Luis Rubio

Mexico’s main economic problem, says the PAN President, is   its political system because it has impeded it from making the decisions and undertaking the reforms that the country requires. No one who has observed the way Mexico functions would object this appreciation that, not by chance, coincides with the disposition of the three political parties to come together in what is known as the Pact for Mexico, brokered by President Peña upon his inauguration in 2012. The Pact permitted many necessary changes, but the country’s real problem lies elsewhere, in the reality of the power.

The great question is whether the problem resides in that the existing procedures do not serve for the processing of decisions or conflicts (thus the Pact), or in that the existing institutions do not work because they are extremely weak and vulnerable. This dilemma is at the heart of the country’s apparent incapacity to construct long-term projects, to attract investments in projects and sectors entailing trans-six-year presidential terms, and that confer certainty on the population with regard to the functioning of the system of government, all of which are critical in view of the potential energy liberalization. The problem is one of recent decades because in the remote past the country was very distinct: closed, small population, little information and a self-contained economic structure.

Not by chance is Mexico confronting challenges in ambits as distinct as security, the composition of the regulatory organs (competition, telecommunications, transparency, energy, elections) and the secondary legislation regarding the constitutional reforms undertaken this past year. It’s not that things have gotten worse but that they haven’t been attended to in a consistent manner. Each of the reforms undertaken has its own merit and purpose, but each can only prosper to the extent that the reforms satisfy two generic criteria: one, that they guarantee trans-presidency continuity; and two, that they truly “attack” the heart of the problems in the respective sector or activity.  Neither of the two is evident.

The problem of continuity derives from the concentration of power: the concentration is so thoroughgoing and the capacity of the governor so great for modifying the correlation of forces that the natural inclination of every incoming president leads to ignoring what exists and to constructing something totally new. Some governments decentralize, other centralize; one administration proposes a determined police model, the next one reinvents it. The point is that there is no continuity, a factor at the core of the country’s institutional weakness.

In plain terms, the degree to which a government can modify the content of the institutions at will is the extent to which the institution is incapable of fulfilling its mandate. Perhaps there is no better test of the latter than the fact that the members of the commissions charged with key processes such as elections, transparency and regulation (competition and telecommunications) are changed periodically but not when it’s their turn: these changes have the effect of sapping the institutions because they evidence the nonexistence of real autonomy. Insofar as neither the society nor the members of these entities are certain of their permanence, they will act with incredulity or with rejection, corruption or accommodation.

Over the past few months an enormous number of entities were created with supposed constitutional autonomy, a term that still remains to be accurately defined. I understand that the objective of those advancing this notion responded to the urgency of strengthening the State’s capacity, distinct from that of the government, in such important and sensitive areas. The question is what will be sufficiently distinct on this occasion to justify the certainty to which the reformers aspire. In other words, how are they going to guarantee the permanence of the trustees (or their equivalent) and ensure the independence of their decisions? It’s not a simple issue to resolve given the propensity to modify the institutions and their boards, including the lack of respect toward these, both the product of the reality of power.

At the heart of this problem lies the plain and simple fact that things happen, in this case the capacity to modify alleged autonomous institutions, because those bringing about the modification have the power to do so. No two ways about it.

In general terms, in countries in which “the leap was taken” toward institutionalization comprised a product of the vision of one person (or of a small cadre) who recognized the cost of the absence of solid institutions, prone to granting permanence and reliability to their own projects. That is, the move towards institutionalization was due as much to convenience as to conviction. Case after case, from the Ottoman Empire to the end of the last Chinese dynasty and passing through numberless examples (such as Korea, Taiwan and Chile) and, in recent decades, some Eastern European nations, institutionalization has been a product of the vision and willingness of the governor to utilize his vast power in order to delimit it. Institutionalization does not occur because it is decreed in the Constitution but rather when the governor himself accepts that the future requires putting a rein on his own power in order to submit it to processes not depending on a sole individual. When that happens, the country segues to another level of civilization.

Mexico’s great challenge does not lie in the definition of procedures (although that’s indispensable), but in the decision of the government to constrain its own power for the sake of endowing its project with permanence and, as a result, laying the foundations for a sustained development. That’s impossible with the status quo.

