Manuel Palma-Rangel () (Instituto Federal Electoral)
Abstract
This paper examines whether the current political arrangements framing the Mexican politics help in consolidating and advancing those economic reforms that have been implemented in Mexico since the 1982 severe economic crises. I will argue that these arrangements create impediments to the co-ordination required to sustain and advance those policy changes that are needed under the new economic model. Formal and informal institutional environments that do not provide for the adequate enforcement of political exchanges also generate high transaction costs. Politicians will have to design complex mechanisms to protect their rent allocation. Many political transactions will not be implemented, and those that may be so will tend to generate relatively inefficient public policies. The capability of the political system to enforce the new economic rules as well as property and other legal rights is also weak. As these factors play a key role for the allocative efficiency of markets and, consequently, for growth and development, the paper concludes that formal macroeconomic and structural reforms in economic sectors may not be enough.
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Publisher Info
Article provided by Ilades-Georgetown University, Economics Department in its journal Revista de Analisis Economico.
Volume (Year): 21 (2006) Issue (Month): 2 (December) Pages: 83-103 Download reference. The following formats are available: HTML
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Find related papers by JEL classification: D23 - Microeconomics - - Production and Organizations - - - Organizational Behavior; Transaction Costs; Property Rights D78 - Microeconomics - - Analysis of Collective Decision-Making - - - Positive Analysis of Policy-Making and Implementation P16 - Economic Systems - - Capitalist Systems - - - Political Economy of Capitalism
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