Essays on Public Policies in Mexico: Pollution, Employment and Drug Crime

Abstract

This doctoral thesis talks about the importance of the analysis and evaluation of public policies. The case of Mexico is used to illustrate this importance of this stage during the policy making process. The first policy to be analyzed is the implementation of the bus rapid transit (BRT) network in Mexico City. This policy was introduced to reduce congestion, increase city transport efficiency and cut air polluting emissions. In June 2005, the first BRT line in the metropolitan area began service. I use the differences-in-differences technique to make the first quantitative assessment of the policy impact of a BRT system on air polluting emissions. Results show that BRT constitutes an effective environmental policy, reducing emissions of CO, NOX, and PM10. The second policy analyzed here was implemented during the administration of Mexican President Felipe Calderón, who took office in December 2006. From the outset, his government deployed an aggressive security policy to fight drug trafficking organizations, in what became known as the ‘Mexican Drug War’. In this article, I study the effects of the rise in the homicide rate and changes in the military budget on economic growth. Using dynamic panel data econometrics, I find that while the growth in the number of homicides had negative and significant effects on state GDP growth, state military expenditure aimed at fighting drug trafficking had a positive and significant effect on the per capita economic growth rate. The third policy that is evaluated here is from 2012. The Mexican government reformed its minimum wage territorial policy and reduced the previous three minimum wage areas to only two. The minimum wage in the area that disappeared was increased to be on a par with that fixed for the area with the highest minimum wage. The results from this natural experiment show that the increase of minimum wages in these territories resulted in a reduction in employment, above all among male workers employed in the formal labor market. Finally, public policy recommendations are made and future research lines are proposed as logical next steps given the results of the evaluations made throughout this thesis.