From State Developmentalism to Financial Populism: The ‘Bank of Welfare' and Mexico’s Moral Economy

Nadine Reis and Germán Vargas Magaña

Review of Political Economy, 2025, vol. 37, issue 3, 937-964

Abstract: The Mexican state-owned bank Banco del Bienestar (BB) — Bank of Welfare — has received a lot of attention for its role in the current Government’s ambitious political project to create an ‘alternative to neoliberalism’ and turn Mexico into a ‘moral economy’. This article analyzes the activities of Banco del Bienestar, with special attention to the recent economic crisis induced by the Covid-19 pandemic. We conclude that BB has followed a path from a state developmentalist-corporatist, to a neoliberal, to a postneoliberal, ‘financial populist’ model, under changing political cultures and with an increasing historical importance for state-society relations. The BB currently operates as a government-funded public entity serving the distribution of non-repayable social benefits to large, vulnerable population groups, while maintaining links with financial markets. We interpret this shift from the neoliberal to the financial populist era of public banking as consolidation of a ‘fix’ of neoliberalism’s failures, which is based on the definitive acceptance of the reality of development perspectives of the Global South. ‘Public purpose’ in this context becomes based on a social imaginary where the ‘public’ is comprised of those that are permanently taken care of by the paternalistic state.

Date: 2025
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DOI: 10.1080/09538259.2024.2319198

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