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Luis Rubio

Groucho Marx, the great satirical actor, argued that “politics is the art of looking for trouble, finding it everywhere, diagnosing it and incorrectly applying the wrong remedies.” Governments are particularly good at identifying technical problems but they tend to be profoundly ignorant about what motivates people to act the way they do. They assume that people will respond to governmental commands and preferences without question and without ever doubting bureaucratic altruism.
But Mexicans have spent centuries watching governments come and go and their response has not changed one bit: “obey but do not comply” was the way Mexicans defended themselves from their Spanish masters during colonial times. They simply adapt. Human nature is stubborn but predictable: people never go against their interests nor do they willfully bow before bureaucratic preferences. Maybe it is there where a more logical explanation to the pathetic economic performance of late resides.
I do not have complex mathematical models at my disposal to elucidate the causes of the poor performance of the economy, but I observe how people act and respond to the endless barrage that comes out of the government in the form of standards, rules, procedures and taxes. One comment I heard recently tells me a lot: the use of cash is growing rapidly. A notary-lawyer tells me that in the past few years cash had almost vanished from the transactions he witnessed and gave faith to (largely due to the tax on cash deposits) but that it is now coming back in dramatic fashion. The reason? People are afraid of the new powers of the Treasury to audit their bank accounts and credit cards. Thus, instead of moving towards an increasingly efficient economy and a financial system that intermediates ever more exchanges in the economy among economic agents, Mexican are moving back toward barter. Lower efficiency means less economic activity. If one multiplies thousands or millions of daily exchanges like this across the country, it becomes obvious that the aggregate effect can be brutal.
The rationale of a higher tax rate (approved last December) is that, with a much larger purse like the Treasury’s, the government can spend massively, with impressive results: a huge infrastructure project trumps thousands of small exchanges any day. However, this may be true in Sweden, but in Mexico even the construction industry is shedding jobs and declining. Public spending is rising but the economy is not responding. Surely, months of sustained governmental spending will eventually impact the economic activity, but probably less than the government anticipates and perhaps in different ways. The reason is obvious: government spending is highly inefficient. While people spend in ways that are profitable to them, the government wastes a lot, often absurdly. Furthermore, corruption is not abating and everyone knows examples of it in their daily lives that reinforce their contempt for bureaucratic solutions: rigged bids; abusive unions; vote purchasing in Congress; infamous forced contributions (“moches” i.e. bites) to the members of Congress by beneficiaries of public spending; and extraordinarily generous pension schemes for public servants.
Instead of seeking to earn the trust of the population and moving towards building an increasingly efficient and orderly economy, recent governmental actions are accelerating the growth of the informal economy, whose taxes are privatized: these are charged by inspectors, police officers and political leaders and never reach the Treasury. Instead of simplifying tax compliance and lowering the costs and complexity of creating and operating formal enterprises, the tax strategy increases incentives for the informal economy where, despite everything else, businesses face lower administrative and fiscal costs and operate outside of the government’s radar. The logic of the informal businessperson is impeccable but its overall effect is to reduce the aggregate growth of the economy.
Above all, the daily reality for the average Mexican is still very onerous due to the costs of extortion, the impunity with which the authority acts at all levels of government, and the disorder that is the trait of the government at large. The notion that people are going to become orderly without the government doing the same contradicts human nature. Example begins at home.
The current tax law dramatically increases the fiscal cost both because in Mexico there is no marginal tax (tax is paid at the whole rate in each bracket) and because the new powers of oversight paralyze consumption and investment. In these circumstances, it isn’t difficult to explain the economic situation. The problem is not technical but of human nature. In the seventies two administrations endeavored to impose their bureaucratic logic on daily life: they invented trusts funds and increased government spending as if there were no limits and ended subverting the trust of the people. The result was financial crises, inflation and chaos. People did not respond (or responds today) as the bureaucracy expected.
At the heart of it all lies the inexorable contradiction between the experience of the people and the willfulness of the government. In the foreword to the book entitled “Arms Trafficking in Mexico”, by Magda Coss Nogueda, Leonardo Curzio tells the story of a discussion between Rivera and Siqueiros in front of Pablo Neruda, the famous Chilean poet and Nobel laureate, where both Mexican muralists drew their guns to try to impose their views. That seems to be the logic of the new economic strategy: to impose instead of convincing, authority rather than leadership. Imposition does not work in the era of globalization where investors have the world to choose from. The country requires order but also attention to the little big things, such as security and stability. People entrench themselves and, in their ancestral logic, pretend that they comply. The inevitable result is reduced economic activity, regardless of how much the government spends. Where does the fault lie? Quite obviously, it lies in the people and the businesses that do not heed the government’s instructions.

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Forbes – May 2014

 Ari Shavit, a shrewd Israeli journalist, notes that “the West Wing of Barack Obama’s White House is different than any other West Wing before it. It’s full of young people and women, blacks, Hispanics and gays. There’s hardly a white middle-aged man to be seen, almost no people who personify the old political structure. Two women conversing in sign language tell the whole story —this administration is one of minorities and liberals committed to equality, freedom and social justice. The power is a gentle one, of a government reluctant to govern. The new America, which came here five years ago, has become the first America”. Shavit’s argument is that, from that strategic position, everything that seemed to outside observers obvious and natural before no longer exists and that which they find obvious appears to the insiders like the era of the dinosaur.

