The Roots of Latin American Protectionism: Looking Before the Great Depression

This paper uncovers a fact that has not been well appreciated: tariffs in Latin America were far higher than anywhere else in the century before the Great Depression. This is a surprising fact given that this region has been said to have exploited globalization forces better than most during the pre-1914 belle epoque and for which the Great Depression has always been viewed as a critical policy turning point towards protection and de-linking from the world economy. This paper shows that the explanation cannot lie with output gains from protection, since, while such gains were present in Europe and its non-Latin offshoots, they were not present in Latin America. The paper then explores Latin American tariffs as a revenue source, as a protective device for special interests, and as the result of other political economy struggles. We conclude by asking whether the same pro-protection conditions exist today as those which existed more than a century ago.

Industrial development under institutional frailty: the development of the Mexican textile industry in the nineteenth century

La Historia Económica en Latinoamérica. Edición a cargo de Pablo Martín Aceña, Adolfo Meisel, Carlos Newland.Editada en la Fundación Empresa PúblicaLa industria textil moderna apareció en México tempranamente y creció de forma continua a lo largo del siglo XIX. Sin embargo, esto no se tradujo en un proceso de industrialización exitoso como resultado de altos costos de transporte y fragilidad institucional: concepto que incluye la incertidumbre, la debilidad y la fragmentación institucionales. La fragilidad institucional generó una política arancelaría capturada que otorgaba bajos niveles de protección efectiva a la industria, un mercado financiero atrasado que limitó los recursos disponibles al crecimiento industrial, y un crecimiento en los costos de transporte debido a las alcabalas. Los altos costos de transporte fragmentaron el mercado nacional y como resultado generaron una industria geográficamente dispersa.Modern texture manufacture appeared early in México and grew continuously through the 19th century. Yet, it did not transíate into a successful industrialization process as a result of naturally endowed high transportation costs and institutional frailty: a concept that encompasses institutional uncertainty, weakness and fragmentation. Institutional frailty generated a captured tariff policy that gave low effective protection to the industry, a backward financial market that limited resources available for industrial growth, and increased transportation costs through inter-state tariff barriers. High transportation costs fragmented the national market and as a result, the textile industry grew geographically dispersed.Publicad

La historiografía económica de México

Publicad

Mexico

The economic history of post-conquest Mexico can be divided, somewhat arbitrarily, into six distinct periods. In the first, from the Spanish Conquest in 1519 to 1630, the indigenous population declined by more than 90 percent but productivity increased. In the second period, from 1630 to 1810, per capita output probably fluctuated around a level comparable to that of the thirteen British North American colonies in the early eighteenth century. Upswings occurred due to occasional bursts of activity associated with short-lived bonanzas in the colony's main export industry, silver mining; but the long-term trend was flat. The third period began with the outbreak of the independence wars (1810-1821), which provoked a sharp decline in per capita income led by the collapse of silver mining and external trade, from which the economy did not fully recover until after 1880. Elite political strife, peasant rebellions, and foreign invasions interrupted each short-lived upswing until a military coup brought Porfirio Diaz to power in 1877. The fourth era in Mexican economic history, conventionally called the "Porfiriato" after President Diaz, coincided with the onset of sustained economic growth from the 1870s until the outbreak of the Mexican Revolution in 1911. In this era, political stability and institutional reform, combined with the development of an extensive railroad network and foreign direct investment, led to rapid, export-led economic growth. The fifth period extends from 1911 until 1982. The economy had just managed to recover from the Revolution (1911-1917) in the 1920s, when the Great Depression provoked a shift toward state-led import-substitution industrialization (ISI) that came to be viewed as part of the Revolution's legitimating legacy. This strategy produced high rates of economic growth from the 1930s until the financial and economic crisis of 1982. The sixth and final era began with the 1982 crisis and the decisive shift in 1985-1986 to a market-oriented economic strategy that culminated with the signing of the North American Free Trade Agreement (NAFTA) with Canada and the United States. This treaty went into effect on 1 January 1994. Despite its promise, rates of economic growth achieved in this era averaged well below those of the Porfiriato and ISI periods