High Price for Change: Privatization in Mexico (Inter-American Development Bank)

A decade ago, the Mexican government abandoned its role as owner of diverse enterprises and began to focus efforts on the population's most pressing needs: drinking water, health, education, agriculture, nutrition, housing, the environment, infrastructure and the administration of justice. The aim was to transform a paternalistic government into a supportive government--governing for all, but working harder for those who have less. Did it succeed?

In High Price for Change, a leading economist tells the full story behind Mexico's program of divestitures. After describing the principal problems of privatization, the author goes on to assess its macroeconomic impact on Mexico's government finances, balance of payments, and financial markets; and its microeconomic effects on employment, profits and productivity. Rogozinski explains why the sale of state-controlled enterprises was desirable, not only economically, but also from a social perspective, and analyzes the benefits and costs of this program, which laid the foundation for the country's modernization.

Jacques Rogozinski, former executive director of the Office of Privatization in Mexico, ex-president of the National Public Works Bank (BANOBRAS) and of the National Trust Fund for Tourism Development (FONATUR), is the Special Advisor for Private Sector Issues at the IDB.