Economics: Positive Impact for Social Programs

MEXICO - Report 13 Nov 2017 by Mauricio González and Esteban Manteca

During the previous presidential administration Mexico almost tripled the number of social programs, which climbed to 278 by 2012. Since that time, greater coordination and other factors allowed for fewer programs (down to 149 in 2017) at the same time as austerity has led to a reduction of funds budgeted for such social interventions from a 2015 peak of 1.03 billion pesos to the 875 billion pesos earmarked for 2017.

The government has prioritized health services, its Prospera social inclusion project and the promotion of education in tackling the country’s poverty and social deprivations, and fiscal and labor reforms have contributed significantly to considerable migration of informal labor onto regular payrolls.

Though it may not be possible to measure with any precision just how much impact such public investment has on social development, multidimensional poverty assessments have afforded a better lens through which to gauge social policy results, and facilitated the design of social policy coordination strategies across two different federal administrations despite their different political affiliations.

The results have been mixed in recent years, as the share of the population living in poverty has fallen only marginally from 2008 levels, but the percentage of those experiencing extreme poverty dropped from 10.6% to 7.6% in 2016. There has been especially encouraging progress in addressing some specific deprivations, such as the percentage of those experiencing extreme poverty, three or more forms of deprivation, or lacking access to formal education.

The sharpest improvement has been in health care services, with the percentage of the population lacking such access more than halved, from 38.4% in 2008 to 15.5% in 2016.

But despite formal job growth, income levels remain the greatest social development challenge as 50.6% of the population continues to live on income below the well-being line. That may signal a slight improvement over the previous three years, but it remains more than a percentage point and a half above the 2008 reading. Per capita earned income has shown real-term growth in recent years, but has yet to recover to the pre-crisis levels of 2007 and 2008.

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