Mexico has not sustained higher rates of economic development, by a malfunction of the credit markets and distortions in the input source is not traded, and perverse incentives that cause lack of formality and create a drag on productivity growth.
“Over the last three decades, Mexico has aggressively reformed its economy, opening to foreign trade and investment, achieving fiscal discipline, and privatizing state owned enterprises. Despite these efforts, the country’s economic growth has been lackluster, trailing that of many other developing nations.”
There are a lot of reasons why Mexico isn’t rich but in the paper the author describe four as the principal reasons:
1. The failures in the provision of credit.
2. Informality and its link with social policy.
3. The lack of regulation and the unequal concentration of power in monopolies.
4. Vulnerability to foreign trade, particularly the export growth of China.

The granting of credit is critical to the economic development process. Without mechanisms to move savings from lenders to borrowers, the country is unlikely to seize opportunities for productive investment. one possibility is that Mexican law makes it particularly difficult for banks repossessed the defaulters and is linked to the other possible explanation is that lenders will not lend to people who perceive themselves as poor criteria or risky, due to the weakness of the law enforcement if they do not pay. Besides the capital returns are up to five times the market interest rate, demonstrating the difficulty of having credit available to small businesses.
Since the 1994–95 banking crisis, Mexico has overhauled its financial regulations. It has modernized accounting standards, permitted foreign ownership of banks, set reserves according to the riskiness of bank loan portfolios, modified deposit insurance, and sought to prevent insider lending.
In Mexico it seems that the labor market in the informal sector is more sought after than in formal employment, which may indicate that informality suppresses the accumulation of human capital.
Mexico is the country that is known to have higher electricity prices, high prices of telecommunications services, Internet services very expensive, and the shortage of skilled labor. The high prices of telecommunications services down capital accumulation and innovation. This is because monopolies, they do not have market competition raise their prices and the consumer has to match the prices offered by the bidder.
For Mexico, growth in China is more threatening than for other countries in Latin America. Other American countries tend to export minerals, agricultural products and other raw materials, which import from China. In Mexico its global economic fortunes are tied to the industry. The expansion of China has exerted downward pressure on Mexico in terms of terms of trade as most of its imports come from this country and do not compare to the amount of exports to Mexico sells. The most appropriate in this case (as in most other countries) is that Mexico bought from china an amount close to what this will sell them Mexico would generate something more stable to Mexico.
Mexico has a lot of economic troubles, unfortunately in the a few occasions when the government has the possibility to do something or have the capital to do it, the avarice and the bad decisions of our leaders take the country to a really bad situation. It is too hard to see how the person who almost all the country chose to represent us is pushing down our country. Also unfortunately all the reforms the government is trying to implement and in some cases already apply, these are disadvantaging the Mexican people and while a few get rich with them.