Table Of ContentGOVERNMENT-
BUSINESS RELATIONS
AND REGIONAL
DEVELOPMENT IN
POST-REFORM MEXICO
THEODORE KAHN
Latin American Political Econom
Latin American Political Economy
Series Editors
Juan Pablo Luna
Pontificia Universidad Católica de Chile
Macul, Santiago, Chile
Andreas E. Feldmann
University of Illinois at Chicago
Chicago, IL, USA
Rodrigo Mardones Z.
Pontificia Universidad Católica de Chile
Macul, Santiago, Chile
Latin American Political Economy publishes new, relevant, and e mpirically-
grounded scholarship that deepens our understanding of contemporary
Latin American political economy and contributes to the formulation and
evaluation of new theories that are both context-sensitive and subject to
broader comparisons. Inspired by the need to provide new analytical per-
spectives for understanding the massive social, political, and economic
transformations underway in Latin America, the series is directed at
researchers and practitioners interested in resurrecting political economy
as a primary research area in the developing world. In thematic terms, the
series seeks to promote vital debate on the interactions between economic,
political, and social processes; it is especially concerned with how findings
may further our understanding of development models, the socio-political
institutions that sustain them, and the practical problems they confront. In
methodological terms, the series showcases cross-disciplinary research that
is empirically rich and sensitive to context and that leads to new forms of
description, concept formation, causal inference, and theoretical innova-
tion. The series editors welcome submissions that address patterns of dem-
ocratic politics, dependency and development, state formation and the
rule of law, inequality and identity, and global linkages. The series editors
and advisory board members belong to Red para el Estudio de la Economía
Política de América Latina (REPAL) (http://redeconomiapoliticaamlat.
com/). Advisory Board Ben Ross Schneider Andrew Schrank
More information about this series at
http://www.palgrave.com/gp/series/14825
Theodore Kahn
Government-Business
Relations and
Regional
Development in
Post-Reform Mexico
Theodore Kahn
School of Advanced International Studies
Johns Hopkins University
Washington, DC, USA
Latin American Political Economy
ISBN 978-3-319-92350-5 ISBN 978-3-319-92351-2 (eBook)
https://doi.org/10.1007/978-3-319-92351-2
Library of Congress Control Number: 2018950481
© The Editor(s) (if applicable) and The Author(s), under exclusive licence to Springer
International Publishing AG, part of Springer Nature 2019
This work is subject to copyright. All rights are solely and exclusively licensed by the
Publisher, whether the whole or part of the material is concerned, specifically the rights of
translation, reprinting, reuse of illustrations, recitation, broadcasting, reproduction on
microfilms or in any other physical way, and transmission or information storage and retrieval,
electronic adaptation, computer software, or by similar or dissimilar methodology now
known or hereafter developed.
The use of general descriptive names, registered names, trademarks, service marks, etc. in this
publication does not imply, even in the absence of a specific statement, that such names are
exempt from the relevant protective laws and regulations and therefore free for general use.
The publisher, the authors, and the editors are safe to assume that the advice and information
in this book are believed to be true and accurate at the date of publication. Neither the
publisher nor the authors or the editors give a warranty, express or implied, with respect to
the material contained herein or for any errors or omissions that may have been made. The
publisher remains neutral with regard to jurisdictional claims in published maps and
institutional affiliations.
Cover image © Keith Dannemiller / Alamy Stock Photo
Cover design: Laura de Grasse
This Palgrave Macmillan imprint is published by the registered company Springer Nature
Switzerland AG
The registered company address is: Gewerbestrasse 11, 6330 Cham, Switzerland
A
cknowledgments
It has been a privilege to spend several years of my life working on a
research project of my own choosing (even though it has not always felt
that way). I am therefore grateful to everyone who made the opportunity
possible, beginning with my parents, Judith and Steven, and my sister,
Lissy, for their unconditional support and consistent encouragement to
pursue my interests, wherever they may take me.
This book developed out of my Ph.D. dissertation at the Johns Hopkins
University School of Advanced International Studies, where I was fortu-
nate to have outstanding mentors and advisers. Riordan Roett, who intro-
duced me to Latin American Studies when I entered SAIS in the Fall of
2009, guided me through each stage of my doctoral studies with wisdom,
insight, and humor. Francisco González provided innumerable lessons on
Mexican politics, history, and culture and, even more importantly, showed
me what it means to pursue scholarly research with passion. Robert Devlin
has been an invaluable teacher and mentor for many years, and his work
has shaped my thinking on many of the topics central to this book. Ling
Chen provided incisive comments, suggestions, and questions during the
research and writing process, which resulted in major improvements to
this manuscript. I would also like to thank Brian Levy, Peter Lewis,
Matthias Matthijs, and Bruce Parrott, each of whom provided encourage-
ment, advice, and inspiration during various stages of my time at SAIS.
In Mexico, numerous people made important contributions to this
book during the nearly two years I spent in the country. I am grateful to
everyone I met in Puebla, Querétaro, and Mexico City who helped me
understand the country in general and the puzzle of divergent subnational
v
vi ACKNOWLEDGMENTS
development in particular. Ernesto López-Córdova welcomed me into his
office in the Secretaría de Hacienda during my first week of field work in
2015, and our early conversations were instrumental in shaping the proj-
ect. In Puebla, Socorro López Espinosa graciously devoted hours of her
time to sharing her truly remarkable knowledge of the state’s economy,
politics, and history with me. Rodolfo Loyola Vera provided equally
important insights into Querétaro and generously introduced me to con-
tacts across the political spectrum.
