A Global Americans Interview with Dr. Christy Thornton, Author of Revolution in Development: Mexico and the Governance of the Global Economy

Thornton explores the little-known history of Mexico’s role in shaping the institutions that would come to define global economic governance.


Source: University of California Press

Christy Thornton, Revolution in Development: Mexico and the Governance of the Global Economy. University of California Press, January 2021.

Price: USD $29.95 | Length: 310 pages

Christy Thornton is Assistant Professor of Sociology and Latin American Studies at Johns Hopkins University and the author of Revolution in Development: Mexico and the Governance of the Global Economy. In her book, Thornton explores the little-known history of Mexico’s role in shaping the institutions—including the World Bank, the International Monetary Fund, and the Inter-American Development Bank—that would come to define global economic governance over the course of the twentieth century. She traces the twin concerns that would animate the efforts of Mexican diplomats, statesmen, and economists for a half-century: representation for Mexico and other developing countries in international economic institutions and redistribution of surplus capital from the countries of the Global North to those of the Global South. Thornton shows how Mexico’s advocacy for what came to be known as “international development” would ultimately culminate in the dismantling of the country’s own post-revolutionary developmental project and interrogates the implications of Mexico’s economic trajectory for future attempts at global economic reform. The following interview between Global Americans and Dr. Thornton took place in March 2021.

Note: The following interview has been edited for length and clarity. 

Global Americans: The historical trajectory that you trace in Revolution in Development begins, in many ways, with the ratification of Mexico’s 1917 Constitution. As you argue, the 1917 Constitution—and in particular, its 27th article—constituted “a profound challenge to the liberal conception of property” (Thornton, pg. 20) and was thus seen in “many quarters as a mortal threat to the liberal capitalist order” (Thornton, pg. 21) of the early 20th century. Out of what regional and international historical and political contexts did the Constitution of 1917 arise? And what were the implications of its more radical and polarizing sections (in particular, the redefinition of private property rights contained within Article 27) for Latin America and the rest of the world?

Thornton: The Constitution of 1917 was a condensation, in many ways, of the various revolutionary struggles that had consumed Mexico since the Revolution began in earnest in 1910. Revolutionary leader [and president of Mexico from 1916-1920] Venustiano Carranza called a new constitutional convention in 1916; the most pressing reforms for Carranza and his supporters were questions of liberal democracy and political rights. But for other revolutionary factions—including a growing movement of urban workers, as well as the peasant revolutionaries Pancho Villa in the North and Emiliano Zapata in the South—the more important reforms were social: workers’ rights and land reform, above all.

The draft constitution that Carranza proposed was relatively conservative, but these other factions successfully pushed the constitutional convention to take up their more radical plans, resulting in some of the most far-reaching social rights to have ever been enshrined in a constitution at that point. Article 123 elaborated, among other rights, limits on the working day, the provision of overtime pay, equal wages regardless of gender, the creation of social security benefits, and the right to organize. Article 27 also redefined property as vested, not in its individual owners as was the case in the United States, but rather in the nation. Further, the article specified, the federal government could put limits on property ownership to ensure “equitable distribution of public wealth,” which would require breaking up large, landed estates, ensuring all communities had access to communal lands, and limiting the power of the Catholic Church to own property. Further, the article specified, only Mexicans and Mexican companies could own rights to land, water, and subsoil resources like oil; these rights could be granted to foreigners by the Mexican government only if those foreigners agreed that they were subject to national law and enjoyed no special diplomatic protections abroad.

Of course, these provisions were of great concern to the foreign companies and landholders who had flocked to Mexico during the Porfiriato [the period dating from 1876 to 1911, during which Mexico was ruled by General Porfirio Díaz], which had granted concessions in mining, agriculture, railroads, and oil. If the provisions of the new constitution were to be applied retroactively, foreign interests stood to lose massive investments to expropriation, and they took their cases immediately to their governments—especially in the U.S. and Great Britain—as well as to the international stage. For example, the Association for the Protection of American Rights in Mexico, a business group, sent the oil executive Edward L. Doheny to the Paris Peace Conference at the end of the First World War to argue that the new League of Nations should force Mexico to reverse its new laws. When that did not happen, business interests pressed their case before the U.S. Congress, holding lengthy hearings before the Senate Foreign Relations Committee about the “Bolshevik” threat in Mexico. The U.S. government even withdrew recognition from the Mexican government after 1920, in the hopes of forcing Mexico to capitulate. Despite the fact that it would take over two decades for the kind of land reform outlined in the constitution to come to fruition—under President Lázaro Cárdenas in the 1930s—business interests in countries like the United States and Great Britain continued to argue after 1917 that Article 27 represented a grave threat to the liberal capitalist order.

