Since 2018, the Mexican government has pursued a strategy of expanding state control over key sectors of the economy, notably energy, infrastructure, and transportation. This shift has been framed as a corrective to decades of liberalization that, according to the administration, left strategic industries vulnerable to foreign influence and private monopolies. Yet the mechanisms through which this state-led development has unfolded—particularly the preferential treatment of public entities and the growing role of the military—are raising concerns about market concentration, regulatory independence, and long-term institutional integrity.
At the center of this transformation are state-owned enterprises such as Pemex and the Federal Electricity Commission (CFE), which have received regulatory and fiscal support to regain market share in oil, gas, and electricity. These firms have been shielded from competition through policy instruments that include favorable tax regimes and administrative decisions limiting private sector participation. In parallel, the military has emerged as a dominant actor in civilian infrastructure. It now operates more than 20 airports and recently launched Mexicana de Aviación, a state-run airline revived under military management.
This consolidation of economic functions within state entities has coincided with a weakening of regulatory oversight. The Federal Economic Competition Commission (COFECE), Mexico’s antitrust watchdog, has seen its budget reduced by over 40% in real terms since 2018. Its capacity to investigate and sanction anti-competitive behavior has been curtailed not only by financial constraints but also by political pressure. Meanwhile, several infrastructure projects managed by military bodies have bypassed standard public procurement rules, limiting transparency and accountability.
Shielding state firms from competition may entrench inefficiencies and reduce incentives for service improvement.
Supporters of this model argue that reclaiming control over strategic sectors enhances national sovereignty and reduces dependence on foreign capital. They contend that previous administrations tolerated or even facilitated private monopolies that failed to deliver broad-based benefits. From this perspective, state-led development is not only economically justified but also politically necessary to reverse what are seen as the excesses of neoliberal reform.
However, critics warn that replacing private monopolies with public ones does little to improve efficiency or innovation. Shielding state firms from competition may entrench inefficiencies and reduce incentives for service improvement. The military’s expanding economic footprint—unprecedented in scope—raises additional concerns about civilian oversight and democratic accountability. The Supreme Court has already ruled against executive decrees that sought to limit transparency in projects managed by military entities, underscoring tensions between executive ambitions and constitutional checks.
The broader institutional implications are significant. The erosion of independent regulatory bodies like COFECE diminishes one of the few counterweights to executive power in economic governance. As state entities consolidate control over markets without robust oversight mechanisms, the risk grows that economic policy will be driven more by political imperatives than by considerations of efficiency or public interest.
While market concentration is not new in Mexico, its current form—state-backed and militarized—marks a departure from previous models. Whether this approach yields long-term developmental gains or entrenches new inefficiencies will depend on future administrations’ willingness to restore regulatory balance and ensure transparency across all sectors.
