ABSTRACT

Mexican growth, Ruiz argues, became increasingly tied to the flow of external financing during the 1960s and 1970s. Ruiz is on firmer ground in his welfare critique of general equilibrium analysis. Although seemingly adopting some elements of post Keynesian analysis, Ruiz suggests that neoclassical crowding out occurs. Ruiz argues that it takes an institutional approach to see how great the welfare impact of the domestic transfer is and will be. Another aspect of the politics of adjusting economic policy for maximum debt service, Ruiz points out, is the might of the private sector and its representatives within the government. Both trends, the growing power of financiers and the increasingly authoritarian nature of economic policy making, have been noted in a variety of Latin American countries. The political problem in all these cases, including the one Ruiz notes, stems from the Mexican government’s long-held commitment to free exchange convertibility and fixed exchange rates.