It is within that context that one must understand the rationality of the Obama White House in the face of critical situations, some of enormous transcendence for Mexico, such as the crisis in Crimea, free trade negotiations in the Pacific and in the Atlantic or the altercations between the executive and the legislative branches in budget matters and debt. In each and every case, the assumptions that used to prevail among the relevant actors and that would transcend the party dwelling in that proverbial house have stopped being valid. Obama is a different kind of president.

Two years ago I wrote an article that I entitled, in an absolutely provocative spirit, “Obama and Echeverría”. My argument was that, like our beloved ex-President, Obama was altering the established order of his country. Today I have no doubt but that this has been his spirit but due less to his skin color than to his ideological stance. Everything indicates that in his development the lessons from his mother (rather than his father as his book’s title suggests), a radical leftist, his life in Indonesia and his evolution as a constitutional law professor and social activist were much more important. Each of those facets, as occurs in each of us, gave rise to his ideas and positions. Perhaps what is most notable about his view, which is in contrast with that of his predecessors in the U.S. government, is that he views his nation’s military might with disdain and believes that it is possible to settle any conflict through discourse.

Nothing bad about those characteristics, except that they haven’t had the desired effect. The U.S. hasn’t had a budget in five years, the economic stimulus program was inadequate in good measure because of the way decided upon to spend it (jurisdiction was ceded to Congress, which employed it with a relatively small multiplier effect), its vacillating over Syria, Libya, and Iran to only later not act according to its own design (the famous “red line”). The case of Crimea may well have been inevitable due to the strategic logic of Putin’s Russia, but the fact is indicative of the perception of weakness about Obama that there is in the rest of the world.

Some days ago, U.S. ex-Secretary of State James Baker stated with respect to Crimea that it perhaps would have been impossible to stop the Russians, but that the response should have been much more drastic and immediate: to authorize the twenty-something liquefied natural gas projects that have been brought to a halt by Obama. Baker’s point was that the mere authorization would have unleashed the financial markets, immediately shrinking the value of Russian oil assets. The two responses –that of Obama and that proposed by Baker- are desk top positions that do not entail any military mobilization, but the latter distills a profound strategic vision, by a professional, while the cancellation of a few visas and other similar provisions have no bite to them and irradiate tepidity, the telling sign of  an amateur.

Conceivably the best analysis of the crisis in Crimea was written by Anne Applebaum: “Openly or subconsciously, since 1991, Western leaders have acted on the assumption that Russia is a flawed Western country. Perhaps during the Soviet years it had become different, even deformed. But sooner or later the land of Tolstoy and Dostoevsky, the home of classical ballet, would join what Mikhail Gorbachev, the last Soviet leader, would so movingly call ‘our common European home.’ For the first time, many are beginning to understand that the narrative is wrong: Russia is not a flawed Western power: Russia is an anti-Western power with a different, darker version of global politics.”    Obama has no idea of how to respond to that and his loss of leadership, clout and popularity reflect it. But, in the interests of maintaining a sense of balance, in contrast with Echeverría, his capacity of harming the interests of his country is infinitely less: in the U.S. there is no crisis such as those that in Mexico broke out without warning. For that there are in Washington counterweights that work with immense effectiveness, even if not always pretty.

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Luis Rubio

There are occasions on which the youth of our political system makes itself more than evident, and I refer not to the age of Mexico’s incipient democracy but to its adolescence, if not its childishness, with respect to the criteria and behaviors that feed it. Mayoriteo (the passing of a bill by the simple majority of one party), consensus and democracy inside the political parties are three of those myths that do nothing other than show how much more Mexico must yet advance. The show that the PAN put up recently in its election for the presidency of the party should lead us to tears because of how pathetic Mexico’s moment is in terms of civilization. What will be the consequences of that immaturity?

The demand for consensus with respect to the approval of legislation in Congress comprises the most pathetic part of this childishness. A self-respecting democracy would not require more than one vote above the rest to pass a law. In Mexico, however, politicians, parties and commentators demand unanimity. The syndrome is so deeply entrenched that the government is willing to squander millions of pesos on the approval of laws that wouldn’t have required more than the vote of their own contingents and acolytes. As the saying goes, fear is swift to strike.

Mayoriteo, what PRI was historically criticized of doing (passing legislation on its own and regardless of what other political parties wanted) is one of those burdens that from decades past have now served to set a trap for the PRI. Demanding unanimity or consensus, opposition parties and many critics have achieved intimidating the PRI and the government to the point of turning a majority vote into a cause for scandal. What would in democracies be considered natural and logical –the one with the majority governs- in Mexico is a cause for embarrassment. The laws emanating from consensus dilute their content so much as to become irrelevant. My impression is that the “consensus” that the PRD would contribute toward the approval of legislation in energy matters would consecrate Lampedusa and his leopard: it will change everything so that all remains the same.

