Formulario Nº1 Complementario: Reemplazo de Participantes Inscritos/as (F1C).

After the Cardenas presidency, the regime would make a turn towards the prioritisation of industrialisation and capitalist development. This allowed for the incorporation into the regime of the private business class represented by several employer organisations, who would grow in power, effectively becoming the fourth unofficial sector, and perhaps the most powerful, of the regime’s corporatist structure (Gonzalez Casanova, 1965).

The ISI model was adopted by Mexico in the early 1940s, and social policy would become an important element of the model, as its complementary or corrective mechanism (Barba, 2006, Barba, 2004). The cornerstone of social protection in the country is the enactment of the Social Insurance Law (LSS) and the creation of the Mexican Institute for Social Insurance (IMSS for its acronym in Spanish) in 1943. After much hesitation during the previous administration, the government’s final decision to implement social insurance was the product of pressures from labour organisations and the need for the regime to guarantee their support, especially after the contested elections of 1940 (Dion, 2005). It can be claimed that social insurance sealed the corporatist pact between the state and organised industrial workers.

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The IMSS was structured around a ‘Bismarckian’ social insurance model3, conducted by the state with tripartite participation in its administration incorporating workers and employers representatives. Contributions were also tripartite. Insurance became compulsory for all employees and benefits were extended to their families. The self-employed, domestic workers, peasants and workers in the rural sector and independent professionals were left out (IMSS, 1996).

The LSS considered protection for sickness, maternity, work injuries, disablement and old-age, plus the death of the insured worker; namely all contingencies commonly covered by systems around the world except unemployment, with the argument that it was already covered by the severance payments that employers had to pay for unjustified dismissals, according to the Federal Labour Law enacted in 1931 (Brachet-Marquez 2007).

Little was offered for the population sectors excluded from social insurance a part from basic health services and public health campaigns operated by the Secretariat for Health also created in 1943. Basic health services commonly required the payment of fees at the point of service and were very limited; they intended to substitute the rural health centres network that had been president Cardenas had try to create. At the end, the creation of the Secretariat for Health represented a duplication of normative and budgetary functions with the IMSS and the creation of dual health system that promoted inequality: on one side the IMSS services, on the other the ministry’s services, underfinanced and with far lower benefit levels (Frenk et al., 1999, Brachet- Marquez, 2007, Bosch and Campos-Vazquez, 2010, Lakin, 2010).

The IMSS expanded slowly throughout the country in the next two decades, concentrating in large urban areas (IMSS 1996). Social spending was kept at low levels compared to countries like Argentina and Chile. The state leaned heavily towards a strategy of industrialisation and capitalist development. Public spending was largely devoted to the promotion of a domestic industry. However, there were other policies not part of the social security system that fulfilled a

3 _{This was the model promoted by the International Labour Organisation and adopted in several Latin American} countries during the same decade (Frenk et al. 1999, Mesa-Lago 2000), as well as in some southern European countries (Barrientos 2009).

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social role. Land redistribution, although significantly slowed down after the Cardenas period, was still particularly important for the rural sector and for the regime as an instrument of social control. Food subsidies programmes were also important, along with the rapid expansion of basic education (Hansen, 1971, Barba, 2006, Barba, 2004).

In 1960 the Institute of Social Security and Services for State Workers (ISSSTE for its acronym in Spanish) was created. The ISSSTE substituted the Department of Retirement and Civil Pensions but with an increase in all benefit levels. Its creation represented a further fragmentation of the welfare system, because the IMSS could have assumed this functions (ISSSTE, 2011). Although the IMSS could have been assigned the responsibility of social security for public servants, pressures from public sector unions first to surpass the benefit levels prompted the creation of a separate legislation for them. Insurance systems for oil, railroad and electricity workers were also enhanced during those years and a special scheme was created for banking sector employees (IMSS, 1996, Frenk et al., 1999). Social insurance institutions would become the main articulation mechanism between the ISI model and the corporatist arrangements between the state and its urban allies of the industrialising coalition (Barba, 2004, Barba, 2006).

By the 1960s the ISI model in Mexico had generated very high economic growth rates but an extremely unequal development. Pressures for social change began to rise. Railroad and health workers’ strikes and the student movement of 1968 were all signs of that social unrest. Hence, with its political legitimacy at risk, the regime attempted a course change, though never abandoning its authoritarian and corporatist natures (Hansen, 1971, Brachet-Marquez, 2007, Barba, 2006, Barba, 2004)

An important element of the course change was a pretended expansion of the social protection system. However, attempts at a fiscal reform that would have been necessary to fund that expansion failed due to the opposition of what had become a very powerful business sector (Hansen, 1971, Brachet-Marquez, 2007).

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