Mexican Miracle

The term Mexican miracle is used in common speech, but not by economists, to refer to the country's inward-looking development strategy that produced sustained economic growth of 3 to 4 percent and modest 3 percent inflation annually from the 1940s until the 1970s.

An important factor helping sustained growth in the period 1940–1970 was the reduction of political turmoil, particularly around national elections, with the creation of a single, dominant party. In 1946, the party founded by Plutarco Elías Calles in the wake of President-elect Álvaro Obregón's assassination in 1928 changed its name to the Institutional Revolutionary Party. With the party's presidential choice in 1946, Miguel Alemán Valdés, Mexico elected its first civilian president since Francisco I. Madero in 1911. The subsequent elections of Adolfo Ruiz Cortines (1952–58) and Adolfo López Mateos (1958–64), Gustavo Díaz Ordaz (1964–70) there were no political opposition challenges to the government's implementation of economic programs.

During the presidency of Lázaro Cárdenas, there were significant policies in the social and political spheres that had impacts on future economic policies in Mexico, in particular nationalization of oil in 1938, as well as land reform, and nationalization of railways. Cárdenas was succeeded by the politically more moderate Manuel Ávila Camacho, who initiated a program of industrialization in early 1941 with the Law of Manufacturing Industries. One scholar has called the inaugural date of this law "the birthday of the Institutional Revolution," since it was the inception of import-substitution industrialization. Further legislation in 1946 under President Miguel Alemán Valdés, the Law for Development of New and Necessary Industries, was passed.

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