Policies to Eradicate Economic Inequality in Mexico. The World Bank’s Report of Poverty and Equity in Mexico

he World Banks’ Informe de pobreza y equidad en México (Report of Poverty and Equity in Mexico) (2024, available at https://openknowledge.worldbank.org/entities/publication/d5c89a1f-acf7-4d5d-939f-496988a115db) states that eradicating economic inequality has three dimensions: territorial development and infrastructure to address social vulnerability; excellent public services in health, education, culture, mobility, access to justice, and security, as conditions for a universally accessible standard of living for everyone; and inclusive economic growth that expands opportunities for the universal enjoyment of agency. The report presents different alternatives to eradicate economic inequality in our country.

DIAGNOSIS OF INEQUALITY IN MEXICO
The report’s perspective is based on policies documented for their effectiveness and on expert discussions over the past two decades aimed at addressing the root causes of inequality. Among the variables that contribute to eradicating inequality are:

1. Inclusion: without it, there will be growth accompanied by poverty, and the gaps of social inequality will widen. Mexico lacks social and economic inclusion, a national problem that has remained unresolved throughout centuries of its independent life.
2. Agriculture: Economic inequality disproportionately affects families engaged in small-scale agriculture. Without an inclusion policy for this sector, it will be impossible to eliminate it. The most vulnerable groups continue to be found in rural areas and semi-rural communities; moreover, they face organized crime, which has caused forced migration and the erosion of the social fabric.
3. Informality: the report indicates that informal economy exacerbates inequality. Mexico faces high rates of informality, which extends inequality throughout the entire labor and life cycle. Informality has been increasing and has not decreased in the last decade.
4. Education: it remains the key for social mobility; in fact, it is necessary to eradicate economic inequality. Full-time schools that provide meals are still, along with focalized social programs, one of the fundamental tools to end economic inequality. However, the financing of Mexican education is stagnant, which strengthens social inequality, as education is a lever for social mobility. Mexico is still very far away from the minimum recommended investment in education, culture and education quality at all levels.Infrastructure and excellent public services, beyond monetary transfers: the report confirms the need for excellent and universal public infrastructure and services, as well as targeted programs, so that those suffering from extreme poverty receive economic transfers. Cash transfers are neither effective nor sufficient to eradicate poverty; they do not increase output, but they do raise the price level in the long term. Mexico lacks infrastructure and a convergent state policy to maintain what has already been built. Without modern infrastructure that is constantly maintained, it is impossible to facilitate the exchanges and social mobility that the country requires. In short, Mexico lacks a state policy focused on aggregate supply and instead promotes programs that stimulate aggregate demand without reducing economic and social inequality.

THE FINANCING OF MEXICAN EDUCATION IS STAGNANT, WHICH STRENGTHENS SOCIAL INEQUALITY, AS EDUCATION IS A LEVER FOR SOCIAL MOBILITY

SPECIFIC POLICIES TO ERADICATE INEQUALITY
The Informe de pobreza y equidad en México proposes concrete policies for Mexico, among which are:

1. Social deficiencies, social vulnerability and extreme poverty: all three of these diminish when: a) economic growth increases; b) we build a social focalized non-partisan policy, centered in improving living standards, y c) territorial development goes with quality infrastructure for public services, including mobility, access to justice, education, culture, safety, etc. Mexico has a remaining task to reduce social vulnerability through territorial development and infrastructure; that is, to promote long-term aggregate supply policies, not ruling out the need for an autonomous body of the Mexican State that proposes, in an infrastructure council, long-term works and large amounts of investment in health, communications, culture, security, education, science and technology.
2. Reducing the gaps in economic and productive participation. Informality creates a gap in economic participation by excluding large sectors of the Mexican economy from social security and taxation, resulting in greater participation in productive and financial activities that empower individuals and improve their quality of life. Mexico has pending tasks to drastically reduce informality in exchange for providing excellent social security services, such as attractive retirement programs, mortgage loans, and high-quality healthcare for those who join the formal economy.
3. Education, focused on three fundamental aspects: a) reading comprehension; it is increasingly clear that encyclopedic approaches, as well as the value-laden approach of an adult world alien to the child, do not result in better education; b) mathematics; mastery of mathematics is a barrier to entry to better income and job opportunities in the long term; an education that does not focus on them does not translate into greater social mobility; and c) social cooperation; countries with excellent education do not focus on grades in the first ten years of a child’s educational life, but on their ability to cooperate socially in group activities, community activities, etc.

The report includes many more alternatives for the Mexican economy. It is not possible to reduce poverty while the number of Mexicans unable to afford necessities has increased to forty-five million, with alarming increases in Oaxaca and Chiapas. According to the data published by the National Institute of Geography and Statistics (INEGI) in 2025, sixty percent of the population faces at least one social deprivation, and nearly fifty percent lack social security. Evidence shows that monetary transfers are not effective nor sufficient to eradicate poverty.

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