Mexican Exceptionalism: Globalization and De-Industrialization, 1750–1877

Abstract

Like the rest of the poor periphery, Mexico fought with de-industrialization in the century before the 1870s. Yet, Mexican manufacturing defended itself better than did the rest of the poor periphery. Why Mexicanexceptionalism? This article decomposes the sources of de-industrialization into productivity events abroad, globalization forces connecting Mexico to those markets, and domestic forces. It uses a neo-Ricardian model to implement the decomposition, advocates a price dual approach, and develops a new price and wage data base. Mexicanexceptionalismwas due to weaker Dutch disease effects, better wage competitiveness, and the policy autonomy to foster industry.