The political economy of subnational economic recovery in Mexico

In an era when development processes seem best characterized by a continuing cycle of macroeconomic crisis and recovery, a critical question for students of the political economy of development concerns identifying the factors that facilitate recovery from economic shock. Recent work on this question has moved beyond a focus on specific macroeconomic policy adjustments toward analysis of the role political institutions play in shaping recovery processes. Applying this research to the experiences of Mexico's thirty-one states following the country's 1995 economic crisis, I identify significant variations in states' abilities to recover from crisis and link those variations in part to the country's uneven electoral transition to a multiparty democracy that coincided with the crisis. With more and more governmental activities increasingly being decentralized to lower levels of government, these findings provide an indication of the important role subnational variations in political environments can play in shaping the broader political and economic outcomes of Latin America's "dual transition."