Luis Rubio

Whoever has walked down the streets of a European city knows that sidewalk cafés are the social and community lifeblood. The cafés extend out to and onto the sidewalks, where customers coexist peaceably with passersby, without the least conflict arising between them. The cafés occupy the sidewalks but do not invade them, a perceptible reflection of a society in which there are clear rules that are respected by private actors as well as by the authorities responsible for making the rules be complied with.

While in Mexico there is a proliferation of cafés and restaurants with tables on the sidewalk, the result has been very different. The comparison, and contrast, is revealing.

In societies like Mexico’s, in which little importance is afforded to the rules -any rules-, quotidian coexistence requires alternate mechanisms that facilitate it. In the case of vehicular traffic, for example, the existence of traffic humps and innumerable stop lights is suggestive: due to lack of the knowledge and application of the (frequently changing) rules of the motor vehicle code, the authority resorts to physical barriers to force drivers to behave. In Europe, as in societies in which knowledge of the rules is a condition sine qua non for operating a vehicle, there are many fewer traffic signals and practically no street humps: the authority resorts to traffic circles as mechanisms of interaction among drivers headed simultaneously in distinct directions. Behind having recourse to traffic circles, there is a whole philosophy that also reveals the nature of the authority: it is expected that drivers will know the rules and adhere to them. In traffic circles there is a procedure for entering, circulating and exiting: only those who know the traffic rules can function within that schema -and successfully get through a traffic circle.

The cafés and restaurants of Mexico City’s Condesa neighborhood as in Presidente Masaryk Avenue live in ever-changing rules, always dependent on the whims of the municipal authority, which also changes frequently. That is, there is no permanent code that establishes what can be done and what is prohibited (and compliance with which is equally strict for the individual or businessperson as for the authority). With the dearth of that clear and transparent set of rules and regulations, everything is subject to negotiation that, in such a milieu, implies paying a bribe. When a businessperson arrives at an agreement (that is, meets the inspector’s price), the permit is valid only for the time that the public official maintains his post; thus, the restaurant invades the entire sidewalk in order to exploit every last centimeter of available space (which was paid for under the table, as it were), regardless of its effect on pedestrians. The conduct of the authority as well as that of the restauranteur is absolutely logical and rational: both are exploiting the opportunity created by the “agreement” and both know that it lasts for a limited time only. The arbitrary powers that the rules confer on the municipal authority permit this type of arrangement at whatever cost, starting with the passersby.

This is but one example of the impediments to the growth of investment, therefore of the economy, which transcend the reforms that with such great eagerness the government promoted during its first half in office. These are factors that inhibit investment because these render it costly and, above all, risky. A restauranteur who is unsure of the space that he is going to be able to utilize will think twice before going ahead with his investment. The same is true of a mega enterprise that considers investing in the energy sector or in a plant that manufactures goods for exports. It is not by chance that those who invest the most are those that, thanks to NAFTA, enjoy legal and patrimonial certainty, something from which virtually all Mexicans are excluded.

The late Mancur Olson, an American professor, clarified this phenomenon: he found that when a company or consortium entertains a clearly defined special interest it can obtain very broad benefits compared with those that could be achieved by millions of consumers lacking common objectives. In this manner, a nucleus of companies or labor unions can achieve customs or regulatory protection that negatively affects the consumer in general because it possesses the capacity to exert direct and effective pressure. Hence, they can come to an agreement with the authority of the Secretary of the Economy that, on benefiting those enterprises, jeopardizes not only the population in general, but also makes investment generally risky. Who would want to invest in an environment in which the rules are established in willful (that is, corrupt) fashion by the authority? This instance is extensive to sectors such as communications, agriculture, cattle raising, and others. When we ask ourselves why the Mexican economy does not grow, the answer should be obvious.

Mexico’s governmental system was constructed under the principle that the authority should be endowed with great latitude in deciding where and how the country would develop. Perhaps that made sense and worked one hundred years ago, after the revolutionary devastation and within the context of a closed and protected economy. Those very powers persist today but the reality is the opposite: in open and competitive surroundings, what previously was (conceivably) virtuous, today condemns us to poverty and disillusionment. Nothing will change while arbitrariness and the absence of checks and balances remain the norm.

