Journal Article

Spatial Dimensions of Trade Liberalization and Economic Convergence: Mexico 1985–2002

Patricio Aroca, Mariano Bosch and William F. Maloney

in The World Bank Economic Review

Volume 19, issue 3, pages 345-378
Published in print October 2005 | ISSN: 0258-6770
Published online December 2005 | e-ISSN: 1564-698X | DOI: http://dx.doi.org/10.1093/wber/lhi018
Spatial Dimensions of Trade Liberalization and Economic Convergence: Mexico 1985–2002

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This article employs established techniques from the spatial economics literature to identify regional patterns of income and growth in Mexico and to examine how they have changed over the period spanned by trade liberalization and how they may be linked to the income divergence observed following liberalization. The article first shows that divergence has emerged in the form of several income clusters that only partially correspond to traditional geographic regions. Next, when regions are defined by spatial correlation in incomes, a “south” clearly exists, but the “north” seems to be restricted to the states directly on the U.S. border and there is no “center” region. Overall, the principal dynamic of both the increased spatial dependency and the increased divergence lies not on the border but in the sustained underperformance of the southern states, starting before the North American Free-Trade Agreement, and to a lesser extent in the superior performance of an emerging convergence club in the north-center of the country.

Journal Article.  9943 words.  Illustrated.

Subjects: Development Planning and Policy

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