Research Library

Although there are enormous potential benefits for Mexico's energy sector in the future, there are also important challenges the country must overcome to fully realize its energy potential. One of them has to do with the land ownership and land use regime in Mexico. As the legislative debate on the new Ley de Petróleos and the Ley de la Comisión Federal de Electricidad (Petroleum Act and Federal Electric Utility Act) proceeded in the summer of 2014, the Mexican Congress anticipated potential land-related conflicts associated with exploration and production activities related to hydrocarbons and new energy-related infrastructure projects. These potential conflicts stem from the fact that all of these projects will necessarily require the right of way to access and work on the resources in the subsoil of privately owned as well as on so-called “socially owned” lands in regions targeted for energy development. Thus, the Mexican Congress sought to avoid land-related conflicts by including language related to land ownership and use in the new energy legislation. The legislation, however, may not be able to prevent such conflicts.

The decade 2003-2013 was an exceptional one for Latin America in social terms, but less clearly so in economic terms. Growth slowed down significantly after the exceptional factors that fed the 2003-2007 boom came to an end. The possible unwinding of the super-cycle in commodity prices and, to a lesser extent, of the expansionary monetary policy of the United States, has added new challenges. But the major issue is the need to overcome the poor long-term economic performance that has characterized the region in the post-market reforms period, particularly by adopting active production sector development strategies.

The Trans-Pacific Partnership Agreement offers an opportunity to deepen U.S.-Mexico economic ties without reopening the still contentious North American Free Trade Agreement for negotiation. It may also serve as a vehicle for advancing the current Mexican government’s economic reform agenda. The leaders of the U.S. and Mexico believe that the TPP will bolster domestic economic growth.

Public finance fellow John Diamond recently testified before the Texas House Ways and Means Committee on dynamic scoring and analysis use in tax policy.

Public finance fellow John Diamond analyzed the proposed Tax Reform Act of 2014 in testimony before the House Subcommittee on Select Revenue Measures on July 30, 2014.

Neal Lane, senior fellow in science and technology policy, testified before the Senate Committee on Commerce, Science and Transportation on July 17, 2014. Lane is co-chair of the American Academy of Arts and Science's project on New Models for U.S. Science and Technology Policy, and his testimony addressed the project's objective of sustaining a long-term, nonpartisan, national focus on science and technology policy issues of vital importance to the country.

This issue brief identifies the four main reforms that the new Prime Minister Narendra Modi’s government must undertake to revive the manufacturing industry in India.

Under proposed legislation to implement Mexico’s energy reforms, Pemex will remain a privileged state operator supporting exploration and production in most of the country's proven onshore and shallow water fields. It is not known if energy reform will effectively turn Pemex into a firm able to compete without policy bias against private investors.

Mexico's organized crime groups have expanded into areas that include the theft of crude oil, gas and gasoline. The impact of organized crime on the energy sector is a real threat to the intended effects of Mexico's energy reforms.

Fossil fuel subsidies have allowed energy exporting countries to distribute resource revenue, bolstering legitimacy for governments, many of which are not democratically elected. But subsidy benefits are dwarfed by the harmful consequences of encouraging uneconomic use of energy. Now, with consumption posing a threat to long-term exports, governments face a heightened need to raise prices that have come to be viewed as entitlements. While reforms of state benefits are notoriously politically dangerous, previous experience shows that subsidies can be rolled back without undermining government legitimacy — even in autocratic settings — given proper preparation.