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@lrubiof

 Luis Rubio

In memory of Professor Stephen Zamora

Defying the reality is a sport engaged in by all politicians of the universe. However, sooner or later comes the day to pay the piper. Dilma Rousseff was removed because of alleged “crimes of responsibility” in fiscal matters, but her true crime was sustaining a cadence of spending that became unsustainable. The launching of a process of impeachment is exceedingly serious and worrisome, and all the more so when it entails a strong dose of vindictiveness and petty political disputes, but all of that does not preclude her country’s finding itself in a critical economic situation, the product of an economic strategy that she and her predecessor adopted and prolonged beyond the viable.

President Lula and President Dilma were benefited, first, from the reforms processed by the Cardoso government in the nineties but, above all, by the growth in the price of commodities that, for a decade, they exported to China. When the commodities bubble burst, the entire strategy of ever growing spending and interminable redistribution without consideration for the growth of productivity became unviable.

The strategy seemed sensible: effecting transfers with the Bolsa Familia program (designed after the Mexican Solidaridad-Progresa Program), with the objective of generating greater consumption by the most destitute population as a means of emerging from poverty. The result was immediate: millions of the poorest Brazilians began to enjoy formerly unthinkable consumption power. Nonetheless, the other side of the coin was absolute madness: there was no similar growth in productivity and, more important yet, the distribution program was not modified when the economy capsized, the product of the fall of exports.

In the end, the spectacular growth that the Brazilian economy had achieved for several years did not lead to the creation of internal engines of growth that would maintain it when the commodities boom evaporated. That is, they did the same thing that Mexicans have done with oil. The essential difference is that the Brazilians collect more taxes that Mexico but are not wealthier: they spend like prosperous Scandinavians but have a third-world infrastructure.

The “temporary” removal of the Brazilian President is an internal political affair of that country, about which I do not know enough, thus I dare not opine. But the evident lesson of the changes that occurred during the Rousseff presidency is that public expenditure is not a sustainable pathway toward development. An economy grows when there are conditions for making investment and an environment in which productivity grows in a systematic way. The Mexican crises of the eighties, the Asian crisis of 1997, the Russian crisis of 1998 and now the Brazilian crisis –not to mention the recurrent crises of Argentina and the approaching one in Venezuela- have a common denominator: all came about from attempts to defy the most basic economic logic.

The spectacular growth rates that the Brazilian economy underwent in recent years led many -in Mexico and outside it- to find fault with the Mexican government for its austerity (more in years past than at present). The Brazilians, the critics affirmed, had been able to diminish poverty in a none too despicable part of the population and its economy grew at rates that Mexicans have not seen since the sixties. It is now evident that that growth was due to exceptional circumstances –the Chinese demand for goods, mainly those for mining and agriculture and cattle-raising, in which Brazil had specialized- that are not repeatable.

During these years Brazil experienced what Mexico had in the seventies: they defied the reality and it came back to charge them every penny. Brazil has no option other than to begin to reform its economy. It would be wonderful if they learned from Mexico that reforms have to be real in order for growth to be high and sustained and not mediocre like ours.

Attacking corruption

Only naiveté can lead to thinking that a statement of patrimony and the publication of a tax return can lead to eradicating corruption and not to simulation. Given the core historical function that corruption has played in Mexico’s political system, the only way of ending corruption is by changing the structure of incentives and factors that make it possible.

In the first place, it would have to commence by modifying the powers that the bureaucracy relies on that, de facto, allow it to make decisions on purchases, contracts and multimillion allocations virtually without checks and balances. That would require changes in the laws, as well in the granting of full faculties, with teeth, to the Chief Audit Office of the Federation (within the congress), in order for there to exist an organ in the legislative branch that could effectively prosecute corruption.

In second place, a law would have to be approved that protects a person who denounces irregularities and cases of corruption, a whistle blower program. And even, as in some countries, it could confer a reward on those who accuse someone of something when those cases do indeed lead to sentencing.

Finally, it would have to draw a line in the sand with respect to the past, an end-point law, by which, through a determined payment, each person -public or private- who participated in an act of corruption is protected from any persecution regarding what has gone on before. This could seem unjust but one must start somewhere.  And one must never lose sight of that only by envisioning the future will it be possible to change the present reality.

