In my new book, Revolution in Development: Mexico and the Governance of the Global Economy, I trace patterns of Mexican advocacy for international economic reform to argue that Mexican experts played a surprising, and overlooked, role in shaping some of the twentieth century’s most important international agreements and institutions. From the creation of the League of Nations in 1919 to the declaration of a New International Economic Order in 1974, Mexican experts could be found repeatedly arguing for equitable representation in international organizations and the redistribution of capital through multilateral institutions. Often assuming a self-appointed leadership role among other Latin American and Global South states, Mexican officials were frequently at the forefront of key struggles for a fairer global economy.
But while Revolution in Development writes forgotten Mexican actors back into the history of global economic governance, it is not a triumphant story merely intended to celebrate Global South resistance—and it’s also not a story of unbroken continuity across time. In fact, the book shows, Mexican advocacy for reforming international trade and investment systems was structured by the country’s access to foreign capital: as that access changed, so did the Mexican stance toward reform. More than a decade of fighting during the Mexican revolution had resulted in the destruction of property, the repudiation of debts, and the expropriation of landholdings of foreign investors. As a result, Mexico became a pariah in international financial markets, unable to secure new loans or float new bonds. From the 1920s to the 1940s, therefore, Mexican officials campaigned vigorously for new institutions that would facilitate access to credit on equitable terms, redistributing the surplus capital of the rich countries for the productive development of the poorer ones.
While these Mexican officials did not achieve all of their goals, their demands did play a key role in defining the very project of international development—and in creating institutions for it, like the World Bank. The early chapters of the book detail these Mexican demands and the ways they shaped the institutions that were (and were not) created at midcentury. Although US business interests defeated deeper and more comprehensive Mexican proposals for an Inter-American Bank or a reformed International Trade Organization, by the late 1940s Mexican experts and their allies had managed to convince US officials of the utility of institutions that would foster development and industrialization in Latin America and other parts of the Third World.
But once Mexico had managed to finally negotiate its outstanding debts—for mere pennies on the dollar—and capital began to flow through the new institutions, Mexican fervor for changing the economic order diminished. As economist Víctor Urquidi put it looking back on the period known as the Mexican Miracle, “Bretton Woods fitted very nicely into Mexico’s needs.” He was right: Mexico was one of the earliest and largest recipients of World Bank loans, and by 1970 World Bank disbursements to Mexico reached a staggering 14.2 percent of the Bank’s global lending total. What’s more, over the 1950s and 1960s, Mexico would also receive sizeable loans from the US Export-Import Bank and the Inter-American Development Bank, and benefit from rapidly growing levels of foreign direct and portfolio investment. Mexico returned to the international bond market in 1963, and by 1965, it had the highest credit rating of all developing countries. The post-revolutionary state that four decades earlier was a financial pariah had finally achieved the access to capital it had long desired.
As a result, Mexican officials during the 1950s and 1960s took a much less confrontational stance within the international economic order. They worked to blunt criticisms coming from more radical corners of the Third World, and sat out fights over the creation of new development institutions at the UN. When recently decolonized and socialist countries affiliated with the Non-Aligned Movement called for radically rethinking the international economic order in the 1960s, Mexican leaders worked to quietly maintain the status quo. At the crucial Conference on the Problems of Economic Development in Cairo in 1962, for example, the Mexican delegation was given instructions to “avoid any resolution critical of economic cooperation between the United States and Latin America.” By the beginning of the 1970s, Mexican officials defended the IMF from criticisms leveled by representatives of more radical governments in Chile and Peru. While the more radical countries argued for new institutions that would overturn established power structures, Mexican officials, wanting to keep investment capital flowing and creditors satisfied, advocated instead for working within them.
Mexico’s about-face on international economic reform during the 1950s and 1960s served to obscure its earlier history of contention, which has been largely forgotten. But it also structured the activism that would follow, when Mexican president Luis Echeverría introduced a wide-ranging response to the global economic crisis of the 1970s in the form of the UN Charter of Economic Rights and Duties of States. As part of the broader struggle for what was then called the New International Economic Order, Echeverría’s Charter drew on the ideas that had animated Mexican advocacy during the 1930s and 1940s, when fairer access to global trade and investment capital was the goal. But the negotiations over the Charter were also deeply structured by the more conciliatory period that preceded them, when Mexican officials sought to protect their country’s reputation as a good credit risk. In the contentious negotiations over the Charter, Mexican officials attempted to mediate between more radical Third World demands and the imperatives of the United States, Mexico’s most important creditor and export market.
By analyzing the causes and consequences of this change over time, Revolution In Development uncovers the long and uneven history of Mexico’s advocacy of international economic and financial reform—and therefore elaborates not just the possibilities presented by Mexican officials, but, perhaps more importantly, the means by which the alternative futures they imagined were foreclosed. As scholars today seek to globalize the field of international political economy and understand the potential for South-South cooperation and new rounds of reform, the lessons offered by the Mexican case can be instructive.
The set image is of the forty-nation Working Group of the United Nations Conference on Trade and Development (UNCTAD) on the Charter of Economic Rights and Duties of States that held its fourth session in Mexico City from 10 to 29 June. Left to right, at the presiding tables, during the plenary meeting: Mr. Jean Pierre Martin (UNCTAD Director in Charge of the IV Working Group Session); Mr. Gamani Corea (UNCTAD Secretary-General); and Ambassador Jorge Castañeda (President of UNCTAD IV Working Group). UN Photo archive, Unique Identifier UN7540795, Production Date June 10, 1974.