State Transformation for Plan México

State Transformation for Plan México. A Mission-Oriented Approach to Delivering Shared Prosperity | Policy Report No. 2026/04

Authors:

• Mariana Mazzucato | Professor in the Economics of Innovation and Public Value, University College London, and Founding Director of the UCL Institute for Innovation and Public Purpose
• Lara Merling | Research Fellow, UCL Institute for Innovation and Public Purpose

Since 2018, Mexico has more than doubled its minimum wage in real terms and cut multidimensional poverty from 41.9% to 29.6% of the population. However, these gains now run ahead of the productive transformation needed to sustain them, and public investment — the plan’s most important lever — has fallen to its lowest level in decades. 

Our findings and recommendations:

• Protect productive public investment and redesign fiscal rules to recognise what public investment builds, not only what borrowing costs.
• Translate the plan’s vertical targets into challenges (water security, clean energy, health for all, food sovereignty) that require cross-ministerial and cross-sectoral investment and innovation.
• Coordinate development banks under a unified system, lending earlier and longer against the mission portfolios.
• Use procurement strategically to aggregate public demand and create markets so that small firms can scale.
• Attach conditions of reciprocity to every form of public support, so that firms receiving finance, contracts or concessions commit to productive investment, domestic suppliers, decent work and reinvestment.
• Build the capabilities to evaluate, experiment and adapt inside government.
• Build participation in from design through to evaluation: Give communities, local producers and subnational authorities a standing role in shaping mission outcomes, implementation and evaluation.
• Test and scale the delivery model through a mission sandbox in the Tula basin, whose restoration by 2030 is already a presidential commitment.

Achieving prosperidad compartida under Plan México requires more than setting ambitious national targets; it demands a fundamental transformation of state capacity and governance tools. 

This report is grounded in a year of conversations and workshops with Mexican public officials, government representatives and academics, and was made possible by research funding from the Open Society Foundations.

Reference:

Mazzucato, M. and Merling, L. (2026). State Transformation for plan Mexico. A Mission-Oriented Approach to Delivering Shared Prosperity. UCL Institute for Innovation and Public Purpose, IIPP Policy Report 2026/04. ISBN: 978-1-917384-42-1

Available at:  https://www.ucl.ac.uk/bartlett/publications/2026/aug/state-transformation-plan-mexico

This policy report is part of the UCL Institute for Innovation and Public Purpose’s (UCL IIPP) publication series.
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