One can grant the fact of Mexico's economic and political woes, but CATO still misses badly.
It's a demand side problem.... If Americans weren't paying people to cross the border illegally, the illegals wouldn't be nearly so willing to cross the border in the first place.
There are a lot of reasons for demand on the American side of the equation -- the intrinsically higher cost of hiring Americans being one biggie; and the availability to Americans of welfare as a substitute for low-wage work being another. And so American employers are often willing to overlook immigration status in exchange for the monetary savings (which, in some cases, is all that keeps them from going out of business altogether).
And then you have the American politicians who hold out government assistance to illegals ... again, the illegals are just taking advantage of something Americans are willing to give them. Solve the giveaway problem on the US side, and the illegals have less incentive to come over.
CATO also misses the train when they discuss Mexico's motives for the "labor dumping." It's not so much that they can't "create jobs," (though it's true that they can't). More importantly, the Mexican authorities recognize that promoting immigration to the US acts as a safety valve for them. The large number of Mexicans who leave for the US are not going to cause political unrest and/or revolution back home. One unintended consequence of shutting the border might well be the deterioration of Mexico's political situation -- which could result in refugees taking the place of illegal immigrants....
Second, illegal immigrants send a LOT of hard money back home, which again provides political advantantages for the PRI.
Does Mexico need serious reform? Most certainly. Will reform solve the illegal immigration problem? Partially, but probably not entirely, and certainly not soon.
Overall, CATO's rather disappointing and one-dimensional discussion of the situation offers very little useful information.
I've watched the CATO institute for a long time. In some issues they are useful in taking on the control obsession of the federal government (politicians), and I'm always hoping they would come through with more thoughtful analyses. But they consistently miss the issue. It is like they are SO libertarian, and so reactonarily shotgun, that they totally disregard the essence of responsibility, of individuals, organizations, and in this case, nations (i.e. Mexico).
It seems The Washington DC "think tanks", the Brookings Institution, the CFR, CATO, have become so effete, pandering, and arrogant, they never come close. They are like clones of the United States Senate, or the converse.
A welfare state cannot co-exist with mass immigration. It's something that Europe discovered long ago