The political economy of Mexico's dollarization debate

Abstract

Between 1998 and 2002 Mexico was host to an intense debate over dollarization. This paper examines the conjunctural factors which led to the emergence of this debate, reviews the main participants in the debate and their arguments, and discusses why the debate ended. We further argue that the Mexican debate can best be understood not as one between rival ideological positions but between different, say, mainstream neoliberal positions. There is no mainstream consensus on the preferred form of the institutional governance of money. The Mexican debate on dollarization reflects this rather than simply the imperatives of global market pressures.