I don’t know to whom it occurred that political parties are democratic only when they elect their candidates and leaders democratically. International evidence for this is, in the best of cases, scant. But within Mexico’s context –a budding democracy and one far from being consolidated- partisan democracy has been a disaster. Each party that’s tried it has ended up worn out and a loser. When the PRI attempted it -2000 and 2006- it ended up in the opposition; when in that party a candidate (Peña-Nieto) constructed an overwhelming coalition without any primary elections, he ended up in the presidency: 2012. The opposite has come to pass in the PAN: the internal contest for the nomination in 2012 did nothing other than divide the party, provide ammunition for its opponents and lead it to defeat. In their book Democracy Within Parties, Reuven Hazan and Gideon Rahat argue that the way parties chose their candidates determines to a good degree their potential for success. Independently of the clamor from the gallery, it is evident that intraparty democracy is not a recipe for success in today’s Mexico.

The race for the PAN presidency was so pathetic that the sole aspect that was important was never discussed: what it was that made their two presidents mediocre and what they should do to recover the power. Instead of that, the contest revolved around the relationship between the PAN and the government. The Calderonists (supporting one of the contenders) have been unable to emerge from their self-absorption: I have not the least doubt but that this contest was resolved at the precise moment that Margarita Zavala (Calderon’s wife and potential candidate for the presidency in 2018) publically endorsed Cordero. Calderón, his family and candidate have not realized that no one in Mexico appreciates, at least at this time, his government as comprising a factor of concord or success. Publically embracing his candidate was the kiss of death.

Years of observing and acting according to the parameters of a democracy under construction have convinced me that we have very little raw material with which to work. The electoral law at the gates speaks for itself: none of those responsible –parties, legislators or government- is working around the development of strong institutions and of a functional government. If that’s not the objective of a politico-electoral reform (clearly Mexico’s foremost weaknesses in the political arena), then our beloved elected officials and representatives should devote themselves to something else. Mexican democracy does not have to be a perfect one, but what is indispensable is a government that works, making possible the growth of the economy and the security of the population. The electoral reform doesn’t deal with any of that.

A year and a half into its six year term, the great affair of the administration has been how to revert the tendency to anarchy toward which the country has gradually been leaning since the seventies. Some governments attempted to take the bull by the horns and instead were gored, as in the case of Calderón. Others, such as Fox, opted for avoiding the issue, leaving the country infinitely more complex and violent when his mandate was over. The present government proposed reconstituting the government as a formula for successfully confronting organized crime but the only thing it’s achieved so far is “democratizing” the latter, that is, extending violence and crime throughout the country, making possible its affecting a progressively larger population in the form of extortion and abduction.

Today Mexicans face three options: anarchy, authoritarianism or modern institutions. If nothing is done, we can rest assured that anarchy will continue to advance. I have no doubt but that there are many in the political ranks who believe that only an authoritarian reconstruction could restore order. That route might perhaps restore order, but would achieve neither growth nor stability and that’s where its error lies and, in part, the current stalemate in the Congress. Stability and growth can only be achieved with strong and independent institutions. Until this occurs, Mexicans will carry on with the myths.

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Luis Rubio

There’s something Platonic in the current domestic debate: the constitutional reforms are like Plato’s shadows, the secondary ones are the reality. The first described the dreams; the second encountered the world of interests of the most diverse sort. The big question is why the process got stuck.

The easy part is identifying “the bad guys” and there’s no lack of proposals. The newspapers are full of explanations of what is or what has been the factor that got things stuck. For some the problem lies in the contradictions inside the opposition parties: whether it be their internal election processes or the real divisions that characterize them. Although much of this is true, they fail to explain why the government does not proceed to directly approve the proposals with their hanger-on parties.

Another line of interpretation blames the perennially favorite villains: the greedy companies that don’t want to relinquish their privileges or monopolies. Here it’s also clear that no entrenched power of any type (union, business, political) is going to cede their perks without a fight. However, there’s a contradiction between this explanation and the former one. It’s possible that both –intraparty discord and the might of private interests- have come together to produce the paralysis that characterizes the moment, but it’s obvious that contradictions are equally present in the governing party, the PRI. Thus, this line of argumentation also does not explain how it’s possible that the enormous drive that characterized legislative activity in 2013 has suddenly deflated. Something else must be holding up the process.

The core problem resides in the dislocations that the reforms promise. For starters, there’s no reform without dislocation: reforming entails change, affectation, correction. If a reform doesn’t alter the established order, it ends up being irrelevant. The objective must be that of constructing a new order and not merely dislocating the existing one: and the problem of the reforms –above all, but not exclusively, the secondary reforms-, is that they are designed merely to dislocate. Their rationale is political to a greater extent than economic or organizational.

