How could have Mexico become a Developed Country on par with Spain?.

I wonder if it might be a simple matter of geography? Australia and New Zealand, similarly isolated in the Southern Hemisphere far from the major high-income economies of the Northern Hemisphere, also experienced some relative decline. I don't know nearly enough about South Africa to comment, sadly.

But then, the Australasians saw nowhere near as much relative decline as the Argentines and Uruguayans. Politics matters.
The Southern cone might be relatively isolated, but I don't think the same can be said of Mexico and the Caribbean-adjacent states. Their proximity to the American marketplace should have been a boon, especially in the 1950-73 period when America's share of the global marketplace was at it's peak. As far as politics is concerned... Spain's superior performance in this time frame suggests that lack of democracy is not the issue. I'm certainly not familiar enough with the economic policies of either Franco's Spain or the various Latin American governments to make any informed speculation on this subject... but what I keep coming back to is that there are 20 or so governments in Latin America, it seems statistically improbable that all 20 would make consistently poor policy choices, while Western European/East Asian governments made consistently wise policy choices. I've seen the argument made that the import substitution model is to blame, but that still invites the question of why all of Latin America made that mistake while WE and EA didn't. Policy doesn't exist in a vacuum.

Is it possible to knit together a post-war economic order where the higher-income economies of Latin America are just as integrated into the emergent multilateralism of the West as Australasia? What would it take, their inclusion in the Allies?
Ceteris paribus, wouldn't heavy involvement in WW2/the Cold War be a disadvantage, since it'd mean a higher debt burden and higher taxes to fund their militaries? Better to freeload, surely.

So... We can thank Spanish colonial administration for our situation...
I don't know... Latin America was(overall) closer to parity with the Western Europe in 1900 then it is today(while Eastern Europe and East Asia have outright leapfrogged them), and colonization is 117 years more distant now then it was then. Though I suppose you could make the argument that a modern high-tech economy is handicapped by these problems in ways that 1900 resource-export countries weren't.

Business Insider: How an overlooked impact of Mexico's drug violence is holding back its economy

"Recent research has shown that high levels of violence in Mexico — like the 7.6% increase in homicide rate the country experienced in 2015 — not only have a negative impact on workers, but also prevent complex economic activities from starting and growing."

UPenn: Drug Trafficking, Violence, and Mexico's Economic Future

"The drug cartels challenge the viability of safe and secure business environments not only for large companies such as Pemex but also for small business owners and average citizens. In July 2010, gunmen ambushed a birthday party in the Mexican state of Coahuila, killing 17 people and injuring many more. Some sources believe these mass killings were the result of the innkeeper’s not paying the extortion fees that had been demanded of him. Clearly, the carnage of Mexico’s drug war is now affecting all strata of society — from impoverished migrants to the wealthiest elite and from neighborhood businesses to Mexico’s largest firms."

Forbes: Mexico's Astonishing Costs Of Fighting Drug Cartels Have Not Reduced Violence

"Mexico’s efforts to reduce the alarming levels of violence are having a significant impact on the country’s economy. In 2013, the cost of fighting the powerful drug cartels rose to almost $172.7 billion (more than twice Mexico’s foreign debt), according to the Global Peace Index 2014, published this week by the London-based Institute for Economics & Peace (IEP).

The sum, which is almost one tenth (9.4%) of Mexico’s GDP, amounts to $1,430 per person. Mexico’s violence containment costs are not only monetarily much higher than those incurred by Syria, Iraq and Libya, but among the highest in the world. Mexico ranks 25th in this category among 162 nations. The global economic impact of violence is estimated at $9.8 trillion or 11.3% of the global GDP."
Fair enough(and this suggests Mexico's recent growth is even more impressive, since it happened in spite of this).
 
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The Southern cone might be relatively isolated, but I don't think the same can be said of Mexico and the Caribbean-adjacent states. Their proximity to the American marketplace should have been a boon, especially in the 1950-73 period when America's share of the global marketplace was at it's peak. As far as politics is concerned... Spain's superior performance in this time frame suggests that lack of democracy is not the issue. I'm certainly not familiar enough with the economic policies of either Franco's Spain or the various Latin American governments to make any informed speculation on this subject... but what I keep coming back to is that there are 20 or so governments in Latin America, it seems statistically improbable that all 20 would make consistently poor policy choices, while Western European/East Asian governments made consistently wise policy choices. I've seen the argument made that the import substitution model is to blame, but that still invites the question of why all of Latin America made that mistake while WE and EA didn't. Policy doesn't exist in a vacuum.

