The Mexican banking sector: A case study of distributional coalitions and state capture

This paper studies the Mexican banking sector as a distributional coalition that engages in state capture in order to increase the income of its members. In doing so, it reviews the historical process from which the distributional coalition emerged, as well as it relation with the Mexican state throughout the 20th century. The case study is centered on the banks’ privatization process and their later bail out, which happened in the decade of the 1990s. It argues that the specificities and outcomes of both processes, which have imply the transfer of wealth from taxpayers to a small minority, can be understood in terms of the emergence and consolidation in Mexico of a financial distributional coalition and state capture.