Global Americans: On a similar note, can you elucidate how, from the 1930s through the 1950s, Mexican diplomats and statesmen would rely on “the principles of the Mexican revolutionary constitution” in order to promote “a new global understanding of how the world economy should be governed” (Thornton, pg. 57)? In particular, can you explain how the values articulated in the 1917 Constitution undergirded the “‘new legal and philosophic conception of credit’” (Thornton, pg. 56-57) posited and promoted by José Manuel Puig Casauranc?

Thornton: The fears that foreign mining, agricultural, and oil interests had about the 1917 constitution—that it allowed the government to simply seize their properties and invalidate existing contracts—complemented the worries of international investors, especially bankers and bondholders in the U.S. and Europe. During the Revolution, Mexican leaders repudiated debts that had been taken on before and during the revolutionary struggle, defaulting on loans and refusing to pay interest to those who had bought government bonds. As a result of this combination of factors, Mexico found itself shut out of the system of international debt and credit: banks refused to lend to the government, investors refused to buy Mexican bonds, and foreign companies were skittish about the security of their property in the country.

Mexican leaders, therefore, came to realize that their economic sovereignty was seriously limited since foreign capital could critically constrain Mexico’s ability to pursue its national economic goals. So Mexican diplomats, economists, and political figures began to argue for changes not just in Mexico’s domestic economic system, but to the broader international system in which Mexico and countries like it operated. Especially after the Great Depression, a wave of other governments in the region defaulted on their foreign debts, Mexican leaders like Puig argued against a hierarchical structure in international affairs that gave creditors all the power. After all, he argued, just as the poorer countries needed foreigners to lend them capital for their own development, those with capital needed borrowers in order to make a profit—finance was “an equation of at least two terms,” Puig argued in 1933. Rich countries should recognize this interdependence, he said, and create new institutions that would make the global financial system less unbalanced. As I detail in the book, therefore, Mexican officials repeatedly sought to create new international economic rules that would afford representation to the poorer countries within international organizations and redistribution through multilateral institutions. And one result of this, as I argue, was the creation of the apparatus of international development itself.

Global Americans: Many readers might view the “Mexican miracle”—that is, the period stretching roughly from 1954 to 1970, during which Mexico enjoyed booming rates of economic growth and industrial production—as a success story for government-driven, inwardly-focused developmentalism, centered around a policy of import substitution industrialization. What readers may be less familiar with is how this “miracle” was also funded by massive loans from the World Bank and fueled by immense flows of foreign direct investment (particularly from the United States). How did this phenomenon ultimately produce what you term “the Mexican paradox”? (As you write, the post-revolutionary Mexican state “had built a soft-authoritarian, single-party system whose mandate was to manage a corporatist development project that had become deeply dependent on foreign capital” (Thornton, pg. 193); and with the advent of the debt crisis of the late 1970s and early 1980s, those same “institutions for which Mexico had fought as a means to secure its state-led developmental project were now those through which that very project was dismantled” (Thornton, pg. 194)).

Thornton: Successive governments during this era approached the international system differently—some were more conciliatory, others more confrontational—but the through-line throughout this period was ensuring that global institutions and agreements supported Mexico’s program of “stabilizing development,” as it was known. While Mexican figures had spent the preceding decades as self-appointed leaders of a project for radically reforming global economic governance, once new economic institutions like the World Bank were in place, and once Mexico finally settled its long-outstanding foreign debts, the Mexican state took great advantage of the new international financial system. Mexico took on large official loans from institutions like the World Bank, the U.S. Export-Import Bank, and eventually the Inter-American Development Bank, and also re-entered the private financial markets as well, floating new bonds and securing new private-sector loans for Mexican industry.