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 Luis Rubio

The great lesson of the British vote is that no one has control of political processes.  In a world where information is horizontal and everyone has access to it -as receivers and as informers- no one can limit what is known (be it true or false), what is discussed or what is concluded. Information is ubiquitous and anyone can lead a debate: everything depends on one’s skill. David Cameron initiated the process on convoking a referendum and instantly lost control: once the cat was out of the bag, the debate remained in the hands of the most skillful and the vote in those of the electors. The English government was not the ablest and the voters had other plans and concerns.

More than supporting an inexorable, absolute and automatic connection between what occurred in the U.K. and what could happen with Trump in the U.S or with López Obrador in Mexico, what is evident from my perspective is that the world has changed and no one has control any longer: the winner will be that who understands the electorate better and responds to it on its  terms. That is the genius of Nigel Farage (the principal promoter of the break with the E.U.) and of Trump in the U.S. They understood something that the others ignored. With all of their differences, the electorate in Mexico rebelled against the status quo last June 5 and practically none of the parties has understood what in reality took place.

“Public sentiment is not rational, it’s emotional,” says Ariel Moutsatsos. And he goes on: “Can one easily think one’s way out of sentiments of defeat, impotence, anxiety or fear?… Their arguments [those of Trump and the promoters of Brexit] make no sense and there is a battery of logical reasons, facts and tangible examples that clearly contradict them?… Well again, it’s not rational, it’s emotional”.

The referendum’s advocates supposed that it would be obvious, the rational thing to do, to remain in the EU, thus they left the terrain to the opposition that understood the opportunity perfectly because they read the electorate well. The establishment did not understand its isolation and insularity: as George Friedman notes, “The lack of imagination, the fact that the elite did not have the least idea of what was happening beyond their circles of acquaintances” reveals the true problem that divides our societies. And, as Edward Luce wrote, “Voters are not in the mood to embrace the status quo.”

In all countries there are people who are angry with the status quo, resentful about the clash of expectations with the daily reality, the unemployment or the underemployment and the perception of being left behind without the least possibility of getting ahead. Up until now, those persons had no way of expressing themselves; today, a few quacks who do indeed understand them changed everything: individuals who are capable of articulating those emotions and feelings and converting them into a political force. From frustrated citizens they went on to change themselves into the center of attention, the protagonists. Their force, as the vote contrary to the EU proved and how Trump’s followers have demonstrated to date, lies in the voice that these personages gave them until they became winners. Thus began the unanticipated consequences of absolutely rational decisions.

The grievances are perfectly understandable in rational terms; their manipulation required a capacity of mobilization of emotions and sentiments. That is where the triumph of these new populists resides: the reasons are relevant no more.

Is there something that we Mexicans could learn from that?   Two things seem clear to me: first, if there are aggrieved individuals in England, Spain and the US., in Mexico there are many more and with better reasons. Whoever is able to capture their attention –and their fears, ire and frustrations- can easily create an unstoppable political movement. On the other hand, there are innumerable efforts and actions that the government, the business community and diverse groups of the society head up that do nothing other than fan these flames. Put in plain terms, the strength of López Obrador not only lies in his own and undeniable ability, but also in all of the information, actions and evidence of the most diverse type that these actors put in the public way every day.

Every time the government boasts of its achievements and that the citizen does not find a way to identify himself with it anger is fueled; every time someone publishes credible evidence of corruption (whether a photograph or an analytical study),  emotions are stirred up and the one pre-candidate who denounces the corruption grows in strength day upon day; every time the enormous differences of wealth are made evident –and the attitudes that accompany them (as in the case of the “lords” and “ladies”)-, resentments grow. Sparking emotions and rousing grievances does nothing but fortify the one who knows how to manipulate them.

The country needs new emotional and rational referents for it to transform itself. The existing ones –of all the actors- do not work, thus the “poor social mood,” as the president has called it. Leadership is urgent that is capable of constructing a positive future, one that is susceptible to winning the favor of the electorate.

The Economist summed up the moment as no one else: when “the unthinkable becomes the irreversible.” The big question is whether in Mexico we will understand it or, rather, who will understand it.

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 Luis Rubio

   It is no secret that the government of President Peña has responded poorly to several problems and challenges in its tenure. A symbolic, but revealing, example of this was the decision to remove a government advertisement whose message was “ya chole con tus quejas” (roughly translated as “enough with your complaints”) as a way of addressing the President’s low approval ratings as well as the lack of credibility that characterize his administration.

