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Institutions and structural transformations in the North American economy

Abstract

It is often asserted that secure property rights and legal frameworks conducive to the functioning of markets are essential institutional foundations of a capitalist economy. It is sometimes even claimed that they are preconditions of economic growth. Efforts to implement those institutions have, however, produced heterogeneous outcomes for different groups of people. This dissertation considers the effects of two waves of institutional change in North America: the nineteenth-century privatization and subsequent alienation of communal property in the United States and Mexico and the late-twentieth-century neoliberal reforms in Mexico. Both episodes contributed to profound structural transformations in the North American economy. In the process of shaping important aspects of the present capitalist economies of Mexico and the United States, the above-mentioned institutional changes resulted in land loss, dispossession, the destruction of traditional livelihoods and, for many people, insertion into labor markets on the lowest rungs, with reduced autonomy, and with little or no job security. The dissertation examines three cases of communal property privatization. First, it considers the effect of the 1887 Dawes General Allotment Act on American Indian migration using data from the 1930 U.S. Census. The results suggest that individuals who were likely to have lost land due to allotment had a higher propensity to migrate to cities and to other states. Second, historical literature is reviewed to understand how the privatization of communal property under Mexico's 1856 Lerdo Law exacerbated land loss and inequality. That episode inspired subsequent efforts to reverse the effects of privatization through the creation of a new form of communal property known as ejidos during and after the Mexican Revolution. Third, the consequences of 1992 constitutional reforms allowing the privatization of ejidos are considered. The main finding is that municipalities with larger relative declines in ejido and agrarian community membership (as a percentage of population) and more land sales to non-ejido-members experienced larger increases in income inequality. Mexico's 1992 ejido reforms were part of a broader set of neoliberal reforms aimed at seamlessly integrating the country into the North American and global economies. Trade and investment regulations were liberalized, which contributed to the spread of cross-border production sharing or "offshoring" arrangements in the manufacturing sector. The last section of the dissertation considers the effects of those arrangements on employment volatility. The main finding is that reliance on offshoring-related revenues generally had a large, positive impact on manufacturing-sector employment volatility in Mexico over the 2007 to 2020 period. In contrast, trade that was not related to offshoring had, at most, a weak impact on volatility. The main policy implication is that attracting jobs in the labor-intensive stages of transnational manufacturing production processes may entail the risk of increasing employment volatility.

Description

2023 Summer.
Includes bibliographical references.

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Subject

ejidos
Mexico
property rights
maquiladoras
communal land
neoliberal reforms

Citation

Associated Publications