Summary The recent decline in Mexico’s maquiladora sector provides an opportunity to reassess the sustainability of basing national economic competitiveness on low wages. 1 For a discussion of the some of the causes and consequences of this recent downturn in the sector, see Sargent and Matthews (2002). 1 Focusing on human capital as an important component of equitable growth, the authors argue that models of its development which consider market factors alone are inadequate. Combining their own case study with a review of other studies over the past 20 years, the authors propose a “management-centered” (as opposed to a “market-centered”) model of human capital development as a basis for discussing the relative merits of in-bond industrial programs and considering measures to improve levels of human capital.