Over the weekend, Mexico opted for a pact among government, business and organized labor to fix prices and output levels in order to boost its troubled economy. This came at a time when other Latin American countries are rushing to free up their private sectors.

The so-called "Pacto" would:

• Hold prices for gasoline, diesel fuel and electricity to a 1.2% increase per month - with larger hikes scheduled later.

• Increase the minimum wage by 10% in December and again in April.

• Give tax breaks to businesses to increase private sector hiring.

• Boost outlays for social services and job training.

• At the same time, cut government spending by 4.75%.

Six previous Pactos have failed to increase national output or individual Mexicans' incomes. In fact, GDP has shrunk nearly 6% this year, and inflation is running at a 40% annual rate.