It seems clear that this is a government that feels besieged, protected behind the walls of the Presidential residence but without the ability to understand what is happening outside. What is the reason for the President’s approval ratings’ reaching the critical situation where they are today, in his fourth year in office? The administration does not seem to even understand the nature of the problem, what the population is concerned about, and why all of a sudden the mood became so grim.

At the beginning of 2015, the British magazine The Economist stated that the President “doesn’t get that he doesn’t get it”, which summarizes both an attitude and a factual situation. If a problem cannot be accurately defined then it cannot be resolved.

Beyond the lack of willingness to understand the problem, something astonishing if only for what it says about political survival, it is also clear that even if the government had successfully responded through better communications and political management, the bottom line is that more than improved communication is required to address the challenge the Presidency faces. The country requires much clearer responses, new public policy proposals, and a rethinking of its institutions.

The political problems that characterize the country are structural which means that even the most elaborate media response would be insufficient. If The Economist is right (and it is), it is understandable that the Peña administration does not want to understand.

The structural problem

The structural problem of Mexican politics has three different angles: a lack of legitimacy, a dysfunctional system of government and non-institutional political activism.

Lack of legitimacy, a factor that encompasses the population’s perception of the government, the political system, politicians and parties, can be observed in all areas. Some obvious examples are the low popularity that characterizes the administration and its political party, the government’s paralysis and that of all the political apparatus, but especially the widespread perception of corruption and impunity which is attributed to the system and members of all political parties.

Although problems of legitimacy could be attributed to some particular events or specific individuals, the problem has a wider scope: a complete lack of ability to govern, a fact that, with few exceptions, is also characteristic of local governments throughout the country. Mexican governments do not govern because they are engaged in other matters and because they do not see themselves as responsible for creating conditions in which the population can improve their lives and prosper. In Mexico, a Governor does not get into his office to try to improve the lives of his or her constituents but rather to make money and or build the road towards a Presidential campaign. Governing is not a priority.

The dysfunctionality of the political system derives from the changes experienced in the country over nearly a century. In all this time, the system of government has not adapted to new and ever-changing circumstances. One example summarizes it all: when the government was accused of violently suppressing the 1968 student demonstrations its reaction was not to build a modern police force that was well-trained and taught to respect citizens’ rights. Instead, every government since then has chosen to never impede any demonstration or blockade, regardless of its origin or potential harm to others. From that moment in 1968 onwards, all governments in the country have opted to protect protesters at the expense of the citizenry that, needless to say, are the ones who produce, create jobs and pay taxes.

Security policy is merely a sign of the decrease in the quality of the Mexican government. Its structures were designed, organized and built for an era in which the government dominated most aspects of national life, there were no significant links between the population and the outside world, and the economy was effectively self-contained. This system of government remains though the population has tripled since 1960, the country is now fully connected to global media outlets, and citizens are connected to relatives abroad via email and are less dependent on government actions for their economic development.

 These circumstances explain various deeply concerning issues. For example, an attorney general’s office which does not have effective, independent and professional powers for criminal investigations; inefficient public spending 34 The Problem of Power that can always be manipulated by authorities; a world of flagrant corruption; and the absence of a professional bureaucracy or civil service dedicated to the management of national assets in a way that looks beyond the political authorities of the moment. Mexico never professionalized its system of government and is now paying the cost in the form of illegitimacy and dysfunctional and dismal performance in all of areas: the legislature, public security, public finances, justice, infrastructure, etc.

 Finally, there is the issue of increasing political activism. The good news is that much of this activism is an indicator of the maturity of a society willing to demonstrate, block government actions, criticize, and complain. Rising social activism has shown two trends: on the one hand, there are those who seek collective action without breaking the law or disturbing the daily lives of the rest of the population. Although these groups are growing in number, their impact can only be observed as they acquire public visibility.

Activists that take to the streets and blocking avenues as well as public buildings are excluding the citizenry and advance their own causes only by being outside of the institutional and legal framework. Some even go so far as to ask for the resignation of the President before the end of his second year in office. The fact that even demonstrations as well organized and motivated as those arising from the Ayotzinapa case have not achieved the goal of removing the President is a vivid example of the enormous distance between Mexican politicians (a topic discussed in Chapter IV) and the citizenry. Above all, it is a reflection of the aforementioned second problem: in the absence of the mechanisms that are inherent to a modern system of government, such as checks and balances, the public response to a dysfunctional government cannot be anything other than protesting, whether in an active or passive way.

