The Price of Public Underinvestment in Mexico
A two-tiered road system in Mexico is a symptom of a nation that does not invest in its people
Greater Mexico City
April 2023
Google Maps tells me to exit the highway to my right in a hundred meters. I do not see an off ramp. I keep going and drive right past the exit I do not see. I quickly realize the exit is what, at first glance, appeared to be an unpaved shoulder. A closer look, as I drive away realizing I missed the exit, shows there is an entrance to a road where the exit is.
In the United States, freeway exits are long and can be seen from far-away, making it easy to slowly reduce one’s speed and use a blinker. In Mexico, I realize quickly, it is like a punch out of nowhere. You realize you are about to miss the exit right before you miss it because there is little indication that it is an exit. Signage might indicate an approaching exit but without actually recognizing the exit on an unfamiliar road the signage is useless.
And if one misses an exit, it is unforgiving. While driving in the state of Morelos and missing an exit, Google indicated the next turnaround was a good 10 kilometers away. As we approached the turnaround, nothing looking like a turnaround appeared. I then realized the turnaround was a very narrow patch between the two sides of the freeway. Again, no ramp to slow down and, even more scary, no ramp to speed up once on the other side. Nervous and already flustered after missing the previous exit (and the overall experience of driving in Mexico), I decide not to do this dangerous turnaround.
The next possible turnaround is another 30 kilometers away, this time inside Mexico City. Moreover, along the way there is a toll booth that is 180 pesos, or about 10 dollars at the time. Missing exits is not only time consuming and frustrating but expensive.
As we travel our 30 kilometers toward our turnaround, we pass multiple towns that have no access to the freeway. (If they did, we could have simply turned around there.)
I ask a Mexican friend Art, who previously worked for the PRI (one of Mexico’s major political parties), why these communities are cut off from the highway.
“It’s not a priority for the road construction companies to connect these villages. The freeways connect major urban areas and smaller touristic towns but often pass the smaller, less prosperous villages along the way.”
“But the government is giving the concessions to build these freeways. Can’t they put conditions on the concessions, saying that all villages should have access to the freeway?” I reply, shocked.
“Well, many politicians are also involved in the road construction so they often aren’t acting as a representative of the people but rather as a businessperson,” he replies.
Indeed, certain companies receive a significant number of the infrastructure projects — and thus the right to collect tolls — through legally questionable means. Cases of overcharging for infrastructure in exchange for kickbacks to officials have been exposed in recent years.
Art says there is also a hidden maña, or trick, in the lack of exits and entrances on the highways. “If you miss your exit, it’ll cost you dearly,” referring to the fact that after many exits there is a toll booth.
In addition to hurting the wallet of a lost driver, the lack of on and off-ramps economically hurts many towns. Drivers will stop for services in towns connected to the freeway.
Before the construction of these toll freeways, the primary way to drive through Mexico was by the libre, which is often a windy, 1 to 2 lane road in each direction. The libre still exists and is toll free but is often less direct and the speed limits are much lower. The towns the toll freeway bypasses do have access to the libre.
As one study points out, towns connected to the older libre but not connected to newer toll freeways previously derived a significant income from traffic that stopped for services. Many still do use the libre but it is far less than in the prior to the toll freeway construction.
In addition to being slower and windier, the libres are often in disrepair and quite dangerous. Potholes are common and there is rarely a middle divider. The lack of a middle divider means people often aggressively pass through the opposite lane, heightening the risk of head on collisions.
To describe Mexico’s transportation infrastructure as poor is not accurate; its toll roads are in excellent condition and extend throughout the nation. Yet as noted earlier, they are expensive and leave out many communities. It is more accurate to say that Mexico’s privately financed and owned infrastructure is excellent while its public infrastructure is very poor.
Mexico collects fewer taxes per capita than the Bahamas, a fiscal paradise, making it, in the words of one analyst, an “anemic state” incapable of providing necessary services.
As an anemic state incapable of providing necessary services, Mexico must privatize them. If Mexico must privatize them, this makes them inaccessible to many as they are not created for the public good but rather private profit.
Over time, the privatization of transportation infrastructure is normalized. While tolls exist on some specific highways in the United States, they are far less common (and in some states nearly non-existent). Where they do exist, the roads are still public.
As such, the abundance of private toll roads in Mexico shocks many Americans. When I mention this shock to Mexicans, it is met with shrugs. This is what they have come to expect from their government.
The exorbitant fees to use quality, fast roads in Mexico is but one example of how public goods and services that are fully provided for all citizens in many industrialized, high income nations are provided at high fees in Mexico. Public schools may not charge tuition but will often require uniforms and supplies to be bought by students. For those without employer-provided health insurance (a huge number, given how over half of Mexico is in the informal economy), health care for many disorders is often expensive and thus out of reach. Two friends in a long-term relationship want to start a family but neither has formal employment and thus lack private health insurance. To have a baby, it would cost over 1,000 dollars in medical expenses, a massive sum in a country where the minimum wage is around 10 dollars a day.
Public pensions are also out of reach for anyone in the informal economy. “Old age for many is just continuous work and poverty,” a middle-aged friend, who works in the informal sector, says sadly.
As Invisible China by Scott Rozelle points out, working in the informal economy creates a vicious cycle for citizens and country alike (Roselle’s book focuses on China but frequently references Mexico as a case study about the dangers of the informal economy). The workers are cut off from many state provided benefits and the state does not collect taxes from the informal workers. Less tax revenue means less state money for benefits, development and education. Less money for state programs means less investment in a nation’s people and continued lower levels of public infrastructure (read public), health and education.
And so the private sector fills in some of the gap, but the cost to a user is exorbitant and highly unequal access — as toll roads show.
