Economic Liberalisation and the Evolution of Income Distribution

The book explores the effects of the internationalisation of economies on income distribution through a global analysis and a relevant country case, Mexico. The global analysis illustrates that, of the set of economic norms that dominated the political economy during the 1980s and mid-1990s, low inflation and the promotion of employment reduce inequality, FDI increases it and trade exerts a weak benefit on income distribution. The study also shows a direct relationship between economic growth and income inequality. The country case indicates that inequality has tended to increase in post-reform Mexico, mainly due to the rise in skill premium, the fall of unionisation rates, deterioration of the agricultural sector, the rise of services, and capital concentration. The set of socio-political norms that have been promoted by multilateral institutions since the mid-1990s, as an addition to the original orthodox prescription, represents an improvement of the economic liberalisation process. In this respect, domestic efficiency, government expenditure, and education mitigate the adverse effect of economic liberalisation.