WHAT IS THE SHARED DEVELOPMENT MODEL? - CULTURE VOCABULARY

The shared development model was the plan implemented between 1970 and 1976 by the then president of Mexico, Luis Echeverría. It consisted of the combination of high economic growth with the equitable distribution of income.

It intended to correct the deficiencies of the previous economic development model, promoted by President Adolfo Ruiz Cotines in 1954 and maintained by Adolfo López Mateos and Gustavo Díaz Ordaz until 1970.

Luis Echevarría Álvarez. Saturninojuarez / CC BY-SA (https://creativecommons.org/licenses/by-sa/4.0)

Some of the objectives of the shared development model were to increase public spending, reduce external debt, end social inequality, increase productive activity, modernize industry or increase exports.

Historic context

During the economic problems that some Latin American countries faced, financial entities such as the World Bank, the Inter-American Development Bank, and the International Monetary Fund came to the aid of republics in crisis.

The conditions for aid were a cut in public spending and social plans. All of this resulted in a further impoverishment of the population. In Mexico, the model applied was that of stabilizing development, which was in force until 1970.

goals

Among the objectives that were established for this model are:

Reduce the growth rate of public debt.
That the State had a greater participation in economic activities to have a firmer control over the imbalances in the various production sectors.
Incorporate even more the labor sector at all levels of the production process.
Provide a better quality of life to the people.
Generate more direct and indirect jobs.
Increase the profits of the labor sector through an equitable distribution of the dividends generated by the industry.
Make the most of natural resources to increase the growth of the economy.

Evolution of the shared development model

Application

Many governments implemented plans to solve the crisis. In the case of Mexico, to achieve economic growth, the government focused on a policy of restricting spending with the objective of curbing inflation and reducing the deficit.

However, as tax collection and the prices of public goods and services did not increase, the economic situation worsened, with the public sector deficit multiplying almost tenfold.

To make the situation even worse, the financing of the expenditure had been done through the issuance of paper money and internal debt. The social panorama of the country was significantly affected by the great demographic explosion, a situation that was not foreseen in the previous development plans of previous leaders.

Thus, there was a shortage of hospitals, schools, housing, public services, and great inequality in income distribution. Despite the fact that an increase in national production was achieved, the excessive increase in imports brought this achievement down.

Difficulties

The antagonistic position maintained by the Bank of Mexico and the Ministry of Finance led the Mexican economy to accelerate and slow down, with serious economic and social consequences.

The policy of expropriations to give land to the peasants generated distrust in private investment. Corruption, the rush to obtain results, the lack of adequate planning and inefficient financial management damaged the results of many projects.

Final disaster

Finally, for 1976 the crisis broke out, with devaluation, an inflation of almost 16% and a deficit in the balance of payments.

It is then that an agreement is signed with the IMF that the next government continued, but was interrupted by the development of the oil industry, which caused the austerity measures to be overthrown and new international loans were used.

Positive aspects

The shared development model did not achieve all the objectives set. However, it is possible to highlight certain positive events that had an impact on Mexican society:

The creation of the Institute for the Promotion of Housing (INFONAVIT), the purpose of which was to provide workers with the possibility of receiving loans to buy or remodel homes.
An educational reform was carried out to give greater space to technical education and in this way integrate more people (mostly young people) into the country's productive apparatus.
Universities and centers of secondary education were created.
The Mexican Food System was implemented, which would be in charge of the organization and adaptation of agricultural activities, increasing the production of basic items and reducing imports, as well as supporting fishing exploitation and its consumption. It is necessary to note that not all of these objectives were achieved.
The creation of the National Plan for Adult Education.
Efforts were made to integrate indigenous communities into the education system, through Spanish teaching programs.

Consequences

For many, the shared development model was a populist measure whose main objective was to unite the efforts of the peasant and worker sectors. As mentioned above, the model did not have the expected results.

There was an increase in external debt.
Unemployment rates increased.
There was a devaluation of more than 6% against the US dollar.
There was excessive control over foreign investment, which caused it to decrease considerably.

References

Ramales, M. Eumed: Notes on Macroeconomics. Recovered from: eumed.net
Vargas Hernández, J. (2005). The economic and social impact of recent developments in agricultural and rural policies and institutions in Mexico. Mexico, Agriculture, Society and Development Magazine
Shared development, the Mexico of the 70s: Paradigms. Recovered from: moneyenimagen.com
Table 8 Shared development model. Government of President Luis Echeverría Álvarez (LEA) 1970-1976. Recovered from: Escuelavirtual.org.mx
«Navigating towards a Shared Development». Recovered from: ilo.org.

WHAT IS THE SHARED DEVELOPMENT MODEL? - CULTURE VOCABULARY - 2025