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Restoring Brad DeLong's belief in NAFTA?
Maybe this paper will help. The more globalized parts of Mexico -- most of all the north -- have done extremely well since NAFTA passed. The biggest problems remain in the least globalized parts, most of all the south and big chunks of the interior. The paper has just appeared in the new NBER book on globalization and poverty.
Posted by Tyler Cowen on July 14, 2007 at 07:01 AM in Data Source | Permalink
Comments
Since the north of Mexico has done so well, that would seem to undercut the argument of some people (like Caplan) that all those Mexican immigrants need to stay here because it helps the poor. On a global scale, Mexicans are not poor.
Posted by: Dennis Mangan at Jul 14, 2007 9:46:00 AM
Mexicans who migrate to the U.S. come predominantly from central and central-western states, not from Northern states.
If you plot distance to the US and migration rates by state, you will find an almost perfect curvilinear relationship. This is pretty much capturing per capita GDP (also a strong curvilinear relationship).
Maybe the question is why all these folks don't simply migrate to Northern Mexico? Then again, no mystery here - there is still a huge wage gap between what they would make even in one of the most affluent Northern towns, say Monterrey, and what they would make anywhere in the US.
Posted by: JB at Jul 14, 2007 9:52:46 AM
Yeah, Neuvo Laredo is really going like gangbusters. Or like drug gangs. Very international.
Posted by: RJ at Jul 14, 2007 10:59:14 AM
As it turns out, the nation of Mexico signed the NAFTA treaty. As a consequence, it only makes sense to look at how Mexico as a whole has done under NAFTA. The answer? Not very well. The September 2006, IMF WEO database provides all of the data needed to compare Mexico with a very long list of other nations.
Since 1994, Mexico’s economic growth rate has been 2.87% with per-capita growth of 1.37%. The comparable numbers for the US are 3.17% and 2.09%. For Chile 4.91% and 3.55%. For Venezuela 2.32% and 0.36%. For China 9.32% and 8.51%. For Korea 4.83% and 4.07%. For Taiwan 4.54% and 3.81%.
As you can see, Mexico has underperformed every country in my sample save for Venezuela.
As I have pointed on other occasions, Mexico’s economic growth in the post-WWII period was very high. Mexico grew at an average of 6.32% per year from 1945 to 1980. The shift to neoliberalism has been accompanied by much lower growth rates.
As for illegal immigration from Mexico, Mexico is a middle-income nation with a per-capita income of $10,700 dollars and a GDP of $1.149 trillion. Mexico is quite capable of taking care of its own population, although plenty of wealthy Mexicans would prefer to export Mexico’s population rather than expand opportunities at home. Of course, there is a strong reconquista lobby south of the border. Note that 95% of Mexico’s illegals had jobs before they left Mexico (according to the Pew Hispanic center).
Posted by: Peter Schaeffer at Jul 15, 2007 10:52:02 PM
cherry-picking much? I don't think anyone had ever been disposed to question that the export-promotion zones would do well out of NAFTA. The opposition to the agreement was always based on the case that it would be bad for the rest of the country, and that the bads would outweigh the goods. Since the outcomes since 1994 are roughly as Peter Schaeffer describes them, you're going to need something a bit better than this. Becoming "more globalised" is hardly an option for the south of Mexico - if it developed the key characteristic which has supported development in the North of Mexico, then it wouldn't be South any more.
Posted by: dsquared at Jul 16, 2007 3:51:26 AM
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Posted by: aizhengw at Jul 16, 2007 5:05:14 AM
The biggest problems remain in Michigan and Ohio, but DeLong seems
especially callous toward American blue collar workers.
Posted by: save_the-rustbelt at Jul 18, 2007 11:11:34 AM
The biggest problems remain in Michigan and Ohio, but DeLong seems
especially callous toward American blue collar workers.
Posted by: save_the-rustbelt at Jul 18, 2007 11:11:52 AM
To Peter Schaeffer: you're right that Mexico is above average by world standards, and that they're capable of taking care of their own. But in your economic growth #s, you've cherry-picked your sample. All of the asian countries are significantly higher IQ than mexico, so it's not at all surprising that they should grow faster. Chile (and to an even greater extent the US) is also higher IQ than mexico, as well as being freer economically. Only Venezuela is roughly comparable - and its per capita growth has been lower than mexico's per your numbers.
I agree with other posts you've made though that illegal immigration is a serious problem. I think that's another reason to favor free trade though - have you heard the quote "when goods can't cross borders, armies will."?
Posted by: pwyll at Jul 18, 2007 7:22:28 PM
IQ and Markets equals ecoomic success.
All you got to do is look at the academic
scores of Asia, latin america, and mexico to
know that there are different IQ leverls.
Korea, japan, taiwan IQ = 105. fast economic
growth.
Mexico IQ in usa, mexico averages to be about
85. A gap of 20 (twenty) points.
Half (50%) of mexicans in usa do not graduate
from high school
Nature has Never, Never and will Never create
Equality.
We have to live with the truth.
Nature has never, never created Equality
Posted by: josh stein at Mar 2, 2008 4:18:21 PM