By the 1960s, Mexico had the highest credit rating of any developing country, and protecting its reputation as a “good debtor” came to take priority over the questions of democracy and equity that had animated its earlier fights. This meant that, for example, when other countries from the emerging Third World argued that this financial system was unfair and tried to create new, more egalitarian institutions through the UN General Assembly, Mexican officials worked quietly behind the scenes to maintain the status quo and ensure stability.

And stability was an important watchword: by this period, power in Mexico was consolidated in the Institutional Revolutionary Party (PRI), and PRI leaders oversaw a corporatist project to manage conflict between business, labor, and peasants through centralized state institutions (and to violently repress dissent that spilled outside these channels). While much of Latin America went through major political upheavals, including military coups, Mexican leaders stressed the stability of their system, something that reinforced Mexico’s reputation as a good investment risk.

So even during periods when Mexican leaders like Aldofo López Mateos or Luis Echeverría sought to align Mexico more strongly with the Third World movement from the 1950s to the 1970s, Mexican officials repeatedly sought to work within the existing system of global economic governance, in contrast to other, more radical governments that sought to circumvent or overthrow the power of institutions like the World Bank and IMF. Mexican leaders had spent three decades arguing that their developmental project depended on the creation of new international economic and financial organizations, and then another three decades defending organizations that were created. But after 1982, when Mexican leaders had borrowed massively in private markets and therefore declared that they could no longer meet their foreign debt obligations, it would be those very institutions that would oversee the dismantling of Mexico’s state-led developmental project, through some of the first structural adjustment programs.

Global Americans: The story told in Revolution in Development also appears, in many ways, to be the story of Mexico’s efforts to forge alliances and strategically position itself as necessary to secure and promote its own national economic interests. In the 1950s, for instance, we see Mexican President Adolfo López Mateos engaging in flirtations with Indonesian President Sukarno, President of Yugoslavia Josip Broz Tito, Indian Prime Minister Jawaharlal Nehru, and the Non-Aligned Movement (NAM). On the other hand, you note how, around that same period, Mexico “acted as a spoiler” (Thornton, pg. 165) with respect to Operação Panamericana (the effort led by Brazilian President Juscelino Kubitschek, with the support of Argentina, Venezuela, and Costa Rica, that eventually contributed to the creation of an Inter-American Development Bank). Finally, in the early 1970s, we see President Luis Echeverría attempt to position Mexico as the “key interlocutor between the United States and a radical Third World” (Thornton, pg. 167), ultimately placing his government in the “contradictory position of trying to codify the underlying principles of Mexican developmentalism on the international stage without threatening [Mexico’s] own access to foreign credit” (Thornton, pg. 189). How do these strategic maneuvers fit into the broader context of the history that you tell in Revolution in Development? How did these strategic negotiations both enable the rise of the post-revolutionary Mexican developmental state and also eventually ensure its disintegration?

Thornton: Here, it is important to highlight what [the Italian economist and sociologist] Giovanni Arrighi identified as an analytical difference between Mexico’s geopolitical position in the interstate system and its semi-peripheral position in the global economy—seeing how geopolitical interests can be distinct from, and used to advance, economic interests is key. In the immediate post-revolutionary decades, Mexico’s exclusion from the international financial system led its leaders to make strident critiques of the structure of global economic governance and to cooperate with other Global South states to advance a new vision for investment and trade. Beginning in the 1940s, however, Mexico’s economy began to be more dependent on and intertwined with that of the U.S., a key market for Mexican goods and a key source of capital. But maintaining a plausible distance from the U.S. was important politically for the leaders of the post-revolutionary state, who couldn’t be seen as making some of the same concessions to foreign capital that the Porfirio Díaz regime had. They had to balance these competing imperatives.

The Cold War came to provide some of the leverage that Mexico needed, and Mexican leaders found that maintaining some independence from the foreign policy prerogatives of the U.S. could be useful for advancing their economic interests. In flirting with the NAM or publicly supporting the government of [Chilean President] Salvador Allende, Mexican leaders made a case that they could, at any moment, turn more forcefully toward the socialist world if their needs were not met. As Vanni Pettinà has argued, Mexican officials threatened to join the NAM conference in Belgrade in 1961 in a calculated move to push the U.S. to make more economic concessions. After months of ambiguity, when Mexico finally declined the NAM invitation, new Export-Import Bank, World Bank, and Inter-American Development Bank loans were authorized.

