The enclave economy: foreign investment and sustainable development in Mexico's Silicon Valley

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MIT Press, 2007 - Business & Economics - 214 pages
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Foreign investment has been widely perceived as a panacea for developing countries—as a way to reduce poverty and kick-start sustainable modern industries. The Enclave Economy calls this prescription into question, showing that Mexico's post-NAFTA experience of foreign direct investment in its information technology sector, particularly in the Guadalajara region, did not result in the expected benefits. Charting the rise and fall of Mexico's "Silicon Valley," the authors explore issues that resonate through much of Latin America and the developing world: the social, economic, and environmental effects of market-driven globalization.

In the 1990s, Mexico was a poster child for globalization, throwing open its borders to trade and foreign investment, embracing NAFTA, and ending the government’s role in strengthening domestic industry. But The Enclave Economy shows that although Mexico was initially successful in attracting multinational corporations, foreign investments waned in the absence of active government support and as China became increasingly competitive. Moreover, the authors find that foreign investment created an "enclave economy" the benefits of which were confined to an international sector not connected to the wider Mexican economy. In fact, foreign investment put many local IT firms out of business and transferred only limited amounts of environmentally sound technology. The authors suggest policies and strategies that will enable Mexico and other developing countries to foster foreign investment for sustainable development in the future.

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Contents

Introduction
1
The Emergence of Mexicos Enclave Economy
43
A Profile of the
71
Copyright

7 other sections not shown

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About the author (2007)

Kevin P. Gallagher is a Research Associate at the Global Development and Environment Institute of the Fletcher School of Law and Diplomacy at Tufts University. He is also Assistant Professor of International Economics in the Department of International Relations, Boston University. He has written and edited numerous books and articles on the relationship between economic integration and sustainable development and has served as an advisor to international institutions, governments, and nongovernmental organizations.

Lyuba Zarsky is Associate Professor of International Environmental Policy at the Monterey Institute for International Studies and Senior Research Fellow at the Global Development and Environment Institute, Tufts University. She is a contributing editor of Investment for Sustainable Development: Balancing Rights and Rewards.