The reforms of 2013 enjoyed support among the population. Part of this derived from the impact produced by the very fact that “at long last” the legislative machinery was in motion, but much had to do with the implicit promise of constructing a new environment. In order for a reform to have viability a support base is required that sustains the reformist government and makes it possible to neutralize the opposition of those who could be losers. Although ethereal and never expressly articulated, that support base contributed to achieving the success of the first stage of the reform, above all in the two reforms that really are truly susceptible of improving the life of the populace: the energy reform and that of communications. However, that support base was not the product of an intentional construction but rather of the generalized fedupedness of the society with the government and the politicians.

As in Andersen’s tale of the emperor’s new clothes, the secondary reforms have laid the governmental proposal bare: they made it evident that there was no transformative project but merely one of control. There are various indicators that reveal the nature of the project: they may be observed in the law of competition, in the differences in the way it would affect those now referred to as preponderant, the candor with which control of the Internet was attempted. Above all, what stripped the reformer project of its halo was the lack of a promising future. Nobody’s going to support a project in which the entire population loses. Assuming the opposite would be ludicrous.

In the final analysis, the shadows ended up dominating the promises, creating a scenario prone to maintaining the status quo. The constitutional reforms painted a panorama of possibilities, the secondary reforms promised a world of restrictions, everything under the control of the government.  No one should be surprised by the current situation.

The manifestation of all this is the new national political setting: a space in which dispute holds the upper hand over construction. Although the opposition parties could, perhaps at another moment in their history, articulate a grandiose proposal of transformation, construction depends on him whose responsibility it is to govern. The problem is that the government entertains a profound contradiction between its public face and its private objectives: the former promises a transformation, the latter have been exposed and are everything but transformative.

The great merit of President Peña’s government to date has been in his shrewdness and skill in taking advantage of the moment and of all of the instruments within his reach to achieve the first thrust toward the country’s transformation. His great lack has resided in the narrowness of the ulterior motive that inspires his project. Control is not, cannot be, a governmental objective. Control could be a means to achieving relevant objectives, but is not a substitute for an integral proposal of development. Likewise, reforms are means through which the attainment of a transformative objective can be advanced, but are not substitutes for the project itself. The project is lacking.

The good news is that the reforms approved in 2013 open up enormous opportunities for the development of the country; the bad news is that there’s no evidence of the existence of a vision capable of making these possible in the present reality.

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                                                                                                             Luis Rubio

The notion of reforming acquired singular –in fact monumental- relevance in recent decades to a good degree because the first stage of structural modifications, at the end of the eighties and beginning of the nineties, was cut short. Ever since then, the mantra was that a set of reforms was lacking and that as soon as these were consummated, the country would enter into, at that precise moment of course, Nirvana. Now that the reformist dynamic has picked up speed, it’s a good time to reflect upon what it means to reform and the risks and opportunities that the country is facing.

The country has been stagnating for nearly a half century and, save for small instants of light, and circumstances that led to these, it has not found its way to development. The policy of “Stabilizing Development” died in the sixties because it didn’t have the gas to keep it going: the schema worked while the country exported sufficient grains and minerals to finance the importing of machinery and inputs for a closed and protected industry; when grain exports declined (the consequence of a failed agrarian policy), the whole model collapsed. The governments of the so-called “Tragic Dozen” (1970 to 1982) tried everything available to sustain that model and their sole legacy was a country in crisis, an enormous foreign debt and a society at odds with itself and with its government. It is not obvious to me why anyone would wish to return to that paradisiacal moment.

By the eighties Mexico was one decade behind: in that lapse fundamental economic and political changes were undergone in the world (economic ones in Asia, political ones in the South of Europe) from which Mexicans were distant, as if nothing could affect them. At the mid-eighties, the country finally started to take the bull by the horns: the era of the reforms begins and some sectors experienced the urgency to transform themselves and to breathe the breath of fresh air that this inevitably produces. The great merit of Salinas was that he changed the reigning vision: instead of looking back, he forced Mexicans to look forward: instead of looking inward, he obliged the country to focus on looking outward. It may seem minor, but his great legacy was strategic vision. There was none of that in the years before his term and it’s still absent today.

“Experience teaches that the most hazardous moment for a bad government is when it is just beginning to reform. Only a great genius can save a ruler who is setting out to relieve his subjects’ suffering after a long period of oppression”. Although this refers to pre-revolutionary France, it would appear that de Tocqueville paid a recent visit to Mexico. His argument is very clear: “As the prosperity in France developed as I have just described, men’s minds appeared meanwhile more anxious and unsettled. Public disquiet sharpened; the loathing of all ancient institutions was on the increase. The nation was obviously marching towards a revolution”.

Reforming implies altering the established order because it entails the affectation of interests and exacts adaptation to new realities. In this sense, each and every reform represents a challenge for enterprises, institutions, and government. Those who lose revolt and attempt to hold onto the past or to deploy landmines along the road to change; pitchmen seek the opportunity to lay hold of clienteles and head up a march, to wherever, usually the past. Political administration becomes crucial but generally does not fathom that demand and it is within that context that crises arise.

