Mexico's Election Could Leave Its Economy in Limbo — No Matter Who Wins

When Felipe Calderon handed the presidential sash to Enrique Pena Nieto on December 1, 2012, Mexico’s economy was just pulling out of a four-year slump. The oil sector, which covered roughly a third of the federal budget, was in decline, production down nearly 1 million barrels a day and falling fast. Monopolies and oligopolies made everyday transactions cost up to 40 percent more than if markets were more open. Mexico’s infrastructure lagged its emerging market peers; its students languished at the bottom of developed-country rankings. And more than half of its workers toiled off the books, with few benefits or legal protections.

As Pena Nieto gets ready to hand the sash to another, growth has returned -- averaging a respectable if underwhelming 2.4 percent a year. Foreign direct investment is also back, with tens of billions of dollars pouring into autos, telecommunications and energy. But for Mexico to really change, the ambitious reform project of the last five years needs to deepen. And the government’s other failures have undermined the very model that can brighten Mexico’s economic future, making any such deepening much less likely.