Learning the Limits of Power: Privatization and State-Labor Interactions in Mexico

Despite repeated conflict with organized labor, the government of Carlos Salinas de Gortari (1988–94) pushed an aggressive divestment agenda that transformed Mexico into Latin America's leading privatizer. Explanations of Salinas's achievements typically emphasize centralized presidential power (including control over the ruling party) and autonomy; technocratic and political savvy; and weak labor opposition. This article questions such a pure capacity-outcome approach. Of equal importance are the learning effects of repeated interaction between the state and labor, which changed the course of divestment struggles and thereby influenced their outcomes. Lessons learned in successive confrontations led to patterns of interaction conducive to widescale privatization. The article develops this argument through comparative analysis of major divestment episodes in the aviation, mining, steel, and telecommunications sectors.