The 1994–1995 crisis was due to a financial strategy of fiscal deficit and debt but also to the shock that the reforms produced, including the loss of the PRI’s most basic asset: authoritarian and centralized control. The chaos of 1994 –assassinations, rebellions, devaluation- heralded a restructuring of the society’s power relationships that, through and through, has not been solved to date. Perhaps this might not be the magnitude of the gale-force winds that led to the French Revolution, but the results in Mexico have been pathetic.

Twenty years later we still have not finished abandoning the past and there’s no vision of the future. Last year’s reforms are important but what happens is going to depend to a much greater extent on the quality of the leadership and the vision with which the population is convinced of its importance than on its immediate contents. In a country whose institutions possess neither prestige nor capacity, the letter of the law is always relative.

At the same time, it is not possible to minimize the risks that the process itself generates. The complexity of the interests and potentials affected that lurk behind the holdups in matters of secondary laws cannot be underestimated. In his comparative analysis of the diverse reform processes, Samuel Huntington concluded that there is a severe risk of causing the fusion of the opposition parties in diverse reforms. “Instead of attempting to solve all these problems simultaneously… (they need to be) separated one from the other, win acquiescence or even support for one reform from those who would have opposed… other reforms… Economic growth, in short, required cultural modernization; cultural modernization requited effective authority; effective authority had to be rooted…”.

The reforms of the past era made headway within an authoritarian context that no longer exists, no matter how great the concentration of power. The great challenge is to construct forward or run the risk of encountering an explosive backdraft against it. Or, worse, another lost opportunity.

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a quick-translation of this article can be found at www.cidac.org

Luis Rubio

Kenneth Waltz, the recently deceased and most prestigious scholar of the realist school of international relations, wrote that “the opposite of anarchy is not stability but hierarchy”. Anarchy is reached when hegemony does not exist or when there are no structures of order and control (or when these are lost) in a society. This occurs when the established order is broken (as when an empire or a dictatorship collapses), when there are no institutions capable of channeling conflict or when anomalous situations –whether endogenous or exogenous- present themselves that generate conditions of disorder, violence and, potentially, chaos. There are many examples of each of these cases, from the Soviet Union to Egypt. Mexico did not attain the level of chaos that has characterized other nations, but tendencies from the onset of the nineties have not been commendable: anyone could find examples of each of the previously described grounds.

An early accomplishment of the Enrique Peña´s government was the return to a sense of order and authority; this, however, has been tarnished due to the renewed chaos that characterizes several regions and states of the country as well as by demonstrations and street violence. Although it is quite obvious that the trends in the country’s power structure have changed, the government has certainly not achieved instituting its hegemony in the sense employed by Waltz. What remains to be seen is which of the two trends advances: chaos or hegemony and, if the latter whether institutional mechanisms will be created for the latter to be permanent.

The return of a sense of order and authority did not modify the growing industry of extortion and kidnapping, nor did it impact the patterns of violence along the drug corridors. It’s sufficient to see the displays of rejection (and, in some cases, of outright rebellion) in Guerrero, Oaxaca or Mexico City, the violence linked with organized crime or the non-institutional dissidence that exists throughout the country (like Michoacán today) to be chary concerning the conclusions at which one arrives. But none of this denies the advance toward reestablishing a sense of authority. It is not obvious, though, that it will endure.

I’d like to open a parenthesis here to dwell on the perspective of “realist” school of power, such as Waltz. For this “tribe” what’s fundamental among nations (but also within them) is to achieve an equilibrium that allows for stability. From this perspective, the worst case scenario is one that leads to instability; thus, for those arguing for a “realist” (as differentiated from “idealist”) view what’s crucial is to void sweeping changes: to procure equilibria and comfort zones. In this respect, there are scholars who have compared the history of Asia with that of Europe and concluded that the reason for fewer wars and more stability in the former is that in Asia there always were hegemonic or dominant powers (like China), while in Europe power relations were more akin to equality. From this, these savants deduce that chaos is the result of equality among nations or among societal groups. When there is a dominant or hegemonic power there tends to be order, ergo, development.

Democracy is a sort of hegemony that, different from that resulting from the capacity of imposition is the result of a vote, thus, of agreement in a society. But, as with other structures of domination, democracy is a hierarchical structure that imposes by means of institutions that enjoy legitimacy deriving from the consent of the population. However, an incomplete or a non-consolidated democracy one like Mexico’s generated an expectation of equality (on the part of the governors, de facto powers, businesspeople and union leaders) that contributed to creating an environment of crisis and instability. That is, on the disappearance of the structure or source of authority the country began to enter into an era of disorder that has threatened to self-destruct in systematic fashion.

