Economic Polarization Through Trade: Trade Liberalization and Regional Growth in Mexico

Ravi Kanbur and Anthony J. Venables

in Spatial Inequality and Development

Published in print February 2005 | ISBN: 9780199278633
Published online April 2005 | e-ISBN: 9780191602191 | DOI:

Series: WIDER Studies in Development Economics

 Economic Polarization Through Trade: Trade Liberalization and Regional Growth in Mexico

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Analyses the impact trade liberalization and economic integration have had on regional growth and regional disparities in Mexico over the last two decades. It is highlighted that the passage from an import substitution system to membership of the General Agreement on Tariffs and Trade (GATT) first, and to economic integration in the North American Free Trade Agreement (NAFTA) later, has been associated with greater concentration of economic activity and territorial polarization. The analysis also shows that these changes herald a period of transition between two growth models. Regional growth in the final stages of the import substitution period was mainly characterized by convergence and linked to the presence of oil and raw materials and proximity to Mexico City. Economic liberalization and regional integration in NAFTA has been related to regional divergence, a reduction of the importance of Mexico City as the main market and to the emergence of an economic system in which the endowment of skilled labour starts to play a more important role.

Keywords: economic growth; integration; Mexico; polarization; regional disparities; trade

Chapter.  9488 words.  Illustrated.

Subjects: Economic Development and Growth

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