I am especially thankful for the generosity, support, and friendship of
José Luis García Aguilar, who first invited me to Puebla in 2014 to teach a
summer course at the Universidad Iberoamericana. My time at the Ibero
Puebla, including subsequent stints as a Visiting Professor, was a formative
professional, academic, and personal experience that I will always remem-
ber fondly. I am indebted to all my former colleagues at the Ibero, espe-
cially Juan Luis Hernández Avendaño and Elena Ayala Galí, who contributed
to this project in many ways.
One of the best parts of researching and writing this book has been the
relationships I forged and deepened with my colleagues at SAIS. Neil
Shenai encouraged me to pursue a Ph.D. with the enthusiasm only he is
capable of and accompanied me at each stage of the process as a trusted
advisor, sharp critic, and unconditional friend. Andrew Whitworth, Ryan
Connelly, and Khalid Nadiri all provided, in their own ways, invaluable
advice, perspective, and friendship during my years at SAIS.
Finally, thank you to María for your love, companionship, patience, and
support during this journey and those to come.
c
ontents
1 Introduction 1
1.1 Why Puebla and Querétaro? 5
1.1.1 Initial Conditions 5
1.1.2 Economic Divergence Between Puebla and
Querétaro 7
1.2 R esearch Design and Methodology 12
1.2.1 Comparing Subnational Economies 13
1.3 R elevance for Mexico and Beyond: Theory and Practice 14
1.4 P lan of the Book 16
References 21
2 Governing Subnational Economies 27
2.1 T he Territorial Dimension of Economic and Political
Reform 27
2.1.1 Local Responses to Economic Reforms 28
2.1.2 Localization and Globalization in the World
Economy 29
2.2 I nstitutions and Development 30
2.2.1 Business as a Political Actor 31
2.2.2 Varieties of Capitalism 33
2.3 A Subnational View of Political Institutions and
Development 33
2.3.1 Less Stateness 34
2.3.2 Focus on Firms 35
vii
viii CONTENTS
2.3.3 The (Diminishing) Role of Labor 36
2.3.4 National Reforms as Existential Threat 37
2.4 T he Argument 37
2.4.1 Differences in the Private Sector 38
2.4.2 Differences in Organized Labor 41
2.4.3 Governors’ Responses to National-level Reform 42
2.4.4 Subnational Institutional Divergence and Its
Economic Consequences 44
2.5 A lternative Explanations 46
References 55
3 Origins and Consequences of Divergent Private Sector
Organization in Puebla and Querétaro 61
3.1 O rganized Business in Mexico 63
3.1.1 Reconfiguration of Government-Business Relations 64
3.1.2 Government-Business Relations in the States 66
3.2 E xplaining Business Sector Divergence in Puebla and
Querétaro 67
3.2.1 Economic Change 67
3.2.2 Effects on Business Associations 69
3.2.3 Explaining the Participation (or Not) of Large
Firms 74
3.3 P references of Local Business in Puebla and Querétaro 75
3.3.1 Political or Economic Opinions 75
3.3.2 Preferences on Economic Issues 77
3.3.3 Unity or Division in the Private Sector 79
3.4 C onclusion 81
References 86
4 Building Institutions for Cooperation in Querétaro,
1979–1991 89
4.1 T he Unlikely Origins of Global Economic Success: Querétaro
Under Rafael Camacho Guzmán 90
4.1.1 A New Business Class 91
4.1.2 Emergence of Tripartite Cooperation 93
CONTENTS ix
4.1.3 Institutionalizing Coordination to Manage
Economic Shocks 95
4.1.4 Political Calm Prevails 97
4.2 R esults of the Camacho Guzmán Administration 98
4.3 P reparing for Global Competitiveness: Querétaro Under
Mariano Palacios Alcocer 99
4.3.1 Local Adjustment to Global Integration 101
4.3.2 Bringing Labor on Board 102
4.3.3 Sharing the Burden of a New Economic Shock 103
4.3.4 Policy Actions to Support Global Integration 105
4.4 R esults of the Palacios Administration 106
4.5 C onclusion 107
References 115
5 Partisan Rivalry Between Government and Business in
Puebla, 1981–1993 117
5.1 B ackground: A History of Social Conflict and Interlude
of Calm 118
5.1.1 A Divided Private Sector 119
5.2 E conomic Shock and Renewal of Government- Business
Conflict Under Guillermo Jiménez Morales 120
5.2.1 An Election Battle Between Government and
Business 122
5.2.2 Post-election Appeasement: Political Calm But
Modest Economic Progress 123
5.2.3 Firm- and Sector-Level Adjustment 125
5.2.4 Return of Electoral Conflict 127
5.3 R esults of the Jiménez Morales Administration 128
5.4 L ocal Crony Capitalism Under Mariano Piña Olaya 129
5.4.1 Conflict and Corruption at the End of the Piña
Olaya Government 130
5.4.2 Private Sector Adjustment Outside of Local
Institutions 132
5.5 R esults of the Piña Olaya Administration 136
5.6 C onclusion 137
References 144
