Development across Border Cities

Today, the business news website ‘Quartz’ mentioned in a post (https://qz.com/1045496/nafta-renegotiation-how-the-us-could-get-a-better-deal-without-changing-nafta/) a report in which I contributed during my 2015 Summer Internship at the Wilson Center.  We did a quantitative analysis to measure the economic dynamism that exist across the border between the U.S. and Mexico. This report provides a very interesting analysis on the binational interaction across border cities.

Border cities usually lag behind in terms of economic development and they deal with issues that are not very salient in other parts of the country. However, what we found is that even if there is a starking  difference of development across different parts -and sides- of the border (you can read Daron Acemoglu and James Robinson’s “Why Nations Fail?” for more about this differential in terms of economic development across the Mexico-U.S. border), it is also the interaction between the two sides of the border that strengthens them. Development, which is my main research interest, is positively impacted by trade between the U.S. and Mexico, as complementary clusters have developed in both sides.

Of course, there are many other factors that contribute to the economic development of a region, but what we found in this study is that economic development and welfare across border cities in the U.S. and Mexico seem to be boosted by trade, whenever we construct complementarities across sides.

 

About Alma Bezares

PhD Candidate Economics and Politics. Interested in development and state capacity.
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