acknowledges with pleasure financial support from the Harvard Faculty of Arts and Sciences. The views expressed herein are those of the author(s) and do not necessarily reflect the views of the National Bureau of Economic Research. NBER working papers are circulated for discussion and comment purposes. They have not been peerreviewed or been subject to the review by the NBER Board of Directors that accompanies official NBER publications.

Like the rest of the poor periphery, Mexico had to deal with de-industrialization forces between 1750 and 1913, those critical 150 years when the economic gap between the industrial core and the primary-product-producing periphery widened to such huge dimensions. Yet, from independence to mid-century Mexico did better on this score than did most countries around the periphery. This paper explores the sources of Mexican exceptionalism with de-industrialization. It decomposes those sources into those attributable to productivity events in the core and to globalization forces connecting core to periphery, and to those attributable to domestic forces specific to Mexico. It uses a neo-Ricardian model (with non-tradable foodstuffs) to implement the decomposition, and advocates a price dual approach, and develops a new price and wage data base 1750-1878. There were three forces at work that account for Mexican exceptionalism: first, the terms of trade and Dutch disease effects were much weaker; second, Mexico maintained secular wage competitiveness with the core; and third, Mexico had the autonomy to devise effective ways to foster industry. The first appears to have been the most important. Rafael Dobado GonzalesAurora Figure 1 and Appendix 1). This was a very big terms of trade boom, but Latin American experience was hardly unique since the increase was even bigger for Egypt, the Ottoman Empire (Turkey), Japan, Indonesia, and elsewhere in the periphery.During the terms of trade boom, rates of technological advance and human capital accumulation were so modest in the periphery that the living standard gap between it and the core surged to levels that were vastly wider at the end of the boom than at the beginning. Whether the modest rates of technological advance and human capital accumulation in the periphery were caused by de-industrialization has, of course, been a central issue in historical debate since it all 5 started. What all scholars agree on, however, was that the terms of trade boom caused deindustrialization in the periphery through Dutch disease and other effects.This paper establishes that Mexico obeyed the same laws of motion between 1750 (just before the Bourbon reforms) and 1879 (before the economic changes of the Porfiriato began).However, the differences between Mexico and the rest of the poor periphery were sufficiently pronounced to allow us to speak of Mexican exceptionalism. The rate of de-industrialization was far less than elsewhere in the periphery, suggesting that there were local forces at work that distinguished Mexican experience from the rest. Section 2 places de-industrialization withinMexican growth experience over almost two centuries after 1700. Section 3 describes Mexican de-industrialization and industrialization over more than a century before the Porfiriato. Section 4 presents a three-sector neo-Ricardian model with two tradables (silver exportables and textile importables) and one non-tradable (corn) which makes it possible to sort out the role of external terms of t...

Like the rest of the poor periphery, Mexico fought with de-industrialization in the century before the 1870s. Yet, Mexican manufacturing defended itself better than did the rest of the poor periphery. Why Mexicanexceptionalism? This article decomposes the sources of de-industrialization into productivity events abroad, globalization forces connecting Mexico to those markets, and domestic forces. It uses a neo-Ricardian model to implement the decomposition, advocates a price dual approach, and develops a new price and wage data base. Mexicanexceptionalismwas due to weaker Dutch disease effects, better wage competitiveness, and the policy autonomy to foster industry.

This article studies the evolution of business in Mexico from the Revolution (1910–1920) to the early 1980s, a period when the state played a major role in the economy and undertook nationalistic policies. It explores the development of distinctive features that characterize business in Latin America: the importance of family-owned diversified business groups and immigrants, the prominence of illegal business, the central role of the entrepreneur, and the greater need to forge ties with government agents for company success. We argue that while some of these features had existed earlier, during this era they took the form that has prevailed until the present day.