Surviving privatization in the era of neo-liberalism: A case study of Mexico's oil company (PEMEX)

•Oil revenues help us understand why state-owned oil companies are not privatized.•Economic nationalism helps us understand the lack of privatization of oil companies.•Labor union strength is critical in explaining state ownership of oil companies.•International actors matter in explaining the lack of privatization of some oil companies.

Mexico's oil company (PEMEX) is a particularly interesting deviant case study in the context of the privatization literature. The literature on the causes of privatization indicates that PEMEX should have been privatized a long time ago since it is suffering from: declining levels of competitiveness, low productivity, and corruption. Economic variables alone do not explain the lack of privatization of the state-owned oil company. Why was the Mexican oil company, PEMEX, not privatized? I maintain that dependence on oil revenues, economic nationalism, labor union strength, and the role of international actors (the International Monetary Fund, and the United States government) explain why Mexico's oil company remains state-owned.