Getting it right : strategic agenda reforms in Mexico.

274 Pages·2013·9.717 MB·English

by  OECD

Getting It Right
StRateGIc aGenda
foR RefoRmS In mexIco

Getting It Right
Strategic agenda
for reformS in mexico
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oecd (2013), Getting It Right. Strategic Agenda for Reforms in Mexico,
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Foreword
I
t gives me great pleasure to present this second edition of Getting it Right for
mexico. as never before, mexico has a historic opportunity to build consensus in
a number of areas that will make it possible to embark on far-reaching structural
reforms, representing a qualitative leap in the country’s development. the 13
Presidential decisions for mexico, contained in President enrique Peña nieto’s
message to the nation on taking office on 1 december in the national Palace,
laid the foundations for promoting those changes. these commitments have
been supported and developed in greater depth by the 95 commitments of the
Pact for mexico (Pacto por México), which was signed by the leaders of the main
political parties. the challenge now will be to turn those historical agreements
into decisions and practical policies. this study aims to support mexico tackling
that challenge, contributing analysis, comparisons, and recommendations in
the reform areas.
Getting it Right is one of the most complete toolkits that the oecd has
designed to help a country at the start of a new government administration. in
this publication, the focus of the organisation’s multidisciplinary knowledge
is on mexico; the discussion is enriched with international experience, and
comparison based on best practices. in addition, the report identifies the mexican
economy’s strengths and weaknesses so as to support the design, promotion and
implementation of key public policies for better economic performance.
this document is intended to assist President enrique Peña nieto’s
government in implementing a new generation of structural and comprehensive
reforms. the country urgently needs to build a responsive and robust fiscal
system that provides a solid financial basis for serving expenditure needs,
meeting economic and social challenges, and helping reduce inequalities. it
also needs a state-of-the-art education system; a budgetary process targeted on
long-term results; a more effective and fairer rule of law; a more dynamic and
inclusive labour market; a set of incentives that promote competition; an open
and effective national innovation system; an energy strategy with a long-term
getting it rigHt. Strategic agenda for reformS in mexico © oecd 2013 3
foreWord
vision; and a sustainable and high-quality health service. these are some of the
key challenges on which the new government will need to focus.
that President Peña nieto has decided to sign a memorandum of
understanding for a strategic partnership between mexico and the oecd, and
took time to attend a seminar with oecd experts during his visit to Paris to
consider some of these issues, are very positive signs of a serious commitment
towards a strategic agenda of structural changes for mexico. the oecd wants to
continue supporting that agenda.
i have had the opportunity to promote major reforms in various member
countries of our organisation – e.g. on taxes in Japan, education in the United
States, social policy in the republic of Korea, and competition in italy. it is an
honour for me, not only as oecd Secretary-general but also as a mexican, to
serve mexico and work with the administration that will be leading the country
for the next six years. as i told President Peña nieto, the new mexican government
should consider the oecd an extension of its own capacities.
a public policies forum, Mexico: Public Policies for Inclusive Development is
to be held in January 2013 in mexico city, co-ordinated by the oecd’s mexico
centre with support from other international organisations. i hope that this
study, in conjunction with the forum, will help enrich the debate and build the
consensus needed to promote the reforms discussed here and enable mexico to
improve its economic performance, reduce inequalities, and progress to a higher
development level, benefitting all its people.
angel gurría
oecd Secretary-general
4 getting it rigHt. Strategic agenda for reformS in mexico © oecd 2013
Acknowledgements
T
his report was prepared by the oecd in the context of the agreement
for a strategic alliance between mexico and the oecd for the 2012-2018
administration. it is part of the oecd series of publications Getting It Right, which
present a detailed assessment of the economic challenges faced by members
countries and partners at the time of a democratic transition and provide some
analysis and international comparisons to support the design of public policies.
Under the leadership of angel gurría, Secretary-general of the oecd, and since
its launch in 2006, these reports have become a valuable and effective tool for
new administrations.
the report 2012, both in english and Spanish, was coordinated by gabriela
ramos and an editorial team that includes Stéphanie guichard, mario López
roldán and José antonio ardavín.
Various officials of the oecd made valuable contributions in the various
stages of the preparation of the document, starting with the authors of the
individual chapters, listed in the index. We are grateful to the executive director
of the international energy agency, maria Van der Hoven, for the involvement
of the agency in this project. the staff of publications of the centre of the oecd
in mexico, and in particular, José antonio garcía and alejandro camacho, as
well as Bernardo Vázquez Perdomo, gilda moreno manzur and Juan carlos
gonzález provided valuable assistance in the editing of the Spanish version. in
Paris, randall Holden and Kostas Panagiotopoulos supported in the final stages
of editing.
getting it rigHt. Strategic agenda for reformS in mexico © oecd 2013 5