Activists in Mexican society have not acquired the capacity to mobilize effectively or the power to jeopardize the government’s stay in power though this is what many such groups aspire to. Nonetheless, they have had the effect of branding the government as illegitimate, decreasing its approval ratings, and paralyzing it altogether. These all are signs of a structural problem of enormous depth. The result is that 21st century Mexico is characterized by a system of government that does not work and by a society that lacks the most essential means of participation or influence, all of which creates an environment of frustration, uncertainty, and distrust.

Old solutions

In the industrial era, governments had the ability to control their societies largely because the dynamics of production generated a self-contained system that took hold through forms of organization and participation inherent to that time, namely labor unions. In this context, all a government had to do was to create conditions of certainty for essential political and economic stakeholders and everything else would emerge from those conditions.

Back then, stability could be explained by an entire social and productive structure that would not defy those in power and did not have the capacity or information to do so. Life was simpler and the tasks and services required of government were easier to perform and provide. The old solutions worked because they were not old then –they were responses to the specific circumstances of the time, the country, and the world.

Nowadays, the real business -in social, economic and politic fields – is information and knowledge. That is the source of development, in the broadest sense of the word, of a society. What used to be about control now works thanks to creativity; what used to demand discipline now requires merit. The old education system was conceived as a mechanism for strengthening the PRI’s hegemony and controlling the population, but what is required today is a population with the ability to think, analyze, process, and transform information into economic development. In the era of knowledge the discipline of the industrial age is no longer functional since every person has more control over their lives and does not feel a connection with the old control mechanisms. In other words, the fundamental structural problem of Mexican politics is that they are stuck on the dogmas that belonged to the era of the Presidency of Lázaro Cárdenas while the country and the world now live in the information age.

My impression is that Mexico’s main problem is that the government still in place today was formed after a revolutionary movement and continues to act as such. Unlike governments emerging from society or which aim to address the population’s demands, Mexican administrations come from a group that won the Revolution and never felt obliged to cater to the people. Fidel Velázquez, the fabled labor leader, once said about the government: “By the force of arms we won power and only by the force of arms will we relinquish it.” Mexico’s system of government has not evolved towards democracy or along paths that will enable its professionalization. One needs to observe nothing more than the way in which the rules of the game (the real ones, not those written in laws and regulations) are modified with every new administration: it is difficult not to conclude that there is a fundamental problem of institutional weakness in the very structure of government.

The problem worsened as the system was modified in the nineties when the first major electoral reform (1996) led the single-party scheme to transform into a three-party system. That is to say, Mexican democracy has made great strides in electoral matters but never really opened the system in terms of power. What the various electoral reforms after 1996 did was to open up the system for two new stakeholders, PAN and PRD, without altering the power structure in Mexican society. This is neither good nor bad, except that, besides incorporating these parties into the structure of power, it did not improve the quality of government or, in the long term, provide legitimacy for the system. It is not difficult to conclude that the poor economic performance of recent decades reflects not just economic structural factors but also a reflection of the institutional weakness that characterizes the country which is, in turn, a result of political disagreements.

The deeper issue is that the objectives that have been pursued through a diverse package of reforms cannot be achieved without modifying the system of government, because a great deal of what prevents the successful implementation of the reforms is related to the political system’s way of functioning (or not functioning). The problem of power can be observed in several ways: in the perpetual unrest, in the poor quality of governance that characterizes both federal and local administrations, in the lack of continuity for public policies, and in the insecurity in the absence of a judicial system that is able to address and adjudicate everyday problems.

Although most diagnoses agree on the nature of the problem, the issue at the heart of the problem cannot be resolved until society forces politicians to respond or a leadership able to form a modern and functional institutional construction emerges. The 2015 midterm elections showed a society with an increasing willingness to assert its voice, but with clearly limited resources and skills to do so.

