The Microeconomics of Public Choice in Developing Economies: A Case Study of One Mexican Village

Abstract

While development economics tends to focus on national and international policy, local government and social institutions can also play a critical role in either promoting or inhibiting economic prosperity. In this essay, Cowen describes the significant problems associated with the cargo system of local governance in Opan, Mexico. Despite considerable institutional inefficiencies, Cowen argues that ineffective local governance can sometimes benefit residents in warding off attempts by outside parties to exert political pressure on local officials.

Keywords: cargo system, institutional influence, economic prosperity

JEL Classification: O12