My good friend, the ever-reliable, ever-intelligent Kevin Grier, writes to me the following about Mexican economic growth:
I believe the primary two problems with mexico are both political (1) very little real competition in the domestic economy (2) no true rule of law. Fundamentally its still a society where personal connections or bribes get lots of things done. The “ideal” of everyday anonymous transactions working out well even when there are time intervals between beginning and end (payment and reward) just is not there.
Also the Mexican civil war at the beginning of the 20th century probably had something to do with the low growth in the first half of the century. That was no joke, that war. The “golden years” could easily be high transitional growth getting back on the BGP after the devastation of the civil war, kind of Mexico’s mini version of the Japanese and German growth miracles after WWII.
imho Mexico is middle income due to “location location location” and is still chained to an almost feudal social and political system.
More specifically, Kevin points out that the available data show Mexican convergence to the U.S. from 1950-75, and from 1870-1900, but not for the twentieth century more generally, I offer apologies for my previous error.