What this meant was that even as a leader like Echeverría would welcome Allende to Mexico City or put out joint statements with Leonid Brezhnev [General Secretary of the Communist Party of the Soviet Union, 1964-1982] and Zhou Enlai [Premier of the People’s Republic of China, 1954-1976], these geopolitical strategies were ultimately in the service of a state-led capitalist development project that was not only integrating Mexico’s economy ever more deeply with that of the U.S., but it was also making the country increasingly reliant on foreign borrowing. The inflow of foreign capital was able to paper over some of the internal contradictions in the Mexican economy until the debt burden became unsustainable, at which point the state-led industrial development project was unraveled in favor of an explicitly neoliberal one.

Global Americans: In the conclusion of your book, you write: “One of the central arguments of Revolution in Development, therefore, is that we should understand the construction of the international development apparatus at mid-century as the response to a set of sustained demands from below, rather than simply as some brilliant and nefarious imposition from above” (Thornton, pg. 196). How did the Mexican and Latin American “demand for development” shape the “creation and reform of the institutions, agreements, and organizations that together comprise our system of global economic governance” (Thornton, pg. 6)?

Thornton: In making this argument, my research builds on the work of Eric Helleiner, whose book The Forgotten Foundations of Bretton Woods made the argument that the “development mandate” of the World Bank emerged in large part from the U.S. relationship with Latin America in the 1930s and 1940s. Against the conventional wisdom that the creation of the World Bank and the IMF was the result of a diplomatic contest between American and British officials, in which the developing world mattered little, Helleiner made clear how important Latin Americans were to the U.S. planning process. While some U.S. and British officials at the time argued that the Latin American representatives at Bretton Woods were there simply to rubber-stamp their plans—merely to “sign in the place for the signature,” as one British official put it—my research puts Mexican archival sources in conversation with those from the great powers to demonstrate how critical Mexican officials were of the U.S. plans for the Bretton Woods institutions, and how they sought to change them.

Mexicans played a key role at Bretton Woods, where Mexican Finance Minister Eduardo Suárez was invited to chair a conference commission alongside Harry Dexter White and John Maynard Keynes, and where Mexican economists argued explicitly for the inclusion of development in the purview of the new institutions. But their interventions at the conference were part of a much longer tradition of Mexican advocacy for democratizing international institutions in order to facilitate the redistribution of capital from North to South. The book traces this lineage back to the Mexican repudiation of the hierarchies built into the League of Nations’ plans in 1919; Mexico’s reform of the statutes of the Pan American Union in 1923; and its advocacy for a new international system of credit, including an Inter-American Bank, in the 1930s. It then follows this lineage forward, after Bretton Woods, into the fight over the Economic Charter for the Americas at the Chapultepec Conference in 1945, and the negotiations to create an International Trade Organization (ITO) in 1948.

At each of these moments, Mexican officials repeatedly intervened to argue for a radical rethinking of the governance of international finance, investment, and trade, in favor of what would become the “developing countries.” The book details Mexico’s surprising success at convincing government officials in the U.S. of the logic of their plans, as Mexican officials subjected U.S. multilateral liberalism to a kind of immanent critique, forcing the American government to live up to the ideals it had long professed. Thus, I argue that when the World Bank was created in 1944, or the Point IV program of technical assistance was inaugurated in 1949, we should situate those moments in a context of decades of often contentious negotiations between officials in the U.S. and representatives of countries like Mexico. Mexican officials, and their counterparts from elsewhere in Latin America and what would eventually become the Third World, astutely analyzed their own economic troubles as deeply dependent on a globalizing economy in which the U.S. had the preponderance of power—and so they fought repeatedly to make U.S. officials recognize and rectify this, thereby creating a demand for what we think of today as the apparatus of development.

