Rentier States and Geography in Mexico's Development

Roberto Blum and Alberto Díaz Cayeros

No 3139, Research Department Publications from Inter-American Development Bank, Research Department

Abstract: This paper provides a long-term historical and econometric account of the way in which geography has shaped development in the Mexican states. The emphasis is placed on the way in which the natural geography is reinforced by political decisions, which configure the human geography of population density, urbanization and public good provision, which in turn determine income, growth and poverty. The paper presents brief historical instances of how geography has determined prospects for development at different moments in Mexican history. This anecdotal discussion seeks to highlight the intrinsic link of geography with political institutions, which is central to understanding the economic effects of geography. The paper then presents a descriptive statistical and geographical profile of the relationship between geography and development in Mexico. The paper argues that the main channel through which geography affects development is political. The fragmentation of political jurisdictions in the form of municipal governments constitutes a proxy for man-made barriers to geographic mobility, which explain the interaction between geography, politics and development.

Date: 2002-03
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