Alternative economic policy proposals in Latin America: the case of Mexico

Abstract

This research examines the economic policy project that the Mexican government has been executing since the end of 2018. The project undertaken expressly distances itself from neoliberalism ideas. This was the case of other government projects advanced in countries within the region in the first fifteen years of the XX’s Century. In all of them, there are specific proposals that ran along a different path than that proposed by the Washington Consensus. In Mexico, up until 2021, and as in many other countries in the region, the alternative economic policies are carried out in conditions of weak growth. These were even present before the COVID-19 pandemic. The economic policies enforced include a significant redistribution of public spending, which in turn allocate resources to a set of social programs that seek to serve specific sectors of the population. This mainly is done through direct cash transfers programs. The energy sector as a key state asset is studied. The research shows that it provides State owned companies with the capacity to meet the demand for gasoline and other oil products. It also allows them to organize and run directly all electricity generation and distribution, and the market itself. However, as argued, besides the redistribution of public spending, there are no other relevant changes in fiscal policy, and even less in monetary policy. Part of the visible consequences is a downward trend in investment as a proportion of GDP. This research concludes that in this context, a significant economic growth that could lead to improvements in income distribution and help build institutions that support a broad Welfare State will be very difficult to attain.