Global Americans: Revolution in Development concludes in 1982, with Mexico in the grips of a sovereign debt crisis and preparing to accept “structural adjustment” as a condition for an economic relief package negotiated with the IMF. The economic fallout of the COVID-19 pandemic has caused debt levels to surge across Latin America, causing some experts to warn that the current debt crisis is threatening to provoke a new “década perdida” (i.e., a return to the debt-choked, economically stagnant years of the 1980s). As we speak, Argentina is attempting to renegotiate a debt repayment program with the IMF. In Ecuador, adherence to an IMF deal negotiated under the current president, Lenin Moreno, has emerged as a key issue in the country’s presidential election, with front-runner Andrés Arauz threatening to refuse to comply with the terms of such an agreement if elected. Furthermore, earlier this year, Ngozi Okonjo-Iweala—former Minister of Finance of Nigeria—was named as the next director-general of the World Trade Organization (WTO). (While Okonjo-Iweala had already achieved the approval of nearly all WTO member states, the United States had held up her appointment for several months, supporting the candidacy of Yoo Myung-hee, the South Korean Minister of Trade, instead). Needless to say, one of the consistent themes of your book—Mexico’s “vision for global economic governance” that both “afforded representation to the countries of […] the Global South and enabled redistribution of the surplus capital of the Global North” (Thornton, pg. 1)—remains, at least in some form, a point of contention on the global stage today. In the forty years since the events with which you conclude Revolution in Development, then, how has the fight for representation and redistribution within the institutions of global economic governance progressed (or, perhaps, failed to progress)? What future do you see with respect to this fight?

Thornton: It is remarkable, when you go back and read the Mexican critiques of the role of the U.S. in the world economy during the 1930s, or of the U.S. plans for the World Bank and IMF in the 1940s, just how prescient their concerns were. Today, reformers worry about the “democratic deficit” within institutions like the IMF and the WTO, acknowledging that they have stifled voices from the Global South for too long. But these concerns were anticipated by Mexican planners as far back as the 1930s and 1940s in their struggles for representation and redistribution that I detail in the book.

From the very conception of our systems of global economic governance, then, there have been voices arguing for democratizing institutions and managing finance, investment, and trade more fairly. But they have largely been ignored in scholarship that has paid insufficient attention to the agency of the Global South in international affairs. What I wanted to show in the book was not only that these critiques have long been leveled, but also show how the possible alternative futures they imagined were defeated—if struggles for global economic justice were waged in earlier eras, why, precisely, did they not succeed? Understanding this might help us understand better the forces that are likely to block further reforms today.

One of the patterns that I uncovered in the book, for example, is that Mexican officials were actually surprisingly successful at convincing government officials in the U.S., and to a lesser extent Europe, of the logic and utility of some of their ideas. We see representatives from the State and Treasury Departments, for example, agreeing to reforms proposed within the Pan-American Union in 1923; agreeing to take up projects like the Inter-American Bank in 1940; deciding to incorporate some Mexican ideas into Bretton Woods in 1944; ceding to demands made by the industrializing countries during the negotiations over the International Trade Organization, and even deciding to let Echeverría get his way, to a certain extent, with the Charter of Economic Rights and Duties of States. But over and over, where the reforms pushed by Mexico and its allies restricted the prerogatives of capitalist interests too much, those interests step into the process—mobilizing their allies in Congress to block ratification of agreements or pushing their representatives at the UN to vote against reform proposals.

I think this is a key lesson from the book: the Mexican proposals that I outline were not seeking to overthrow or abolish international capitalism; rather, they were meant to save capitalism from itself, to make it work not just for those at the top, but for rich and poor, weak and strong, debtor and creditor alike. And yet, the Inter-American Bank, the ITO, and the Charter of Economic Rights and Duties of States were defeated by the organized power of capitalist interests who valued their own shorter-term gains over the longer-term systemic logic advanced by Mexicans and their allies. Of course, critics might argue that this is inherent to the global capitalist system in which we operate. But the undying dream—that by building the right institutions, implementing the right kinds of reforms, and drawing up the right agreements, we might finally address poverty and inequality on a global scale—is one that animates calls for reform even today. Facing the history of how such a dream has been deferred in the past might help in the fight for a different future.

Henry Bacha holds a B.A. in Anthropology and Latin American and Caribbean Studies from the University of Chicago and has served as a Fulbright fellow in Brazil.

If you would like to recommend a book for review, please reach out to Global Americans editor, Nicole Harrison at nharrison@theglobalamericans.org.


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