flag Long abstract

Economic Survey of Mexico 2005: Improving conditions for business and investment

This Chapter proposes a number of policy measures which, in addition to human capital development, are the most promising to achieve higher productivity growth in Mexico. Many reforms have been undertaken over past years, but the benefits were less than expected, suggesting that some key elements were missing. The business sector would benefit from a reduction of regulatory and administrative burdens. Steps should also be taken to lift barriers to entry, including for foreign direct investment, and to foster effective competition throughout the economy: enhancing market access to potential competitors and ensuring a level playing field through better competition law enforcement are likely to encourage investment and innovation. Framework conditions for financing should ensure that even domestic-oriented firms of small and very small size have access to formal financial services in order to invest and grow. Finally, measures that facilitate labour mobility are needed to help transform human capital improvements into income gains.