ABSTRACT
In the early 1980s Mexico experienced one of the worst economic crises in its history. Toward the end of the nineteenth century, the United States became Mexico's principal source of foreign investment and has maintained that position ever since. Mexico's traditional need to seek money from foreigners is rooted in its limited capacity to generate sufficient internal capital to fuel the economy and provide revenues for government operations. The influx of foreign investment capital during the decades following independence turned out to be less perilous politically than the externally obtained loans or the outstanding claims for property losses constantly submitted by foreigners. Foreign capital flowed rapidly into Mexico's interior after 1821. As foreign firms increased their participation in Mexico's economy, the cost of importing technology rose, causing balance-of-payment problems. The Mexican government found it increasingly difficult to regulate technology transfers, trademarks, and patents, which, given Mexico's acute underdevelopment in science, technology, and innovation, presented a major challenge.
