Why Regions Fail in Mexico  
Thursday, May 2, 2013
Daron Acemoglu and James Robinson

James was asked by Mexican Senator Zoé Robledo of the political party the PRD how to apply the ideas from our book to explain within country variation. Senator Robledo is from Chiapas, the poorest and most unequal state in Mexico.

Why, Senator Robledo wanted to know? Reasonable question.

We do talk quite a bit about regional inequality in the book, for example about how the US South was poorer than the North because the South had more extractive institutions. We also examine regional inequality in Argentina pointing out that the northwest, where in contract to Buenos Aires and the Pampas there we dense populations of indigenous peoples at the time of the conquest of the Americas.

In consequence such states as Salta and Tucumán had many of the extractive institutions of colonial Spanish America like the encomienda. Today these parts of Argentina are much poorer than Buenos Aires and the places which were neglected during the colonial period (until the Bourbon reforms of the 18th century the Spanish actually made it illegal to export anything from Buenos Aires, instead, if anyone was crazy enough to want to do this, they had to ship it over the Andes and export it from Perú!).

But in Why Nations Fail we don’t talk about this issue in Mexico. So how might we explain why Chiapas other Southern states like Oaxaca and Guerrero are much poorer and more unequal than the Mexican average?

Here is a link to the speech that James Robinson gave at the Mexican Senate last Tuesday in Mexico City trying to tackle this question.

Though we don’t want to spoil the suspense, it turns out that it is because these states have more extractive institutions than the rest of Mexico (a bit like the US South really).

Article originally appeared on Why Nations Fail by Daron Acemoglu and James Robinson (http://whynationsfail.com/).
See website for complete article licensing information.