Mariana Mazzucato: ‘The most important thing for Mexico is to stop being just a low-cost manufacturer for US companies’

Mariana Mazzucato, a 58-year-old Italian-American economist, fondly recalls her year spent in Mexico as an exchange student in 1989. At just 20 years old, she attended the National Autonomous University of Mexico (UNAM) and quickly realized that economic theories failed to explain the situation in the country. This realization led her to pursue advanced degrees in economics and ultimately become a leading advocate for a mission-oriented approach to economic development in Mexico.

Currently, Mazzucato serves as the director of the Institute for Innovation and Public Purpose at University College London.

Facing the challenge of analyzing Mexico's economy through Plan Mexico, a strategy designed by President Claudia Sheinbaum's administration to boost growth, Mazzucato and her colleague Lara Merling published State Transformation for Plan Mexico: A Mission-Oriented Approach to Achieving Shared Prosperity. In this study, the duo advocates for greater coordination among government institutions and increased public and private investment to ensure meaningful results.

One of the key priorities identified in the report is water security, health, energy sovereignty, and food sovereignty. Mazzucato explains that these areas were chosen based on their potential to drive growth while addressing Mexico's most pressing socio-economic issues. She emphasizes that economic growth is contingent upon investment, but without clear objectives and appropriate conditions, such as better working conditions and equitable distribution of resources, growth may not be inclusive.

The report also highlights the need for tax reform, arguing that a lack of tax revenue and inefficient investment allocation hinder Mexico's ability to achieve meaningful growth. Mazzucato suggests implementing a wealth tax, capital gains tax, and inheritance and gift tax to address the concentration of wealth in the country. She also notes that tax policy should not disproportionately burden low-income households and should be designed to generate revenue for future investment.

While the report acknowledges the fiscal challenges Mexico faces, Mazzucato maintains that stimulating growth and increasing tax revenues can ultimately expand the fiscal space available for further investment. By addressing structural issues such as low tax revenues, weak public investment, and limited private-sector participation, Mexico can position itself among the world's largest economies, reduce poverty and inequality, and become a top destination for international tourists.