The Presidential response

The aforementioned context should provide the explanation for why President Peña Nieto failed to advance his government agenda. Having previously been a successful Governor, Peña Nieto claimed efficacy was his greatest asset. As soon as he took office, he initiated a legislative whirlwind. In a few months, Mexico’s Constitution had had its main articles modified. The agenda of change was not new: everything that was reformed had already been discussed for decades; the impressive feature was his ability to transform proposed reforms into law. The President displayed great negotiation skills, but the key factor (which his predecessors in the PAN party could not handle) was that he was able to control the PRI legislators. 38 The Problem of Power Having been the historical owner of power in the 20th century, the PRI is the beneficiary of the status quo. Its opposition to the previous proposals for reform can be explained due to its desire to preserve its sources of power and cash. Peña’s success was based in controlling these groups and preventing them from blocking the legislative process. However, as soon as it concluded, those same interests returned to ignore the reforms once again and continue with their traditional businesses. More important, the President did not have the will, or the power, to oppose them.

In addition to the legislative whirlwind, the new government placed itself above society and recreated old control mechanisms over the general population, Governors, the media, the unions, and businessmen. This reflected a core consideration: the government thought that the country needed to return to order and that the best model for this was to recreate the PRI’s golden era: the sixties. Although it is obvious that the old political system and the ancient economic strategy did not collapse because the then-rulers wanted it to, Peña’s government ignored the changes that had happened both in Mexico and in the world in recent decades and decided to carry out his own transformation agenda and created its own reality, as if the world would fit its preferences rather than the opposite.

The population saw the arrival of Peña Nieto and his determination with a mixture of awe and anticipation. As if he were an ancient Tlatoani, (Aztec leader), Peña was there to save Mexico. Mexicans watched him with astonishment. However, the administration’s economic performance went from bad to worse, tax increases affected the consumption of the poorest, and the anger of those affected by the increasing controls started to rise. As soon as the first crisis appeared –the straw that broke the camel’s back– all of the country had turned against the President. After the deaths of 43 students in Iguala in September of 2014, the political message was clear: it was an excuse for the whole population, disguised in collective anonymity, to express its dissent. “

The extraordinary thing was not the anger or the protests, both observable and predictable, but the government’s complete inability to respond. Gone was the effectiveness or promised efficacy –it was now replaced by a frightened and paralyzed government. The reality of power in Mexico won: it was evident that the government’s agenda would not alter the power structure but merely provide some efficiency to some sectors or activities, all without undermining the interests that benefit from the system.

President Peña’s experience showed that Mexico has a serious problem of power: there is not a basic set of rules of the game that enjoy full legitimacy amongst political stakeholders; therefore, there are no rules at all. The President has enormous powers that enable him to exercise his will arbitrarily at any time which is why investment and credibility are limited to a sexenio, the six-year presidential period, and everything revolves around the trust (or lack thereof) that the President can inspire. Thus, the main problem is that Mexico lacks institutions that provide permanence and legitimacy to the system of government as well as guarantees for Mexican stability.

Mexico is experiencing a permanent schizophrenia: major changes and poor results; successful regions and extreme poverty in others; a government that promises efficiency but only provides a small amount of it. Mexico is caught between the old system of control that still remains and a society that is more prepared and demanding. Just like old times, this enables an apparent stability, but guarantees a permanent illegitimacy. That is, until the arrival of another President with new promises.

• From the new book The Problem of Power: Mexico requires a new system of government https://www.wilsoncenter.org/sites/default/files/the_problem_of_power_mexico_requires_a_new_system_of_government_0.pdf

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Luis Rubio

The traditional question that political scientists posed in decades past was who gets what, when and how. This economy-driven focus derived from the principle that economic performance (national or by region) exerted a direct impact on the perspective of the voters and allowed for the development of models of predictability of electoral behavior. Behind those models lies a premise that ceased being valid some time ago: they assume the existence of order and act under the dictum that this is permanent.

In a very distinct milieu, on being invited to attend the 1960 U.S. presidential election, Vicente Lombardo Toledano had it explained to him that for the first time in history, computers would be employed for the electoral process and that this would permit knowing the winner the afternoon of that same day. Lombardo, an old war-horse of Mexican politics, responded “That’s nothing; in Mexico we known six months before”. The premise was the same: the order is immanent, indisputable.

In both instances, the assumption of a permanent and predictable order has disappeared.