The point is not to suggest that what the country requires is a structure of authoritarian control that imposes order but rather the complete opposite: what is required is for the country to consolidate its democracy for there to be strong institutions that not only drive the possibility of the existence of legitimate authority, but also for the latter to be permanent through electoral processes that confer legitimacy upon it every six years. With an eye to the future, this is, in good measure, the challenge that the country faces today.

The previous government attempted to avoid the anarchy to which organized crime was potentially leading through frontal combat. Independently of this strategy’s rationality or viability, one of the basic problems of its conception was the supposition that all sources of stability issued from it. Although organized crime is obviously an enormous source of violence and disorder, a good part of the country’s problems derive from the fact that from the beginning of the nineties there commenced an erosion of the structure of authority. The old presidentialism was wearing thin but institutions were not constructed (or not sufficient and adequate ones) to replace the outmoded powers that were going downhill.

In a democratic system, hegemony stems from a centralized government that controls the structures of power or those of strong institutions. Currently, the government has amassed growing power thanks to the mechanisms of control it has introduced and revitalized, as well as due to the president’s personality. This constitutes the best potential opportunity for advancement toward development in decades, but also entails the seeds of its own risk.

In the nineties Mexicans had a presidency that achieved something similar: it consolidated the power, erected a structure of domination that led to hegemony and drove the aggregate of measures that established a platform for the country’s economic development. In much of what was achieved then lies the potential for present-day development and of what has worked well in recent decades, beginning with the North American Free Trade Agreement (NAFTA). However, it is also imperative to recognize that unipersonal power is not permanent and can in itself be a source of instability and even disorder, as has been the case sins 1994.

The reestablishment of order and of a sense of authority is an extraordinary accomplishment and constitutes an exceptional opportunity for the development of Mexico. But it will only succeed to the extent that it consolidates into institutions and caters to the needs of the citizenry, always ignored.

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 By Maria F. Mata & Luis Rubio  // Thursday, May 1, 2014

Luis Rubio

The contrast between the discourse of the politicians and the reality in the streets  wields a great impact. As if it were about two contradictory worlds, which mutually ignore each other. There’s a lot of that in Mexico and in the provincialism of its politics, but I’m not referring to Mexico or not exclusively to Mexico. The great revelation of the film The Square is that today no one has a monopoly on information. The pertinent question for Mexicans is whether the recent reforms are on the same page with that change in the reality.

The film, a documentary on the student rebellion in Tahrir Plaza, is a profile of six activists from the beginning of the demonstrations until the Army’s retrieval of the power after overthrowing Egypt’s elected President. It is a powerful testimony to a spontaneous social mobilization although perhaps incited by years of contention and political repression. But the most transcendental message of the film does not lie in the demonstrations themselves but rather in the narrative of the mobilization.

When it began and the so-called “Arab Spring” took wing, many observers noted that the electronic media, the social networks and other instruments of the globalization era had made this phenomenon possible. Some historians, less passionate, demonstrated how European XIX-century revolutions had followed a similar pattern: the example had taken longer to spread, but had had the same impact. In other words, technology has precipitated the times but has not changed the dynamic. What technology did achieve was dissolving the monopoly on truth.

As one of the lead characters in the film says, formerly history was written by the winners, now each tells his/her own. The politicians are no longer the possessors of the truth and their affirmations are immediately questioned, frequently with relevant data and relentless information. Now the traditional media compete with bloggers and, in fact, with anybody with a cell phone cum camera in his/her pocket. No longer is there a sole truth or a sole perspective. The political implications of this fact are extraordinary.

To start with, no one controls the events and the capacity to manipulate diminishes drastically. It’s not inconceivable that, having occurred one or two decades previously, the attempt at impeachment of Lopez Obrador (2005) would have been successful, but today it would be impossible because no one controls all the processes, including the government.

As Aníbal Romero says, politics is not defined in the plane of good intentions but in that of results “and events often take a distinct and even contradictory tack with regard to what was intended”. This is dramatically magnified with the multiplicity of contradictory sources of information and the heightening of expectations, all of which fundamentally alters governmental activity.

The world of yesteryear was a paradise of controlling politicians and the population had few resources within their reach. Kings and feudal seigneurs (whatever their title) dominated thanks to their capacity to control basic goods. While there were exceptions, that capacity of control and manipulation remained unaltered until just a few lustra ago. Today, as David Konzevik remarks, expectations swell 5% for each 1% of a rise in income, that is, they grow exponentially and it’s not necessary for any person to more than watch TV to know what she wants and that she wants it now. Governing within this context exacts a very different way of understanding the world and of acting.

In the Mexico of the many reforms, the question is whether these are synchronous with today’s reality. On occasion, it seems to me that instead of attempting to position the country ahead of the curve, what’s really being done is legalizing or codifying the industrial revolution at the emergence of the XIX century.