Table of Contents
Introduction
Gabriela I. Ramos and Stéphanie Guichard ............................. 13
chapter 1. Boosting Growth Potential
Sean Dougherty ......................................................... 25
chapter 2. Combating Poverty and Inequality
María del Carmen Huerta and Alessandro Goglio ...................... 41
chapter 3. Fiscal Policy to Support Inclusiveness
Sean Dougherty and Bert Brys .......................................... 63
chapter 4. Strengthening Governance at All Levels
Andrew Davies, Óscar Huerta Melchor, Stéphane Jacobzone,
Jack Radisch, Javier Sánchez-Reaza and Jacobo García Villarreal ...... 81
chapter 5. Improving Access to Formal Employment
María del Carmen Huerta and Pascal Marianna ....................... 105
chapter 6. The Challenges for the Education System
Diana Toledo Figueroa and Gabriela I. Ramos .......................... 121
chapter 7. Health Policy
Francesca Colombo, Ian Forde, Ankit Kumar, Valérie Paris
and Franco Sassi ........................................................ 141
chapter 8. Integrating Mexico into the World Economy through
Trade and FDI
Iza Lejarraga ............................................................ 155
chapter 9. Improving the Efficiency of the Telecommunication Sector
Agustín Díaz-Pines ..................................................... 173
chapter 10. SMEs and Entrepreneurship in Mexico
Jonathan Potter and Marco Marchese .................................. 187
getting it rigHt. Strategic agenda for reformS in mexico © oecd 2013 7
taBLe of contentS
chapter 11. Green Growth
Ivana Capozza, Brendan Gillespie, Katia Karousakis,
Reo Kawamura and Frédérique Zegel .................................. 207
chapter 12. Energy Policy
Ulrich Benterbusch and Joerg Husar – International Energy Agency ... 223
chapter 13. The Agriculture Sector and Rural Development
Jesús Antón ............................................................. 241
chapter 14. Making Water Reform Happen
Aziza Akhmouch, Céline Kauffmann and Xavier Leflaive .............. 251
Tables
table 8.1. Growth of GDP and exports .............................................. 157
table 8.2. Mexico’s international competitiveness in services ................. 167
table 10.1. Categorisation of entrepreneurship and SME
support framework ............................................................... 193
table 13.1. Agricultural indicators, 1995, 2010, .................................... 243
table 14.1. Multi-level governance gaps in Mexico’s water sector ............ 258
Figures
figure 1.1. Negative productivity growth has meant slow
income growth ..................................................................... 27
figure 1.2. GDP growth potential under different reform scenarios .......... 28
figure 1.3. Mexican product market regulation has declined ................ 33
figure 1.4. Administrative burdens on start-ups ................................ 34
figure 2.1. Income poverty trends, 1992-2010 ..................................... 43
figure 2.2. Risk of relative poverty of men and women by age, Mexico. . . . . . 44
figure 2.3. Maternal employment rate is associated with lower child
poverty rates ....................................................................... 46
figure 2.4. Nearly half of Mexicans have income difficulties and this
is rising because of the crisis ................................................... 48
figure 2.5. Income inequality (Gini coefficient) and relative poverty rates,
late-2000s ........................................................................... 49
figure 2.6. Public social expenditure (excluding education) in OECD
and emerging economies ....................................................... 50
figure 2.7. Share of cash transfers in household incomes ...................... 51
figure 3.1. Mexico’s social spending (excluding education) is low as
a share of GDP, 2009 .............................................................. 65
figure 3.2. Mexico’s fiscal balance and gross debt ............................... 66
8 getting it rigHt. Strategic agenda for reformS in mexico © oecd 2013