October 29, 2018
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1994. The Zapatista revolution draws widespread attention into the southern region of Chiapas, the second poorest state in Mexico. It is the plight of the indigenous people, who are a majority in the region and start a rebellion to claim their rights over the land they occupy. The place draw many policy attention from the Mexican government, who since then has put an emphasis in infrastructure and education investments in the area.

“25 years down the road they have constructed roads, airports, ports, they have improved schooling with better coverage and quality of education,” says Miguel Ángel Santos, Senior Research Fellow at the Center for International Development of Harvard University. “And yet the place continues to be poor.” The researcher presented his paper Place-specific Determinants of Income Gaps: New Sub-National Evidence from Chiapas, Mexico at a seminar held at the University of Navarra on October 23rd.

The Mexican government did an effort to improve schooling coverage. Results of a standardized national test show the schooling gap with the country’s average reduced from 3.5 to 1.8 points. That objective was covered.

The radiality of roads from Mexico City outwards wasn’t the best policy to connect small towns far away. In 2002 they started a policy focused region by region and time savings increased. Now Chiapas has good connection by roads, three airports and a port near its capital. The objective was covered. “The money was not wasted in the way that they have the results they wanted,” says Santos. “But they don’t have the expected income. To make the same income in six years of schoolings in Mexico, you need ten years of schooling in Chiapas.”

Further evidence shows that those chiapanecos who migrated to other Mexican region earned more or less the same salary than the non-chiapanecos. Education isn’t the problem. Infrastructure isn’t the problem Then what is it? Santos has an answer: “Our conclusion is: you have invested a lot in individual and infrastructure. You miss place specific.”

Chiapas has comparative advantage on 350 products manufactured by a larger amount of states. Moreover, its exports are focused on minerals, vegetables and a little bit of electronics, whilst the whole of Mexico has a much wider range of products. Poor places manufacture less goods that on average more people can do. Furthermore, people migrate less in Chiapas. Why? Properties are communal and you can’t sell your house, which you fear to lose. Also, you face up to $1800 fines if you don’t come back to attend communal council meetings which you are appointed to. In the end, mobility is limited and reduced.

Santos recommends four steps to foster a higher income in Chiapas. First, to create a regional agency to attract businesses in the north of Mexico to come to the city, providing them with the environment they need. Second, create a special economic zone and negotiate with indigenous people to rent their land and employ them in new businesses. Lastly, changing the housing policy, which was based on giving free land on remote areas, and thinking how to connect people to work is also a key part of the question. For that investment on public transport is key to connect people to the urban centers were work is. “It’s a chicken and egg problem. No buses, no people, no jobs, no businesses”, concludes Santos.