Mexico’s Liberalization Strategy, 10 Years On: Results and Alternatives

Abstract

A liberalization strategy began in Mexico during 1988 under the Salinas administration, and since 1994, that strategy has been continued, with minor changes, under President Zedillo. The Mexican economic strategy is an important test case for the success or failure of liberalization strategies, which have been implemented by many nations in the periphery, particularly in Latin America and Eastern Europe. Although the strategy of liberalization has a theoretical background, this has been left out of most academic and policy discussions. As this paper will demonstrate, the strategy of liberalization is closely linked to neoliberalism, but it is, nevertheless, of the utmost importance to define the two concepts and to distinguish between them, both theoretically and historically. The first part of this paper discusses the theoretical foundation of the liberalization strategy and differentiates this concept from neoliberalism. This is significant since in Latin America, and many other nations, neoliberalism has come to represent the evil of all evils and to be held responsible for all problems by people who have no clear notion or definition of what neoliberalism really is. The second part of the paper analyzes the liberalization strategy that has been operating in Mexico since 1988 and briefly evaluates its performance up to 1997. Based on these first two parts, the final section of this paper draws conclusions about liberalization strategy and about potential alternatives.