Juan Carlos Moreno-Brid’s Blog

In his December 2018 inauguration speech, Mexican president Andrés Manuel López Obrador declared the demise of neoliberalism and promised to eradicate corruption, identifying them as the ultimate causes of the Mexican economy’s weak growth, acute inequality, and widespread poverty. He came to power in a historic landslide victory, with his political party MORENA winning a majority of seats in both chambers of Congress. Today, after more than a year in office, it is too soon to give a full assessment of his administration. But it is certainly useful to evaluate the extent to which his policies help or not in…

Background Last July, Mexico´s political landscape was turned upside down by the landslide victory of Andrés Manuel López Obrador (AMLO) in the Presidential elections, and of MORENA (his party) obtaining a majority of seats in both legislative chambers. In his inauguration speech, last December, he once again derided the neoliberal policies implemented in Mexico since the mid-1980s. He signaled Neoliberalism as the cause of Mexico´s calamitous long-term economic performance, marked by slow growth, rising inequality and widespread poverty. And blamed it as the origin of rampant corruption. He promised “…to abolish the neo-liberal regime” and to implement a different agenda…

NAFTA has utterly failed from a development standpoint and Mexico and US both need a new policy regime to reverse that rising inequality, secular stagnation, and regional divergences. If done with a cooperative spirit, the renegotiation of NAFTA can be a win-win for both, but a hasty US withdrawal from it would not work in favour of the average US and Mexican citizens. NAFTA_Renegotiation (Download the full text in PDF format) (This article was originally published in the World Economics Association)

Mexico has a long history of dealing with austerity as a tool to achieve fiscal consolidation. During the last 40 years, the country has repeatedly implemented programs for austerity and consolidation aimed at reducing fiscal imbalances, derived, in part, from acute macroeconomic crises. Since the late eighties, it has followed a more prudent approach to managing public finances and has avoided large deficits. However, the current outlook on Mexico’s fiscal performance is complicated. Mounting pressures to raise expenditure, along with major changes in its composition, and structural fragilities in fiscal revenues, have resulted in eight years of public deficits and…