Trajectory of Capitalism in Mexico: Hierarchical Market Economy and the Role of the State

This paper adopts an analytical framework based on the literature of varieties of capitalism (VoC) by which to understand the trajectory of hierarchical market economy (HME) in Mexico, as well as the role played by the state in its endurance through notions like path dependence and institutional complementarities. Therefore, it explores the different historical stages in which the state designed and implemented diverse economic policies, which ultimately were unable to reverse the main features of a capitalism marked by hierarchy and heterogeneity. This framework is applied for the case of Mexico, also considering the current changes taking place in the country after a new government from a left-wing party was installed in the country in December 2018. Despite its calls to transform the nation, including an abandonment of the neoliberal model which prevailed in Mexico since the mid-1980s, this paper argues that the proposed changes need to take into consideration the historical role played by the state in the consolidation of the core features of a hierarchical market economy in the country. From its developmental role during the implementation of an import-substitution industrialization model between the 1940s and 1970s, to its alleged regulatory functions after the 1980s, the state played a key role in the consolidation of characteristics like the emergence and economic dominance of diversified business groups, together with large multinational corporations, and the manifestation of atomistic labor relations and a large informal sector. Hence, similar to other countries in Latin America that are also characterized by having HMEs, Mexico is a useful study case for comprehending the challenges faced by emerging economies in achieving a successful transformation of capitalism that could lead to finding ways of coordination and organization between actors in the pursuit of a new equilibrium, hence making sustained economic growth and socioeconomic development a reality in the long-term.補正完