Publisher's Synopsis
This study examines how the poor were affected during the period of economic adjustment in Mexico in the 1980s and the early 1990s. The experience of Mexico with adjustment began shortly after its suspension of debt repayments in 1982. The Mexican economy initially suffered greatly from the effects of the adjustment policies and external shocks, but the early 1990s, moderate growth had returned and Mexico was viewed as a model of economic reform. However, the high social costs associated with adjustment caused many critics to question the status of Mexico as a model of reform. The decline in real wage rates and the reduction in expenditure on social services suggested that increased poverty was a consequence of reform. The study seeks to determine if poverty did, in fact, increase during the adjustment period. The question of the effect of economic adjustment on poverty is an important one in the literature of Economic Development as most Latin American and Sub Saharan African countries underwent some type of macroeconomic adjustment over the course of the 1980s and the 1990s. After examining the most promising theoretical arguments for why economic adjustment should be associated with increased poverty, this study examines the evolution of poverty rates in Mexico using a series of income-expenditure surveys which were administered during the adjustment period. As such, this study offers an important new contribution to the literature on the effects of adjustment on the poor. In addition to offering new insights into the results of the Mexican case, this study will be of interest to scholars hoping to anticipate the likely effects of the current economic reforms being instituted by the Asian economies.
