The Economics Of Capacity Expansion In The Mexican Cement Industry

Crony capitalism systems—in which those close to political policymakers receive favors allowing them to earn returns far above market value—are a fundamental feature of the economies of Latin America. Haber and his expert contributors draw from case studies in Mexico, Brazil, and other countries around the world to examine the causes and consequences of cronyism.

Includes annual List of doctoral dissertations in political economy in progress in American universities and colleges; and the Hand book of the American Economic Association.

This paper presents findings from a study of the cement industries in France, Germany, Italy and the United Kingdom. Its purpose is to determine, as far as is possible, the extent to which the structure and performance of each industry has been influenced by the control of the market exercised by public auth orities, by the industries themselves, or by both acting together. The cement industry was chosen for its relative 'simplicity' and because it offers a good sample of different public policy approaches to the regulation of private markets. Although there are numerous major factors complicating inter national comparison, the industry is simple to analyse because it has a rela tively homogeneous product derived from very spread-out raw materials and it uses easily acquired technology to the diffusion of which there are no barriers. The different national industries discussed all had a similar history of private regulation of the market for the first half of the 20th century, during which time cartels proliferated, except when they occasionally collapsed under the pressure of price cutting stimulated by excess capacity. Since the Second World War, however, governments have differed in their approach to market regulation, and the four country studies illustrate a range of different approaches which covers the French experience of strict price control as an instrument ofindustrial policy, the Italian experience of weaker price control, a legal cartelin the U. K.