Industrial development in time under institutional frailty: the Mexican cotton textile industry in the 19th. century

Abstract

Modem textile manufacture appeared early in Mexico and grew continuously through the 19th century. Yet, it did not translate into a successful industrialization process as a result of naturally endowed high transportation costs and institutional frailty. Institutional frailty, a concept that encompasses institutional uncertainty, weakness and fragmentation, generated: a captured tariff policy that gave low effective protection to the industry, a backward financial market that limited resources available for industrial growth, and increased transportation costs through inter-state tariff barriers. High transportation costs fragmented the national market and as a result the textile industry grew geographically dispersed.