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Pedal to the Metal: Structural Reforms to Boost Long-Term Growth in Mexico and Spur Recovery from the Crisis

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Author Info

  • David Haugh
  • Agustin Redonda

Abstract

While Mexico’s growth performance has gradually improved over the past decades, its convergence toward OECD countries has been less rapid than in several other emerging markets. The recent significant reductions in import tariffs should help the economy take fuller advantage of trade and investment integration, which could be a relative strength for Mexico given its geographic location. Reforms introduced in the past two years, including those to promote competition and transparency in the financial sector and, to a lesser extent in telecommunications, will also stimulate the dynamism of the economy. Despite this progress, further reforms are needed to boost overall and within-sector productivity. Relative weaknesses in education, infrastructure, financial development, the rule of law, as well as a lack of competition come out in various studies as explaining why Mexico has not grown as fast as other countries. Focusing attention now on reforms in areas with rapid pay-offs such as improving competitiveness and infrastructure could yield double benefits in supporting the recovery from the current recession and longer-term growth. This can be achieved by increasing competition, especially in network industries, liberalizing further the foreign investment and trade regimes, and improving education coverage and trade-related infrastructure. Pied au plancher : Des réformes structurelles pour dynamiser la croissance à long terme au Mexique et accélérer la sortie de crise Ces dernières décennies, le Mexique a progressivement amélioré ses performances en matière de croissance, mais sa convergence vers les pays de l’OCDE a été beaucoup moins rapide que celle de plusieurs autres marchés émergents. Les récentes réductions substantielles des droits à l’importation devraient aider l’économie à profiter plus pleinement de l’intégration des échanges et des investissements, ce qui pourrait constituer un atout relatif pour le Mexique compte tenu de sa situation géographique. Les réformes lancées ces deux dernières années, notamment celles qui visent à promouvoir la concurrence et la transparence dans le secteur financier et, à un degré moindre, dans les télécommunications, stimuleront également le dynamisme de l’économie. En dépit de ces progrès, de nouvelles réformes s’imposent pour favoriser la productivité globale et sectorielle. Selon diverses études, si la croissance du Mexique n’a pas été aussi rapide que celle des autres pays, cela tient aux faiblesses relatives concernant l’éducation, le développement du secteur financier et l’État de droit, à quoi s’ajoute le manque de concurrence. Concentrer maintenant l’attention sur des réformes rapidement rentables – en améliorant, par exemple, la compétitivité et les infrastructures – pourrait générer un double effet positif : soutenir la reprise pour sortir de la récession actuelle et créer de la croissance à long terme. On peut y parvenir en développant la concurrence, notamment dans les industries de réseau, en libéralisant davantage le régime des investissements étrangers et des échanges commerciaux, et en améliorant la couverture de l’enseignement et les infrastructures liées au commerce.

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File URL: http://dx.doi.org/10.1787/220704620333
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Bibliographic Info

Paper provided by OECD Publishing in its series OECD Economics Department Working Papers with number 733.

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Date of creation: 03 Nov 2009
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Handle: RePEc:oec:ecoaaa:733-en

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Keywords: economic growth; aggregate productivity and growth; antitrust issues and policies; financial markets; aggregate data; trade policy; economic development; institutions and growth; cross-country output convergence; croissance économique; convergence économique entre pays; productivité agrégée; politiques et mesures anti–trust; marchés financiers; développement économique; politique commerciale; cadres institutionnels;

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