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Mexico: Social Spending
Country Study > Chapter 2 > The Society and Its Environment > Structure of Society > Social Spending

SOCIAL SPENDING


Analysts have offered widely varied assessments of the magnitude of poverty in Mexico. The United Nations Economic Commission for Latin America and the Caribbean estimated in 1989 that 39 percent of all Mexican households were in poverty, including 14 percent in extreme poverty (indigence). The National Solidarity Program (Programa Nacional de Solidaridad -- Pronasol) reported that 51 percent of the population in 1987 fell below the poverty line, of which 21 percent were extremely poor. Mexican author Julieta Campos asserted that approximately 60 percent of all Mexicans in 1988 were poor, including 25 percent indigent.

Despite these numerical differences, analysts generally agree on basic trends and characteristics. First, poverty levels declined in the 1960s and 1970s but escalated in the wake of the economic crisis that began in 1982 and continued for most of that decade. For example, Pronasol estimated that poverty levels declined from 76 percent in 1960 to 54 percent in 1977 and to 45 percent in 1981 before substantially increasing over the next six years. Second, indigence has its roots in the rampant economic problems of the countryside. Economist Santiago Levy estimated that approximately three-quarters of all rural residents in the late 1980s were extremely poor. In addition, the urban poor often have migrated from the countryside in search of opportunities for themselves and their families. Third, the indigent often suffer from nutritional deficiencies and other health maladies that contribute to lower life expectancy than the population as a whole. Finally, those in extreme poverty have larger families; children are expected to work to help support the household.

Mexican governments over the years have introduced numerous antipoverty initiatives, with varying degrees of success. In 1977 the López Portillo administration established the General Coordination of the National Plan for Depressed Zones and Marginal Groups (Coordinación General del Plan Nacional de Zonas Deprimidas y Grupos Marginales -- Coplamar). An umbrella organization, Coplamar developed linkages with numerous existing government agencies for improvements in health care, education, and other basic infrastructure. For example, approximately 2,000 rural health clinics were built under the auspices of IMSS-Coplamar. The National Company of Popular Subsistence (Compañía Nacional de Subsistencias Populares -- Conasupo)-Coplamar established thousands of stores that sold basic products to low-income families at subsidized prices. Although many of its programs were reduced or eliminated after 1982, Coplamar contributed to a noteworthy, although temporary, reduction in poverty.

In his November 1993 State of the Nation address, President Salinas announced that government spending on social projects had risen 85 percent in real terms between 1989 and 1993. Spending for education rose 90 percent; for health, 79 percent; and for environment, urban development, and distribution of drinking water, 65 percent. Much of that social spending was channeled through Pronasol, an umbrella organization established by Salinas in December 1988 to promote improved health, education, nutrition, housing, employment, infrastructure, and other productive projects to benefit those living in extreme poverty.

Salinas claimed that Pronasol marked a departure from previous policies of broad subsidies, high levels of unfocused government spending, and heavy state intervention in the economy. According to Denise Dresser, it advanced President Salinas's goal of adapting the state's traditional social role to the straitened economic conditions of the late 1980s and early 1990s by replacing general subsidies with strategic, targeted intervention. Salinas designed Pronasol to achieve the dual objectives of making social spending more cost-effective and fostering greater community involvement and initiative in local development projects. The main themes of Pronasol included grassroots participation and minimum bureaucracy (both of which are essential for project success) and the promise of immediate results. The federal government provided financing and raw materials for improving basic community services, although community members were required to conceive the projects and perform the work.

Approximately 250,000 grassroots Pronasol committees designed projects in collaboration with government staff to address community needs. They mobilized and organized community members, evaluated proposed public works, and supervised implementation. The government disbursed funds to the committees to finance the public works projects or to complement regional development programs, which fell within three strategic areas: social services, production, and regional development. Committees obtained matching funds from state and municipal governments in order to qualify for Pronasol funds. This match served to multiply the economic scale and the potential positive impact of the program.

Pronasol's social service aspect, Solidarity for Social Well-being (Solidaridad para el Bienestar Social), contained a wide range of programs that included education, health care, water, sewerage, and electrification projects; urbanization improvements; and low-income housing. Over a six-year span, Pronasol created some 80,000 new classrooms and workshops and renovated 120,000 schools; awarded scholarships to keep nearly 1.2 million indigent children in primary schools; established more than 300 hospitals, 4,000 health centers, and some 1,000 rural medical units; provided piped water access for approximately 16 million people; and provided materials to repair or reinforce 500,000 low-income homes and build nearly 200,000 new homes. Solidarity for Production (Solidaridad para la Producción) provided loans to approximately 1 million peasants who did not qualify for government or private credits, established 2,000 low-income credit unions, and supported some 250,000 low-income coffee producers (80 percent of them Indians) and nearly 400,000 agricultural day laborers (jornaleros). Solidarity for Regional Development (Solidaridad para el Desarrollo Regional) funded the construction or renovation of 200,000 kilometers of roads and more than 100,000 municipal improvement projects.

Despite these achievements, critics contended that Pronasol was merely a politicized repackaging of traditional welfare and public works projects that ameliorated but did not address the root causes of poverty in Mexico. In the view of these critics, Pronasol's raison d'être was to enable Salinas and his supporters to build new political linkages with autonomous low-income interest groups, thereby revitalizing the Institutional Revolutionary Party (Partido Revolucionario Institucional -- PRI) for future elections. Despite Pronasol's stated purpose, critics also maintained that resources often did not reach those in extreme poverty. In 1995 President Ernesto Zedillo restructured Pronasol as the Alliance for Well-being (Alianca para el Bienestar), strengthening the resource allocation roles of states and municipalities and reducing those of the presidency.

Data as of June 1996




Last Updated: June 1996


Editor's Note: Country Studies included here were published between 1988 and 1998. The Country study for Mexico was first published in 1996. Where available, the data has been updated through 2008. The date at the bottom of each section will indicate the time period of the data. Information on some countries may no longer be up to date. See the "Research Completed" date at the beginning of each study on the Title Page or the "Data as of" date at the end of each section of text. This information is included due to its comprehensiveness and for historical purposes.

Note that current information from the CIA World Factbook, U.S. Department of State Background Notes, Australia's Department of Foreign Affairs and Trade Country Briefs, the UK's Foreign and Commonwealth Office's Country Profiles, and the World Bank can be found on Factba.se.

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