Pedro Aspe, Economic Transformation the Mexican Way

This book comprises the Lionel Robbins lectures delivered at LSE in 1992. Since Pedro Aspe was at that time some two-thirds of the way through his term as Mexico’s Finance Minister, it provides an account of what he thought he was doing and what he was hoping to achieve, without the benefit of hindsight. The book is agreeably straightforward and surprisingly comprehensive. It could have done with more careful editing, but this is a fault more easily forgiven when the author is a Finance Minister than when he is an academic. The introductory chapter deals with macro policy, with much emphasis on the Pacto. This is followed by chapters on financial and fiscal reforms, the debt problem and liberalization of external trade and payments, privatization, and future prospects for the Mexican economy. The book will surely provide the definitive inside account of the Salinas reforms. Given the author’s position, one can hardly review the book he has authored without also reviewing the program of which he was a principal architect. With the benefit of two years more hindsight than Aspe had, it seems that there are three major grounds for concern about the strategy that he describes and defends. The first is that it led to a new overvaluation of the peso. The second is that the Pacto may have outlived its usefulness. The third is that the evidence so far does not seem to support his hope that Mexico will become an economically more just society. I will discuss these in turn.