Globalization and the community: A case study of NAFTA's impact on Nogales, Sonora, Mexico

What has the economic impact of NAFTA been on Nogales, Sonora, Mexico? More than fifteen years after the implementation of NAFTA, this question is difficult to answer or even approach. Results of macroeconomic studies on NAFTA's (favorable or unfavorable) impact on Mexico are mixed and dependent upon the analytical metric used (trade, employment, or foreign direct investment) and the aggregation level of data (national, regional or industrial). The goal of this study is to evaluate NAFTA's economic impact on a single Mexican border community---Nogales, Sonora, Mexico. Nogales was selected, in part, because of the concentration of manufacturing activity its geographical location encourages and its long history of maquiladora operations. Given the concentration of economic activity on the U.S./Mexico border, Nogales is ideal for a crucial case study. A crucial case study is a case where a phenomenon is extreme or unique and by studying the occurrence of an extreme phenomenon, a greater understanding of that single case can be gained. The foundational assumption of the crucial case study is that NAFTA's economic impact (both its favorable and unfavorable effects) may be exaggerated in Mexico's border regions (specifically Nogales) when compared to Mexico's interior regions.;The theoretical focus for this dissertation is grounded in liberal economics, and border economics. Neoliberal economic theory emphasizes the positive-sum benefits of trade among nations with limited governmental tax, trade and regulatory interference that trade agreements like NAFTA are built upon. In addition, theoretical cues from border economics are used to evaluate the competition for foreign direct investment and its link to regional economic activity. Globalization is a backdrop of this dissertation and a transformationalist perspective of globalization was advanced which theorizes power as dynamic---relative positions of power ebbing and flowing among national, corporate, and non-governmental concerns.;The economic impact of NAFTA on Nogales was studied using multiple analytical strategies. The first step was a literature review focused on macroeconomic studies completed after the adoption of NAFTA. NAFTA's path to adoption as U.S. and Mexico trade policy was also revisited. A longitudinal microeconomic analysis was conducted for the border region and Nogales to examine performance links to the literature review. Finally, a battery of elite interviews using a snowballing methodology was undertaken to better understand NAFTA's impact on the community.;The working hypothesis of my study is that NAFTA has had a favorable economic impact on Nogales, its businesses, and its workers. These favorable benefits, however, are expected to be asymmetrically distributed, with most of the benefits going to the business sector and bypassing the community and its workers. This study confirmed that hypothesis by providing evidence of asymmetry in the distribution of economic benefits among the businesses, community and individuals.