Big Business, The State, and Free Trade

Abstract

Many existing theories of economic liberalization fail to account for Mexico's experiences. Why has the Mexican government risked alienating its primary constituencies by pursuing trade opening and joining NAFTA? Big Business, the State, and Free Trade develops a general explanation of trade policy coalition politics and uses it to explain the opening of Mexico's economy. It emphasizes the role of business and state actors in constructing competing trade policy coalitions. The book traces the formation and relative strength of a protectionist and a free trade coalition across a series of policy episodes from the 1970s to the 1980s. It pays particular attention to the North American Free Trade Agreement, which consolidated a strong free trade coalition between big business and state elites. The conditions that strengthened the free trade coalition have also contributed to higher levels of political and economic instability since 1994. Coalition politics is likely to become more important as Mexico's political system democratizes.

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