The Import Substitution Model (ISM) Lessons from the Mexican Miracle for the 21st Century
Dr. Oscar David Rojas Silva
Abstract
This article reexamines Mexico’s Import Substitution Model (ISM), implemented between 1939 and 1970, as a historically grounded strategy of state-led industrialization shaped by both national revolutionary transformations and the broader dynamics of the U.S.-centered Global Economic State (GES). Drawing on Marxist political economy and Latin American structuralist theory, Rojas Silva argues that the ISM represented the economic continuation of the Mexican Revolution: a project through which the post-Cárdenas Social State built institutional capacity, strategic public enterprises, and coordinated fiscal, monetary, and industrial policies to expand the domestic market and accelerate industrial growth. The study reconstructs the two sequenced phases of ISI: an initial stage of infrastructure formation financed through controlled inflation and devaluation, followed by a stabilization phase marked by rising external constraints; and demonstrates that chronic current account imbalances and dependency on foreign capital ultimately limited Mexico’s ability to advance to higher levels of industrial substitution. Rather than interpreting the ISM as a failure, the article situates its limits within the asymmetric power relations of U.S. hegemony and traces how these structural constraints were intensified during the neoliberal era (1982–2018), which dismantled public assets and subordinated economic policy to financial imperatives. Rojas Silva concludes that contemporary geopolitical shifts, combined with Mexico’s renewed turn toward planning and industrial policy (embodied in Plan México), create conditions to revisit and update the ISI framework. A “Mexican Miracle 2.0,” he suggests, is possible if policymakers confront the structural bottlenecks of dependency, rebuild domestic productive capacity, and adopt an epistemological shift that reintegrates the state, development strategy, and global power relations into economic analysis.
Keywords
ISM, import substitution industrialization, Mexican revolution, state-led development, global economic state, neoliberalism, industrial policy, Plan México, Dr. Oscar David Rojas Silva
