In Mexico, public spending on infrastructure-electricity generation, roads, railways, water plants and the like-was a third lower in 2004 than a decade earlier, according to a report by Merrill Lynch, an investment bank. The World Bank describes two-fifths of the country's motorways as 'pre-modern'. Nevertheless, the government has found the money to spend 0.7 percent of GDP on subsidizing the electricity that is consumed-which does nothing for the poorest, who live in the dark in rural areas." ("Slow! Government obstacles ahead," The Economist, Jun. 15, 2006.) the situation described represents a misallocation of resources that will inhibit economic growth in Mexico. What ingredients are missing from the "recipe" for growth in this case?