1. INTRODUCTION

The Social Accounting Matrix (SAM) is a useful and powerful accounting tool for economic analysis, especially for evaluating economic growth and development. Taking ^{Quesnay's (1894}) tables as a reference, ^{Leontief (1941})¹developed the idea of economic circular flow, using what he called the Input-Output Matrix (IOM) to analyze economic transactions between an economy’s productive sectors. This matrix provides a detailed picture of the economic relationships of the productive sectors. Subsequently, ^{Stone (1956})²incorporated the institutional sectors into the IOM, which resulted in the now widely-known SAM. In contrast to the analysis with IOM, the use of SAM allows for a specific analysis of the productive sector’s relationship with households, government, societies, and the rest of the world.

The primary objective of this article is to demonstrate the usefulness of a SAM for inter-institutional accounting analysis and its relationship with the development of the Mexican economy. Based on an analysis of the inter-institutional relationships between economic agents, a bridge is drawn between the analysis of income production and distribution, including transactions from the government, corporations, and the rest of the world to households. This article also provides a methodological approach for analyzing the relationship between the SAM and economic development, and combines the available data from the productive sectors and the institutional account system. The SAM-Mexico 2013 presented here includes 21 economic sectors: 4 types of import goods industries; 4 institutional sectors subdivided into households by income level (low, medium, and high); public and private financial and non-financial corporations; government; and rest of the world. A SAM with the aforementioned level of disaggregation has not yet been published. The SAM was compiled using data from the 2013 IOM and the institutional accounts system, as well as data from INEGI's National Household Income and Expenditure Survey (ENIGH) and the balance of payments published by the Bank of Mexico.

This article is structured in five sections, including an introduction. The second section briefly reviews the definition and characteristics of a SAM. The third section then describes the methodology followed to develop the SAM-Mexico 2013, concluding with a presentation of the model. The fourth section goes on to provide a descriptive analysis of the Mexican economy based on the results from the model, which serve as a basis for subsequent inter-institutional analyses, and the final section offers some conclusions.

The SAM-Mexico 2013 constitutes a useful methodological tool for the analysis of economic development in Mexico, due to its level of disaggregation and the data presented. The proposed model will allow for the elaboration and evaluation of public policies that are better focused on addressing not only economic growth, but also the distribution of this growth between the institutional sectors of the economy.

2. DEFINITION AND CHARACTERISTICS OF THE SAM-MEXICO 2013

The elaboration and presentation format of the SAM is based on the System of National Accounts (SNA) methodology (^{UN, 1993} and ²⁰¹⁶) and has a similar structure to that of the SAMs published by the International Labor Organization (^{ILO], 2019}) and the International Food Policy Research Institute (^{Breisinger et al., 2009}). The SAM is an accounting representation of the transactions carried out between the productive and institutional sectors of the economy. Following the double-entry method, a square matrix is obtained in which each accounting record has a row (income) and column (expenditure); the total value of each row is equal to the value obtained in each column; and the total income of each sector is spent (including savings). On the production side, all the goods supplied are demanded by the institutional sectors and there are no inventories (^{Robinson et al., 2001}).

Several SAMs have been developed in Mexico. ^{Banegas and Blancas (2019}) analyze the effects of public spending on economic growth and social welfare using an aggregated 2011 SAM; ^{Núñez and Romero (2020}), meanwhile, study the effect of increasing private savings and granting subsidies to the consumption of domestic inputs using a 2012 SAM; ^{Casares et al. (2017}), for their part, observe the effect of fiscal policy and government transfers on household income using a 2003 SAM that disaggregates the household account by deciles; while ^{Blancas (2010)} elaborates an SAM which disaggregates the savings/investment account by the institutional sectors of central, commercial, and development banking, thus allowing for analysis of the relationship between current and capital account flows through what he calls inter-institutional analysis. Meanwhile, ^{Cardona et al. (2018}) estimate an SAM to determine an economy’s key productive sectors. Finally, ^{Chapa et al. (2019}) use an SAM to evaluate the expected effectiveness of an elderly assistance program. However, these studies do not advance a methodology with which to elaborate an SAM for Mexico using the available data. Therefore, there is a vital need to formulate a coherent and standardized methodology to elaborate an SAM that serves as a tool to analyze the country’s economic development.

