Diana Alarcón

North American Economic Integration

This highly accessible book explains the theoretical, historical and political background of the North American Free Trade Agreement (NAFTA), its impact and the debates surrounding its existence. In addition the authors provide a brief introduction to the theory of economic integration as well as a succinct overview of the evolution of the global economy, and the institutions that manage it, in the post World War II period.

Economic reform or social development? the challenges of a period of reform in Latin America: case study of Mexico

>The paper argues that 20 years of development have produced very mixed results in the economies and societies of Latin America. While the region was successful in reversing the large macroeconomic disequilibria of the 1980s, economic volatility persists, mainly associated with greater integration to the world economy. More importantly, the social impact of the long period of reform remains controversial. Through a review of comparable economic and social data for the region, it is suggested in this paper that such inconsistency—between economic and social performance—may be the result of deep flaws in the design of development policies. Over‐concern for macroeconomic stability, fast growth and rapid integration to the international economy has resulted in insufficient attention being given to the social cost of adjustment and structural change. Social policies have been mainly concerned with the administration of scarce resources and the creation of safety nets to counter the negative social impact of economic policy. Less attention has been given, however, to resolving long‐entrenched inequalities in society, to improving the productivity of labour and broad‐based access to productive capital. We illustrate one aspect of this discussion through a review of employment trends in the manufacturing sector in Mexico to show that, in spite of rapid job creation, lack of integration with the rest of the economy has generated overall poor employment results, partly a result of the failure of industrial policies to provide a timely response to the many challenges faced by opening up international competition. This case study helps us to support the claim that what is probably lacking in Latin America is a strategic approach to policy design to bring consistency between rapid changes in the economy and longer term development objectives, between the short and the long term, between stability and growth, and between rising productivity and improvement of welfare in the largest developmental sense.

Employment trends in the Mexican manufacturing sector

Abstract This paper seeks to contribute to the discussion of the welfare effects of structural reform in Mexico. Since the outbreak of the debt crisis in 1982, the Mexican government adopted comprehensive policies of stabilization and structural adjustment designed to reestablish macroeconomic stability and further the insertion of Mexico into the international economy. Contrary to predictions made by proponents of trade liberalization, the impressive increase in manufacturing exports has not translated into an equivalent strong increase in manufacturing employment. By comparing micro data from National Urban Employment Surveys, Economic Census and National Income Accounts, we conclude that employment creation in the manufacturing sector actually declined, especially in export-oriented sectors. Whatever employment was created in the manufacturing sector during the period of reform, it was mainly concentrated in the maquiladora sector and micro and small enterprises. Given its welfare implications, this is an issue that deserves careful re-evaluation.