In the voting model presented in Chapter 1, voters are motivated by patronage and vote buying, by government performance, by ideological appeals, and by expectations of political violence. The previous chapter assessed the logic of vote buying and its effectiveness in maintaining the PRI regime. This chapter assesses the role of economic performance in maintaining support for the autocratic regime.

As shown in Chapter 2, from its creation in 1929 until the late 1970s the PRI presided over a long period of economic growth. In Mexico as in most Latin American countries, the 1980s was a lost decade in terms of economic growth. High inflation rates, sharp deterioration of real wages, and underemployment in the cities characterized the decade. The Mexican economy had two-digit average annual inflation rates (or more), and real wages declined by more than 60 percent. In the 1990s, President Carlos Salinas achieved macroeconomic stabilization. Yet, despite macroeconomic stabilization, the Mexican economy remained stagnant during his administration, barely growing at an average annual rate of 3 percent.

The 1994 peso crisis represented another serious setback. The first two years of the Zedillo administration saw a sharp economic decline: in 1995, GNP dropped by almost 7 percent – for Mexico, a recession comparable to the crash of 1929. Industrial wages declined in real terms by more than 30 percent in just two years, and the currency was devalued, by around 250 percent overall, between December 1994 and December 1996. However, although serious, this second recession was short-lived.