Volume 44, Number 174,
July-September 2013
Setbacks and Challenges for Social Policy in Mexico
José Narro Robles, David Moctezuma Narro
and Diego de la Fuente Stevens
THE REDISTRIBUTIONAL EFFECTS OF PUBLIC SPENDING

Inequality affects all countries, ranging from poor to wealthy and everything in between. This is an extraordinarily widespread phenomenon. Extreme poverty is less so, because it is uncommon in countries with effective public policies ensuring that their populations meet a basic standard of living. In this area, some nations have been more successful than others. However, in Mexico, policies aimed at combating poverty and inequality have not achieved desired results.

Figure 1, prepared by the oecd, is clear in this respect. It demonstrates that inequality levels, except in a few cases, are not so different between Latin America and Europe. But once the effect of taxes and transfers are applied – in other words, the results of public policy – inequality falls considerably in Europe, which cannot be said for Latin American nations, and of course, Mexico. It is evident that social policies in Latin American countries have been ineffective in building more equitable societies.


Figure 1. Gini Index in Mexico and Other Countries Following Tax Transfer
Source: Mexico Center, Organization for Economic Cooperation and Development (OCDE). Consulted on January 14, 2013, http://www.oecd.org/centrodemexico/15disminuciondelindiceginienmexicodespuesdelatransferenciadeimpuestos.htm.


Beyond its incapacity to diminish social and economic differences, social policy in Mexico has been unable to substantially reduce poverty. Figure 2, based on Coneval data, shows the total number of people living in poverty and extreme poverty before and after government aid to these populations. As can be seen, the majority of the population remains poor even following this assistance. The largest reductions (16%) are seen in rural populations living in extreme poverty. In other words, only a small fraction of the poor are able to overcome this condition as a result of government aid.


Figure 2. Poverty in Mexico With and Without Government Assistance, 2010


Source: “Poverty in Mexico and in the Federal States, 2008-2010,” Coneval.

Published in Mexico, 2012-2017 © D.R. Universidad Nacional Autónoma de México (UNAM).
PROBLEMAS DEL DESARROLLO. REVISTA LATINOAMERICANA DE ECONOMÍA, Volume 49, Number 192, January-March is a quarterly publication by the Universidad Nacional Autónoma de México, Ciudad Universitaria, Coyoacán, CP 04510, México, D.F. by Instituto de Investigaciones Económicas, Circuito Mario de la Cueva, Ciudad Universitaria, Coyoacán,
CP 04510, México, D.F. Tel (52 55) 56 23 01 05 and (52 55) 56 24 23 39, fax (52 55) 56 23 00 97, www.probdes.iiec.unam.mx, revprode@unam.mx. Journal Editor: Alicia Girón González. Reservation of rights to exclusive use of the title: 04-2012-070613560300-203, ISSN: pending. Person responsible for the latest update of this issue: Minerva García, Circuito Maestro Mario de la Cueva s/n, Ciudad Universitaria, Coyoacán, CP 04510, México D.F., latest update: Feb 23th, 2018.
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The online journal Problemas del Desarrollo. Revista Latinoamericana de Economía corresponds to the printed edition of the same title with ISSN 0301-7036