Wednesday, September 22, 2010

An Illustration of Inequality

Two short notes in the Mexican papers this morning jumped out at me: first, 57 percent of the nation's municipalities don't have a single bank. Second, 86 percent of the nation's businesses have no access to credit.

I've seen versions of that first stat (I posted about an estimate of 64 percent earlier this year), but that second figure is astounding. Inequality is often described as a moral and fairness issue, and to me it certainly is. However, here it's also an issue of efficiency objectively speaking. How many more jobs could be created if the smaller firms could more easily borrow money and expand their operations? What would be the impact on Mexico's GDP if more than 15 percent of the nation's businesses could get their hands on a loan?

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