On neoliberalism and corruption


Going back to the formulas of the failed heterodox model (with a lot of interventionism, inflationism, leadership and statism), would be equivalent to national suicide.

Surprisingly, President López Obrador declared: “… if the neoliberal model were applied without corruption, it would not be all bad…”

In Mexico, it has been known for decades that corruption is one of the main obstacles facing our economic development. But our endemic corruption is not mainly attributable to the so-called neoliberal model, but to two other causes: the lack of democratic development and the forms of statist economic organization. During the six-year terms of Echeverría and López Portillo, corruption was unleashed thanks to the very broad parastatal apparatus that was created, with hundreds of companies, trusts, and public sector entities. To a very large extent, Pemex and the CFE are bottomless barrels thanks to the looting to which they have been subjected by a rapacious bureaucracy and also unpunished.

As far as the fact that the neoliberal model is not “completely bad”, many Mexican economists have known this since 1982, when the development model, let’s call it heterodox, fell into an almost terminal crisis, at the end of Echeverría’s so-called “tragic dozen”. and Lopez Portillo. So much was the destruction, that it was not possible to fully resume the path of progress that the country had taken during Stabilizing Development, in seven six-year terms of efforts in the right direction, although of insufficient effectiveness. But trying to return to the formulas of the failed heterodox model (with a lot of interventionism, inflationism, leadership and statism), would be equivalent to national suicide. In the world order, humanity learned of the infeasibility of the nationalized economy model based on central planning, with the fall of communism and the Soviet Union.

In a purely practical order, in today’s Mexico the galloping antagonism of the 4T government against the neoliberal model was not fully understood. The formulas of the neoliberal strategy are the only ones that have worked for the current administration, without raising a hurricane of criticism. One of them, notably, the continuation of the commercial opening through the signing of the T-MEC. And in that order of favorable results, there is also fiscal and monetary discipline, the floating exchange rate regime, control of foreign debt and respect (reluctantly) for the autonomy of the Bank of Mexico. But unfortunately, not everything in terms of economic policy has been neoliberal congruence. For example, the cancellation of investments and the attempted monopolization in the electricity sector…

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Bruno Donatello

Columnist

economic debate



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