Trade agreements and government failures

The Rockridge Institute argues that globalization and trade agreement affected international migration, as laborers moved to where they could find jobs. Raising the standard of living around the world, a promise the North American Free Trade Agreement (NAFTA), Central American Free Trade Agreement (CAFTA), the World Trade Organization (WTO), the International Monetary Fund (IMF), and the World Bank, would reduce the economic incentive for illegal immigration. However, governments have not followed through on all of these programs.

The Mexican government failed to make promised investments of billions of dollars in roads, schooling, sanitation, housing, and other infrastructure to accommodate the new maquiladoras (border factories) envisioned under NAFTA. As a result few were built, and China surpassed Mexico in goods produced for the United States market. Instead of the anticipated increase, the number of manufacturing jobs in Mexico dropped from 4.1 million in 2000 to 3.5 million in 2004. The 1994 economic crisis in Mexico,[34] which occurred the year NAFTA went into effect, resulted in a devaluation of the Mexican peso, decreasing the wages of Mexican workers relative to those in the United States. Meanwhile, more efficient agricultural operations in the United States and the elimination of tariffs under NAFTA caused the price of corn to fall 70% in Mexico between 1994 and 2001, and the number of farm jobs to decrease from 8.1 million in 1993 to 6.8 million in 2002.

Corruption hurts the economy of Mexico, which in turn leads to migration to the United States. Mexico was perceived as the 72nd least corrupt state out of 179 according to Transparency International's 2006 Corruption Perceptions Index, a survey of international business (for comparison, the United States ranked as the 20th least corrupt). Global Integrity estimates that in 2006 corruption cost the Mexican economy $60 billion per year. A survey by the Mexican research firm, Centro de Estudios Económicos del Sector Privado, found that 79 percent of companies in Mexico believe that “illegal transactions” are a serious obstacle to business development.