Monetary policy (printing) Borrowing
Financing ISI: Borrowing The question is who to borrow from and how. Ownership requirements require joint partnerships Local content requirements stimulate the domestic market for intermediary goods Restrictions on repatriation of profits
Modernization in Mexico: the Porfiriato Era “Order and Progress” Economic Modernization Modernization began in the rural areas At the beginning of his Presidency imports totaled $20 million and exports $29 million; at the end imports totaled $205 million and exports $293 million Focusing on the development of rail and telegraph lines to unite the country and facilitate export activities, as well as changes in land tenure to promote private property Modernization was mainly paid for with foreign investment Economic modernization favored large landholdings, pushing increasing numbers of landless peasants into the export-led market economy and competitive wage labor
Dependency Theory and ISI: Revolutionary Mexico Dependency Theory in Mexico, though popular academically, never had much political sway. ISI was associated with the revolutionary project as a means of benefiting clients of the PRI, sustaining their rule Small Farmers Unionized urban workers Unionized public employees Business Elites
Dependency Theory and ISI: Revolutionary Mexico Encouraging rural support Agrarian reform: Article 27 of the Constitution allowed for the formation of ejidos In total over 170 million acres were distributed from large estates to over 3 million peasants By 1940 approximately ½ of cultivated land was held by ejidos and the number of landless rural laborers declined by almost 25% Encouraging urban support Legal protections for unions and union members Preferential access to social welfare programs
Dependency Theory and ISI: Revolutionary Mexico Encouraging domestic businesses Low rates of taxation Subsidize production inputs Targeted barriers to market entry Targeted import and export restrictions Manipulation of exchange rate policy Restrictions on FDI
Questions What role do political motives play in the economy? To what extent do/can domestic political circumstances influence the national economy? How should we understand the legacy of ISI? Debt and populism? Or industrialization and infrastructure improvements? Dependency theory raised questions about distributive justice that remain valid. Do we have a way to address them?
A Note on Policy Papers Problem: slow and/or unequal economic progress under capitalism. Policy options: Modernization Export-oriented growth Dependency Import Substitution Industrialization NOTE: you must argue in favor of a policy
Your consent to our cookies if you continue to use this website.