Christy Thornton's Revolution in Development tackles one of the central questions in development studies: who gets to shape the institutions and organisations that govern the global economy? By approaching archival evidence ‘from the outside in’, Thornton reveals the leadership role of Mexico's foreign relations officials in international meetings pertaining to the design of global financial infrastructures from the end of the First World War to the onset of the debt crisis in 1982. Mexico's position emerges as remarkably consistent: time and time again the country's envoys defended the right to ‘representation’ of debtor nations, and what they construed as their national interests. This led Mexican officials to press for ‘redistribution’ of capital from what we would now call the Global North (where there was a surplus) to the Global South (where it was scarce), by means of long-term loans negotiated according to non-market principles, and issued by states or newly created international organisations instead of by private banks. While Mexico's proposals were most often rejected or deflected, Thornton argues that the combination of geographical proximity and the large volume of trade and investment that linked Mexico to the United States meant US officials had to take Mexico's demands seriously. As a result, Mexico informed US policy making and, more broadly, Northern plans for international institutions and agreements, especially up to 1945. In this sense, recovering Mexico's side of the story allows for a reconsideration of the rise of US hegemony as less ‘top down’, and more ‘contested’, than many of the existing narratives suggest.
The choice of case study and period brilliantly serve the book's purpose. Latin America's nineteenth-century pattern of export-oriented capitalist development entered its first severe crisis in Mexico in 1910 when the country exploded into a revolution that exposed the destabilising consequences of imperialist rivalries and the tenuous position of the national elites that supported the operations of international capital. Out of this crisis – or more accurately, these crises, since the Mexican Revolution also involved intra-elite feuds as well as widespread popular uprisings – emerged a new state which, as the 1917 Constitution proclaimed, was committed to fighting for economic sovereignty within a globalised world. And it is this developmentalist state avant la lettre that is the protagonist of Thornton's book. Mexico's post-revolutionary state soon began promoting domestic capital accumulation, and eventually pursued a strategy of import-substituting industrialisation, incorporating portions of the labouring classes in their pro-growth compact as politically necessary. To do so Mexican officials had to find ways to finance massive public investments and imports of technology, machinery and intermediate goods which Mexico did not produce and exports alone could not pay for. Instead, they depended on international financing, through both foreign direct investments and foreign loans. The Mexican government obtained the necessary funds and handled the country's political economy relatively well, in the sense that the economy it oversaw experienced growth and structural change up to the early 1980s. But then the Global North dramatically increased interest rates, and as a result in 1982 Mexico stopped being able to repay its debts, kickstarting Latin America's worst financial and economic crisis to date. The subsequent abandonment of state capitalism – the central condition the United States and the International Monetary Fund (IMF) imposed for debt restructuring, and which officials in Mexico and across the region readily accepted – closed Latin America's twentieth century.
Chapters unfold chronologically. Chapter 1 starts in Paris at the end of the First World War, where discussions at the 1919 Versailles Peace Conference led to the creation of the League of Nations the following year. From there it travels to the Fifth Meeting of the Pan-American Union in Santiago de Chile in 1923. In both cases Mexico's envoys and diplomats exposed the contradiction between US multilateral liberalism and the upholding of the Monroe Doctrine. Chapters 2 and 3 track Mexico's advocacy for debtor countries in subsequent Inter-American Conferences. During the Great Depression all Latin American countries struggled to repay their debts, but Mexico's financial troubles ran deeper. It had defaulted in 1914, and had spent the intervening years either fending off or accommodating the pressures of organised US and European bond holders and their backers in the US State Department. So when the Mexican delegation arrived in Montevideo in 1933 they were ready to build on these experiences to propose an interest-free moratorium on payments of at least five years, and to ensure that President Roosevelt's newly minted ‘Good Neighbor’ policy meant an end to the threat of US military interventions to force repayments. Portraying international finance as a social relationship for which both debtors and creditors held responsibility, Mexican officials also argued for a ‘Continental Central Bank’ to stabilise currencies, to facilitate financial flows and stimulate trade and investment. While this proposal was deflected, the following year the United States created its Export–Import Bank to finance US exports of capital goods, intermediate goods and technology. Eventually, Mexico's idea of an Inter-American development bank would also take root.
Chapter 4 analyses Mexico's contribution to the Bretton Woods Conference and the creation of the World Bank (WB) and the IMF. Chapter 5 charts Mexico's ambiguous position vis-à-vis the United Nations and the Economic Charter for the Americas, while Chapter 6 focuses on the International Trade Organization. During the Second World War, US war-time economic needs had allowed Mexico to settle pending debt claims, and to secure access to technology and financing for industrial growth. Chapters 7 and 8 show a conservative turn in Mexico's stance during the Cold War. By the end of the 1950s Mexico had become the third largest recipient of credit from the US Export–Import Bank. In the 1950s and 1960s Mexico received 20 per cent of all the WB's lending to Latin America, and in 1970 this organisation allocated 14 per cent of its global funds to Mexico (p. 146). The Inter-American Development Bank, created in 1959, further supported Mexico's infrastructural development with a constant credit flow. At the same time, US foreign direct investment grew by a factor of five between 1950 and 1970, with 44 per cent of the US portfolio in Latin America invested in Mexico (p. 147). Unsurprisingly, Mexican officials were by then staunch supporters of the US-led international status quo. Having secured their country's position in the international system, they used their voice to silence other Latin American countries and eventually other countries in the Global South that were demanding deeper changes to the global system.
Revolution in Development demonstrates that foreign credit and investment were key to the supposedly closed, nationalist political economy of the so-called Mexican miracle, and to Latin America's import-substituting industrialisation more generally. More broadly, it decolonises and extends the history of international development, both in terms of narrative and practice. Like most ambitious books, it leaves the reader with questions. Thornton stresses the role of Mexican actors in securing the finance they needed from the United States and US-dominated international institutions. But the volume of US investments in Mexico, along with the high degree of trade between the two countries, meant that elements of US capital also had a strong interest in Mexican economic growth. To what extent does this explain Mexico's success in obtaining development financing, relative to interventions by Mexican foreign officials? And in the context of the Cold War after 1945, how did the United States’ strategic financial commitment to countries like Japan and South Korea affect Mexico's influence on global development infrastructures? Finally, while Thornton successfully argues that Mexico's interests were acknowledged and often accommodated, did this make the global financial order any fairer? This rich and fascinating book will be of much interest to anyone seeking to understand how our global financial institutions came to be. It should also become core reading in courses on Latin American and Mexican international relations and economic development.
