After independence in 1821, the Mexican economy struggled to grow for several decades. Sustained economic growth appeared in the late nineteenth century under the dictator Porfirio Díaz, who seized power in 1876 and ruled for more than three decades. Under this regime, known in the historiography as the Porfiriato, virtually all branches of the economy experienced a notable expansion, in sharp contrast to the previous half century. Social Foundations of Limited Dictatorship tackles the puzzle of growth under dictatorships. Contrary to the perception that authoritarian regimes weaken property rights because of permanent threats of predation on asset holders, Armando Razo demonstrates that the Díaz dictatorship was able to construct credible commitments conducive to economic growth.
The author aims to better understand how authoritarian regimes are capable of fostering growth in absence of democratic institutions responsible to enforce property rights. In chapter 2, Razo develops a network theory of private protection...