The objectives of the SAM-Mexico 2013 are as follows: to shed light on the relationship between the national productive sector and the type of imports; to include the relationship between the productive and institutional sectors; and to disaggregate household income-expenditure into low, medium, and high. The matrix is compiled based on data from the IOM³2013 (^{INEGI, 2018a}); the institutional relationships are calculated using the data published in the System of National Accounts-Institutional Sector Accounts (^{INEGI, 2013b}); and the institutional sector of households is constructed using data from the 2014 National Survey of Household Incomes and Expenditures (Encuesta Nacional de Ingresos y Gastos de los Hogares, ENIGH) (^{INEGI, 2014}).⁴The aforementioned bases group an additional set of official information published by ^{INEGI (2013b} and ²⁰¹⁴⁾.

Table 1 shows the prototype SAM divided into three quadrants. The first integrates transactions for intermediate consumption, factor income, indirect taxes, and imported inputs; the second includes data on domestic and foreign demand for final goods and services; and the third includes data on inter-institutional transfers.

The institutional sectors included in the SAM-Mexico 2013 are Households, Public and private financial and non-financial corporations, Government, and Rest of the world.⁵ Table 2 shows the exchanges (income-expenditure) made between the productive and institutional sectors. The difference between income and expenditure of the institutional sectors is considered as savings-investment.

3. SAM-MEXICO 2013

4. ANALYSIS OF RESULTS

The findings from the SAM-Mexico 2013 (see Table 13) reflect the state of the Mexican economy’s productive structure and institutional sectors. In addition to production, the matrix includes the distribution of income and expenditure of the sectors, thus completing the bridge of analysis that forms a methodological tool for the study of economic development from an inter-institutional perspective of the Mexican productive structure.

A brief accounting analysis of the Mexican economy illustrates the usefulness of the SAM-Mexico 2013. Here, it should be noted that the current characteristics of the productive structure and income distribution are the result of neoliberal policies that, since the 1980s, have skewed the economy outward, thus promoting a strong dependence on international markets, imported inputs, and foreign direct investment, causing an outflow of economic surplus through trade balance deficits, profit remittances from foreign companies, and capital flight (^{Puyana, 2020}; ^{Romero, 2020}; ^{Blancas, 2015}). This translates into low economic growth rates with high-income concentration, along with higher levels of poverty and social exclusion of sectors of the population with lower levels of income and social opportunities⁷(^{Blancas and Aliphat, 2020}).

Quadrant I of the SAM shows that intermediate consumption represents 29% of total supply, while imports account for 14%; a ratio of almost 2 to 1 between local and imported inputs. Additionally, 48% of total imports consist of electrical, electronic, and transportation goods, with subsector G-Manufacture of electrical, electronic, and transportation goods concentrating 75% of the demand for these imported goods.

Table 14 shows the export trend of the primary and secondary sectors; more than 25% of their demand corresponds to exports. This is characteristic of the so-called global economies (^{List, 1997}), which, unlike national economies, do not privilege the development of national productive forces. Within a national economy, the objective is to ensure that production supplies the domestic market and not global production chains. On the production side, the main problem is imports from the secondary sector, as this sector, instead of functioning as an axis of integration between the primary and tertiary sectors within the national economy, serves as an articulator in the global economy at the expense of the national production system (^{Romero and Aliphat, 2019}; ^{Vázquez, 2020}).

In terms of institutional sectors (see Table 15), the breakdown of productive sectors and intermediate imports (15A) shows that 64% of imports correspond to intermediate goods and services destined for the secondary sector. Under the conditions of the SAM-Mexico 2013, greater demand from the secondary sector could increase imports, and an economic policy focused on promoting a greater demand for secondary goods would result in trade deficit balances with little effect on the national economy.

In terms of households (see Table 15B), 11% of total imports correspond to consumer goods, and there is a direct relationship between household income and the demand for imported consumer goods. Encouraging households to reduce their consumption of imported goods would strengthen the national economy. Furthermore, government transfers would strengthen the national productive structure through greater household demand, thus leading to greater economic growth, in addition to having a positive effect on income distribution and poverty reduction.

