Infrastructure finance has taken a dramatic shift since the mid 1980s in Mexico. The public sector has traditionally provided infrastructure but has been both unresponsive to local needs and inefficient in resource allocation. Furthermore, the central government has become increasingly constrained by budget deficits and economic crises. Global patterns of neo-liberal economic policy shifts and deregulation have created opportunities for private capital investment in public infrastructure. Developing countries are paring down public sector budgets and turning to private sector participation in the provision of infrastructure. While several avenues for international private capital flows have been made accessible to Mexican infrastructure finance since the beginning of economic liberalizations, there are several obstacles that continue to hinder flows. Institutional change and policy reforms that help developing countries access international private capital are suggested.
-- Author's abstract.