Institutions and Investment is a case of the new institutional economic history at its best. A rigorous theoretical framework enhances its serious archival work, strong narrative, and convincing analysis. Economic historians of the belle epoque have long debated whether processes of industrial expansion observed in Latin America around 1900 should be interpreted as “industrial growth” or “industrialization.” Proponents of the former view depict increasing industrial investment and manufacturing output as industrial growth: domestic demand, capital, and key inputs were export-dependent. For Mexico, at least, Beatty has settled the dispute: after the 1890s, industrialization took hold. This book argues that several key indicators capture domestic manufacturing’s potential to induce broader structural change: the flow of funds into manufacturing (usually into relatively large-scale, capital-intensive units, notwithstanding lucrative returns available in other sectors), the diversity of local industrial output (including wage goods, intermediate products, and some capital equipment), the substitution of domestic manufactures...

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