A compelling 2014 article by one Eugenia Diaz-Bonilla, "Argentina: The Myth of a Century of Decline", argues that the biggest share of the gap comes from the economic mismanagement of the junta that took over Argentina in the mid-1970s.

It is true that other countries such as Korea or Spain, which had far lower GDPpc than Argentina during great part of the 20th Century overtook Argentina by a large margin since the 1970s. But it is also true that if Argentina had avoided the sharp drop in the 1970s and maintained the share of the US GDPpc that prevailed before that structural break, the country would have had now an income per capita above all countries in LAC and many European countries such as Portugal, the Czech Republic, Hungary, and Poland. And if it had maintained the lineal trend growth from the 1960s to the mid 1970s it would be now at about the level of New Zealand or Spain, according to the data of the Maddison Project. In other words, if Argentina had avoided the real tragedy that started in the mid 1970s, the country would be now a developed country.

Therefore, what has to be explained is not “a hundred years of decline” but the collapse in the mid 1970s. In what follows I will present the data that shows the 1970s structural break and make some comments about the issues surrounding such break, but the discussion about what I consider the deeper reasons for that collapse exceeds this note.​

That this was the era of juntas across South America is surely indicative. We know that politics can knock economies back, especially as they are left scrambling to recover: look at central Europe, where it generally took a decade to recover to pre-1989 GDPs. There was a similar, if smaller, lag in Spain and Portugal at the end of their dictatorships.

Ceteris paribus, wouldn't heavy involvement in WW2/the Cold War be a disadvantage, since it'd mean a higher debt burden and higher taxes to fund their militaries? Better to freeload, surely.

The central problem is that South America is just so far removed from the central fields of the Second World War and the Cold War, I agree.
 
I do think that there is something to be said for the idea that, after the Second World War, high-income South American countries suffered for the lack of any overarching framework to restrain their various populisms and provide a framework for growth and stability. An Italy that did not experience the economic miracle of the post-war era, for instance, might well look a lot like Argentina.
 
I do think that there is something to be said for the idea that, after the Second World War, high-income South American countries suffered for the lack of any overarching framework to restrain their various populisms and provide a framework for growth and stability. An Italy that did not experience the economic miracle of the post-war era, for instance, might well look a lot like Argentina.

What we saw in the 70's was an exhaustion of the import substitution industrialization model in Latin America after the energy crisis. Spain and Portugal went on the exact same path, but had the chance to integrate with their wealthier brothers to the north and kick their old dictators. Another possible path for Latin America would be a more export-oriented type of industrialization like in Asia, this model could actually work IMHO as long we have a highly dirigist government that can focus on education and specialization.
 
What we saw in the 70's was an exhaustion of the import substitution industrialization model in Latin America after the energy crisis. Spain and Portugal went on the exact same path, but had the chance to integrate with their wealthier brothers to the north and kick their old dictators. Another possible path for Latin America would be a more export-oriented type of industrialization like in Asia, this model could actually work IMHO as long we have a highly dirigist government that can focus on education and specialization.

It might conceivably work for Mexico, but I am not sure it would necessarily work for other countries without similarly close high-income markets.

In the particular case of the Southern Cone, which arguably was structurally much more like the high-income countries of Europe than it was the NICs of East Asia, I'm not sure this would be especially relevant. Japan, maybe ...

Question: How did Australia and New Zealand do it?
 
What we saw in the 70's was an exhaustion of the import substitution industrialization model in Latin America after the energy crisis. Spain and Portugal went on the exact same path, but had the chance to integrate with their wealthier brothers to the north and kick their old dictators. Another possible path for Latin America would be a more export-oriented type of industrialization like in Asia, this model could actually work IMHO as long we have a highly dirigist government that can focus on education and specialization.

The integration of Portugal and Spain into the European economies began in the 1960s during the dictatorships. Portugal had joined EFTA in 1960 and in November 1970 signed a bilateral free trade agreement with the EEC, coming into force on 1 January 1973. It set a timetable for the complete reduction of tariffs by 1977. Spain entered into negotiations with the EEC in 1967 and concluded an association agreement in 1970 where tariffs were reduced by 70% in stages until 1977.
 
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