Economy-wide impact of conventional development policies in oil-exporting developing countries: The case of Mexico

© 2021In Mexico, since the 1970's, the O&G sector has been and still is at the center of national development strategies. This faith in the O&G sector for development and energy security is shared by most oil-exporting developing countries. Understanding their present impact potential is relevant to identify insights on their implementation, limitations or even justify their abandonment. This paper aims to analyze the effectiveness of three of such conventional policies regarding their economic, environmental, and social impacts. We implement a scenario methodology, based on the input-output framework, that allows simulating different levels of success in the implementation of these policies. The results confirm the relevance of the O&G sector for the country as its collapse would induce severe economic contractions (about ¿7%) and job losses (over 350k). Moreover, even though the results suggest that the success of these policies would create substantial benefits, especially when applied in tandem (up to 2.5% of economic growth and around 150k more jobs); other relevant variables that might affect or even nullify the effectiveness of these policies are not considered. Therefore, policymakers of oil-exporting countries should pursue further evidence and pay attention to sustainable development considerations, before judging conventional oil-based development policy strategies.