Introduction

The decade of the 1980s witnessed the widespread adoption of export-led growth strategies and neoliberal policies prescribing open markets and privatization programs in much of the developing world. Development research in the 1990s focused primarily on the implications of these trends for the industrializing countries that are increasingly integrated into global markets. The abandonment of import-substituting strategies, which were influenced by the neo-marxist and dependency theories of the 1960s and 1970s, and the implementation of far-reaching reforms corresponding to a new economic model have led to a watershed in development studies. Researchers and policy makers alike confront the challenge of how to analyze the link between the global and the local. Latin America is a case in point. Spirited debates have arisen about the local development outcomes associated with the adoption of neoliberal reforms in the region and what theories and paradigms can best explain these outcomes (Dussel Peters, 2000; Reinhardt and Peres, 2000).

Our chapter contributes to this debate by focusing on one dynamic exporting cluster in Mexico, a country that has undergone a rapid and radical economic restructuring over the past decade. Across a wide variety of sectors, Mexico's exports have been booming since the implementation of the North American Free Trade Agreement (NAFTA) in 1994, increasing from $51.8 billion in 1993 to $166.4 billion in 2000 (SECOFI, 2001). Aside from impressive export growth, Mexico has also managed to achieve many of the other objectives associated with Latin America's new economic model: a stable currency, modest inflation, and plentiful direct foreign investment. Perhaps most important, the presidential election of July 2000, which saw the historic victory of opposition candidate Vicente Fox, provided evidence that Mexico's decades long transition to genuine democracy from one-party rule has been consolidated.

Despite the seeming abundance of good news, there is a growing sense that all is not well in Mexico. While the liberalization strategy that Mexico enthusiastically embraced in the 1990s has been successful in its own terms, critics have pointed out that Mexico's shift from an import-substituting industrialization strategy to an export-led growth model has been associated with a more unequal income distribution and falling real wages for the majority of the country's workers (De la Garza, 1994; Dussel Peters, 2000; Robinson, 1998–99).