201. In Praise and Criticism of Mexico's Pension Reform
- Author:
- L. Jacobo Rodriguez
- Publication Date:
- 04-1999
- Content Type:
- Working Paper
- Institution:
- The Cato Institute
- Abstract:
- The privatization of Mexico's government-run pay-as-you-go social security system, which went into effect in July 1997, is the Ernesto Zedillo administration's most important structural reform. It is a measure that, if successful, will help bring much-needed social and economic stability. The Mexican peso crisis of 1994–95 underscore d the fragility of Mexico's economy, its need for independent institutions, and its need for a large pool of long-term domestic savings. An increase in the rate of private savings in Mexico, which this reform will promote, would make the Mexican economy less dependent on short-term fluctuations of international capital flows and, thus, more stable. More important still, the privatization of social security will erect one of the basic pillars of a free society by turning Mexico into a country of property-owning workers.
- Topic:
- Economics, Government, International Political Economy, and Privatization
- Political Geography:
- Latin America and Mexico