There are various things that appear very clear: first, it is no longer possible to hoodwink the citizenry or trade gold for shiny beads; second, the population is light years ahead of the politicians with respect to their desires and expectations and there’s no way to satisfy these and certainly not with the instruments available at present; and third, given that the government cannot control information flows or expectations (and it would be ridiculous for it to try to do so), its function should be to concentrate on providing people with the instruments and capacities to be successful in their own right.

The following list does not feign to be exhaustive, but its implications in the terrain of reforms is evident: these must concentrate on unleashing the productive capacity of the population (labor reform); give the people tools for them to be able to avail themselves of these in such a complex and complex world (education, health); furnish them with access to information (telecommunications); and create conditions so that their rights are protected (political-electoral and security). The key is their focus: what are they meant to accomplish?

I’m left with two doubts: first, although the potential energy resources are evidently enormous and merit intense, rational and successful exploitation, why concentrate on that, the XIX century, instead of the XXI? Another doubt: To what degree do the reforms that have been approved, and whose implementing legislation is in process, adhere to the logic of advancing what is crucial for the future?

In one of his films, Cantinflas said that what’s most interesting in life is to be simultaneous and successive, at the same time. That’s how the government should be thinking, but its concentration seems to be on other things.

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FORBES – Luis Rubio

Companies employ diverse macroeconomic or sectorial indicators for decision making about investments, production lines, and business opportunities. Over the last years, the “World Justice Program*” (WJP) has been devoted to formulating indicators for another type of measurement: the degree of the Rule of Law that characterizes a country. Their purpose is to provide for the citizenry, enterprises and governments an analytical gauge that allows for evaluating not only production scenarios of the next few months, but also the general conditions within which the society and the economy function. This is a titanic effort that yields quite interesting results.

The index commences by defining the Rule of Law, something it does in stages. “The rule of law provides the foundation for communities of opportunity and equity – communities that offer sustainable economic development, accountable government, and respect for fundamental rights.” “Effective rule of law helps reduce corruption, improve public health, enhance education, lift people from poverty, and protect them from injustices and dangers large and small.” It is concerned with proposing a set of objectives rather than a precise definition, but it is suggestive of the complexity of the term, so much so that the introduction begins with the affirmation that “the Rule of Law is notoriously difficult to define and measure”.

Instead of attempting a definition, the project proposes a series of conditions that should be present so that the existence of the Rule of Law can be affirmed: 1. The government and its officials and agents as well as individuals and private entities are accountable under the law; 2. The laws are clear, publicized, stable, and just; are applied evenly; and protect fundamental rights, including the security of persons and property; 3. The process by which the laws are enacted, administered, and enforced is accessible, fair, and efficient; 4. Justice is delivered timely by competent, ethical, and independent representatives and neutrals who are of sufficient number, have adequate resources, and reflect the makeup of the communities they serve.

How to measure something so apparently fluid? The way that the WJP resolves the dilemma is with a series of indicators that is later compared at the international level. Its analytical objective is to determine: a) to what degree does the law impose limits on the exercise of power by the government and its agents?, and b) to what extent the state limits the actions of members of society and fulfills its basic duties toward its population so that the public interest is served, people are protected from violence, and members of society have access to mechanisms to settle disputes and redress grievances? As concepts, both are impeccable. However, encoding them so that they can be quantified, thus compared, constitutes a significant challenge.

Despite all the problems that can be found with this, many valid, the index compares 99 countries in terms of eight factors that roughly group one hundred indicators. These factors are: constraints government powers, absence of corruption, open government (transparency), fundamental rights, order and security, regulatory enforcement, civil justice and criminal justice. It will come as no surprise to anyone that the Nordic countries are in dispute for the first places, followed by nations such as New Zealand, the Netherlands, Canada and the majority of Europe. Mexico was in the 79^th place out of 99, behind the majority of Latin American nations and even much worse than several nations of the Middle East and Africa.

This type of measurement always lends itself to controversy because it attempts to measure things that are difficult to evaluate in objective terms. However, beyond the specific number, it is clear that Mexico suffers severely in each of the factors evaluated. In reality, it is not necessary to conduct such a detailed evaluation to be able to conclude that there are problems with control of governmental activity, that administration of justice is poor or that insecurity and corruption are flagrant: it is noteworthy that the sole factor in which Mexico obtains an evaluation significantly superior to the remainder of these is in matters of governmental transparency, a theme to which the country has devoted significant efforts and resources in recent years.

Beyond the details, what this indicator tells us, even confirms for us, is that the country is attempting to get into the big leagues (as illustrated by the pretension of attracting first-world investors to the energy sector) but it lacks the legal and institutional infrastructure required to do so. This reality generates for us a very clear tessitura: Shall we bow out because we don’t have what’s required or shall we take up the challenge and devote ourselves, society and government, to outdistancing and triumphing over it?

*http://worldjusticeproject.org/sites/default/files/files/wjp_rule_of_law_index_2014_report.pdf

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