State-Run Oil

This is a great article from The Economist.

Two things to think about:

1: If Mexico sees 2/5ths of its tax base dry up what happens to the Mexican Government?

2: If the Mexican government decides to raise taxes because of the lost oil revenues will the US see an influx of immigrants, or will the Mexican people riot to privatize the oil industry?

I think cases such as these provide interesting glimpses into what state-controlled industries behave like, especially when there are no private companies to keep them in check.

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