Table 15C shows that 10% of total imports correspond to investment assets, of which electrical, electronic, and transportation goods are the most demanded, with a 9 to 10 ratio. This indicates that there is a potential market for the production of capital goods in Mexico, equivalent to MXN$ 464 billion, a value higher than the national consumption of goods in the primary sector, according to data from the SAM.

The way in which added value is distributed among institutional sectors, as a result of the productive structure, is one of the central aspects that the SAM-Mexico 2013 makes visible. Table 16 indicates that 54% of remuneration payments and 39% of EBO correspond to high-income households, with 3.7% of remunerations going to low-income households. This shows that an economic policy strategy focused solely on economic growth will result in greater income concentration, accompanied by the inevitable effects on poverty growth (^{Expósito et al., 2017}).

Of the added value distributed between companies, 27% (corresponding to EBO), goes to private non-financial corporations with national or foreign control, while only 3.4% goes to financial corporations, and 6.8% to public non-financial corporations; findings indicate that private non-financial corporations lead the concentration of EBO (19% of total value-added). Capital replacement (depreciation) accounts for 23% of total value-added.

The total income of the institutional sectors is made up of payments for productive factors and inter-institutional transfers. When institutional sector income is disaggregated, it can be seen that low-income households receive 17% of their income from government transfers and 7% from transfers from the rest of the world (remittances) (see Table 17). Income generated by financial corporations has a high ratio with the government (11% of their income). Additionally, the rest of the world is closely related to non-financial corporations, which means that about 9% of their income corresponds to the payment of profits or transfers made by domestic financial corporations in the hands of non-residents.

Analyzing the way in which the institutional sectors spend their resources is essential for understanding the flow of money in the economy, and also allows for the formulation of government transfer strategies with a greater effect on the development of the domestic market. Table 18 presents spending by institutional sectors; households spend 4.7% of their income on the rest of the world, mainly on imports of consumer goods, with high-income households spending the largest amount of resources on the rest of the world (16%), a figure that is even higher than the proportion spent on government (14%). Low-income households allocate a greater proportion of their income to consumption, so their spending has a greater effect on the development of the domestic market. Private non-financial corporations allocate 10% of their income to transfers from abroad; the data suggest a structural flight of capital in the Mexican economy. Government spending is concentrated in consumption (33%) and transfers to households (22%). Finally, the rest of the world concentrates 92% of its income in consumption (exports from the national economy), 6% in transfers to households, and only 2% in transfers to companies, a figure that contrasts with the income it obtains from corporations.

Finally, Table 19 analyzes the composition of investment (FBKF) in the economy. It can be seen that 66% of investment is concentrated in the secondary sector; however, 54% is directed to construction. As can be seen in the SAM, investment in Mexico is mainly in buildings and not in machinery; 7.5% of investment spending in the services sector is concentrated in the I-Shopping, food, beverages, ice, and tobacco sector, and only 0.2% goes to the K-Telecommunications sector. Seventy times more is spent on FBKF for final primary consumer goods stores than on Information and Communication Technologies (ICT).

Regarding imports of investment assets, the Mexican economy is supplied with capital goods mainly from abroad; the percentage of imports related to electrical, electronic, and transportation goods is equivalent to the total expenditure per FBKF of the secondary sector (with the exception of construction spending). The data presented in Table 19 indicates that for every 100 pesos allocated to investment in Mexico in 2013, 54 were spent on construction activities, 15 on importing capital goods, and only 11 on domestic machinery and equipment.

5. CONCLUSIONS

The accounting analysis derived from the elaboration of the SAM-Mexico 2013 allows us to delve deeper into the intra- and inter-institutional relations of a systemic economy, finding a productive structure that is highly linked to the exterior and in which severe income distribution problems persist. The information provided by the SAM suggests that government transfers to households represent an increase in imports of intermediate goods, which is a crucial to the study of effective demand and economic growth.

In terms of economic development, the accounting analysis of the SAM-Mexico 2013 shows that low-income households are highly dependent on government transfers and resources from outside the economy (remittances); therefore, this category of households must increase their income obtained from the productive sphere, either through higher wages or through EBO, if possible. One proposal that could be derived from this analysis is to consolidate cooperatives that distribute the EBO generated among workers.

As a result of the accounting analysis, this article will allow for future economic development studies that consider the use of the SAM-Mexico 2013 and deepen the inter-institutional analysis through accounting multipliers and/or computable general equilibrium models.