Mexico Policy Notes

This note presents an overview of
Mexico's forthcoming reform agenda-from the World
Bank's vantage point. It distills the main messages in
the policy notes that make up this compendium. The purpose
is not to provide definitive answers to the many policy
questions likely to occupy the New Mexican administration,
or to provide a comprehensive account of progress to date
and policy recommendations. Instead, it is to provide a view
of the main challenges facing Mexico in its quest for
inclusive and sustainable growth-and to propose feasible
policy options to address them. Mexico has achieved
remarkable economic and social progress over the past
several decades. The country has become an investment grade
borrower with solid global standing in capital markets. It
is a model of financial and commercial integration and of
prudent macroeconomic management. The economic literature
offers several explanations for Mexico's low
productivity growth. An underdeveloped financial system,
labor market rigidities, high informality, scarce skilled
labor, regulatory barriers for doing business, and weak
innovation and limited market competition are often cited as
binding constraints to productivity growth. Mexico faces
challenges as it seeks to develop a labor market that
protects workers, creates more and better jobs for men and
women, and improve their long term standard of living.
Finally, a comprehensive system for tracking and monitoring
progress and environmental pressures needs to be developed.