To Construct Institutions

Luis Rubio


Perhaps there is no greater evil, or one more despised by the Mexican society, than that of impunity. Impunity, the twin sister of corruption, is not the product of our culture or customs: it is the direct daughter of the way that Mexicans have chosen to organize themselves. The problem, as in other similar societies, is that one ends up believing that it’s something natural. In a recent article on Russia, Misha Friedman, a NYT photographer, affirmed that “corruption in Russia is so pervasive that the whole society accepts the unacceptable as normal, as the only way of survival, as the way that things ‘just are’”. Mexico is not so distinct.

And with good reason: observation of the daily panorama shows that impunity reigns above all. The examples are vast and very diverse. There’s a candidate who has run in four elections in his lifetime, but who has only accepted the results in one of these, the one he won. In the remaining three, he didn’t lose: the victory was stolen from him. We witness a farce between a communications enterprise and the government in which the only thing that’s clear is that nothing is transparent in the management of spectrum concessions and, worse yet, that all of those involved in the business (politician and media mega companies) appear to like the system. There are thousands of deaths, “disappeared” journalists, citizens who have been abducted but only a handful of judicial investigations. And all that seems normal to us.

Corruption is no more than a mechanism that allows the functioning of a society within a context of impunity. In the face of the impossibility of resolving the problems, the citizen adapts and corruption is a means of achieving this. That’s how daily problems like a traffic fine are solved, or a permit from the authorities or a visit from an inspector. The problem is not the corruption itself but the impunity that makes it possible and, from another angle, inevitable. And impunity is the product of our institutional weakness.

One of the myriad myths of the old political system is the supposed strength of the country’s institutions. Our image of institutions is that of great monuments and edifices or the way that politicians were disciplined before the presidential authority. However, the relevance of institutions resides in the rules of the game that they entail. An institution, noted Nobel Prize winner Douglas North, are the rules of the game in a society or, more formally, are the humanly devised constraints that shape human interaction. The more these rules are clear and defined, the greater the institutional strength and the lesser the potential for arbitrariness of the authority, thus the greater the impunity.

Echeverría’s foreign investment law was a monument to discretionary actions and a perfect example of the source of corruption in our country. The law established a set of precise rules on limits for foreign investment, national and foreigner shareholder rights, and differences among sectors of the economy. Although the law was highly restrictive, one of its articles conferred upon the authority full discretionary powers to act distinctly from what was disposed by the law in cases in which it considered it necessary. That is, the law established very rigid rules but subsequently a space of absolute impunity was generated. This same principle exists in all of our legislation and comprises what generates permanent uncertainty, in addition to spaces for impunity. When the authority possesses faculties so vast that it is legally immune to punishment, corruption becomes a natural survival mechanism.

Three examples illustrate the costs and the opportunities available towards the future. Some years ago I had the opportunity of attending an apparently normal process. A lawyer friend of mine accepted the case of some brothers who wanted him to help them separate the businesses that they had inherited. The legal and the business part followed its own dynamic, but what stood out for me was that the most complex and extensive part of the process was the way in which the clients would pay him for his services. Under normal conditions, the lawyer would have sent them an invoice for his work and they would pay. Period. However, the concern was that after arduous work involving multiple expenses, the clients would end not paying him, hence the need for a cumbersome arrangement that would guaranty payment. This was the extent of the distrust but, above all, the weakness of the institutions that we have. The difficulty of making someone comply with a contract generates absurd distortions.

This example contrasts with the way that building inspectors act in the US. For example, the rules regarding the number of spaces in a parking lot per foot of construction is clear and specific, not subject to negotiation. The inspector is invested with no faculties other than to establish whether this number of parking spaces exists. Because he does not have the faculty to modify (or “stretch”) the rules at will, his decision is binary: yes or no. It is not by chance that we Mexicans frequently clash with Americans in affairs of great transcendence: our frame of reference is radically different.

Fortunately there are examples that it is possible to diminish or eradicate corruption: when the spaces of arbitrariness and impunity are eliminated, corruption stops being possible or inevitable. That’s what happened at the end of the eighties at the then SECOFI (now the Ministry of the Economy) where a change in the rules modified the entire nature of this ministry devoted to commerce and industry. Historically one of the spaces of greatest governmental corruption, the SECOFI bureaucracy lived from the exploitation of their discretionary faculties in the awarding of investment, import, export, and other similar permits. With the liberalization of the economy (which, essentially, consisted of the substitution of permit requirements with tariffs or rigid rules), the entire industry of corruption at this ministry disappeared. Thousands of bureaucratic paper shufflers (or impeders of papers being shuffled) had no reason to exist and the ministry was reduced to less than 10% of what is had been. In that world corruption simply disappeared. It is noteworthy that many prefer the old system…

The day that Mexicans have clear rules in migratory affairs, electoral issues, radio and television concessions and property rights in general, as well as an authority disposed to and invested with the faculties to make them stick without looking back, the country will be another. The issue is to end the discretional faculties that render arbitrariness and impunity permanent: all the rest is mythology.