POL 10004, Fall 2001
Lecture 19 (10/26): Import-Substituting Industrialization (ISI)
in Mexico

I. From last time: the Mexican legislature
     PRI dominance
     Rules to allow some opposition, but not too much
 

II. Problem of industrialization
     Corruption of Porfiriato
     Twenty years of civil war
 

III. Mexican solution: Import-Substituting Industrialization (ISI)
     Context ("enclave economy")
          Traditional sector (mostly small-scale agriculture)
          Primary-product exporting sector
          Essentially all manufactures purchased from abroad
     Great Depression requires developing states to turn inward
     Necessity becomes strategy
          State seeks to develop industries to produce for domestic market
          Over time, a system develops
               Tariffs
               Subsidies
               Preferred credit to preferred industries
               State monopoly of foreign exchange (to keep currency value high)
               Usually increased social spending
 

IV. How does this relate to Mexican corporatism?
     Working class
     Resources for distribution
     Business sector
 

IV. Successful for a time, but some natural limitations
     Size of domestic market
     Politics of protection
     Quality troubles
     Raises demand for imports over time