After the financial debacle of 2008, some analysts began to speak of a “new normality”, intimating that we had passed from one threshold to another, but that the new one would be sustainable, albeit, in this instance in economic terms, less benign. Everyone seeks order because it allows for stability and some degree of predictability. Individuals, families and countries crave those elements and become attached to the offerings of a semblance of order. Unfortunately, if one observes the world around us, everything suggests that we are entering into an era of disorder at the worldwide scale. Inexorably, Mexico will be part of that maelstrom, on occasion the protagonist.

The news of recent times reveals a grave deterioration of the order gestated after the Second World War and, admirably, after the collapse of the Berlin Wall. Migrating hordes relentlessly accost the shores of Europe, the resurgence of nationalistic movements in France, England, the U.S. and, in general, in the greater part of the developed world, imply a rejection of the existing international order, in good measure because there exists the well-attested perception in those nations that the benefits have come to roost in other nations. Each case is distinct, but the common denominator is clearly the sensation that others are winning or, even, that they are making off with the advantages of the previous winners. This week, the U.K. is faced with a momentous decision in this matter.

The British referendum responds to a clamor, hitherto from the Left, today concentrated in the Right, for the return of decision-making faculties to the country. For many of the British, the European Union (EU) has seized too many attributions, thus depreciating the quality of life of its inhabitants; in particular, they reject two factors: freedom of transit for potential migrants who have ended up “inundating” England, one of the most attractive countries for persons fleeing their native countries due to the dynamism of the British economy and the liberal nature of its institutions. On the other hand, the powers that European judicial instances have assumed are discerned by the English as aberrant and excessive. In one way or another, these disruptive elements have eventually placed in checkmate the functionality of the economic benefits that the U.K. acquires and that, without a doubt, in objective terms, are superior to the costs. However, there are no rules that govern perceptions and believers in maleficence have been gaining ground.

The decision that the British make is theirs, but its consequences could be dramatic. Not by chance have top-level U.S. and European dignitaries, from Obama down, attempted to skew the result in favor of remaining in the EU. What is evident is that this decision could trigger a dismemberment process not only of the EU itself, but also of the entire order constructed in the Post-War era and that has done so much good for humanity in terms of economic growth, stability and peace. The Americans themselves detect that their stability, above all at such a complex electoral moment, could be harshly affected.

Although distant from the European forum, we Mexicans could be severely affected by the outcome. The massacre of Orlando some days ago inevitably fortifies the hard liners, in this case Trump, as does the isolation inherent to the proponents of the so-called Brexit. This suggests that the succeeding months will be excessively risky for Mexico: every time Trump’s stock goes up, Mexico’s will be affected in the financial markets as well as in the exchange rate.  And still worse, given the weakness of Mexico’s fiscal accounts, the current vulnerability is extreme.

The world of today is exceedingly convulsive and complicated; there is no way to avoid its benefits from concentrating or for its damages not to affect us. What is urgent is pragmatism; what is available is vain and rhetorical nationalism. Regrettably, as a government and a society, Mexicans have presumed that we can abstract ourselves from what is happening outside and pretending that, following worn-out dogmas, we will attain development. The ensuing months will put that premise unsparingly to the test.

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Luis Rubio

Corruption has become the nodal leitmotif of Mexican politics. Although overwhelming evidence does not exist with respect to the degree that the former affects, facilitates or impedes the functioning of the economy, the political factum is that corruption has metamorphosed into the factor around which public discussion, electoral processes, and decisions on savings and investment gyrate and, however much they deny it, the politicians’ calculations.

Beyond the analytical evidence or absence thereof, at least part of the intellectual, political and economic paralysis that the country is experiencing is due to the perception of the ubiquitousness of corruption.  The question is what to do about it.

Instead of heading up the procession, the government has managed to ignore the problem, procrastinating and creating (or promoting) mechanisms designed to keep up appearances without anything changing. The vacuum that this non-acting created got the government clobbered in last Sundays elections, while it handed the initiative on issues of corruption in the hands of activists and NGOs, many of which have turned their cause into a new religion, basing their feat not on analytical arguments (in part because the evidence is not infallible), but on beliefs: if one or another program is promoted or if a pre-established formula is adopted, corruption will evaporate as if by magic.

At the heart of the discussion (or of the array of monologues that proliferate) on corruption lies a fundamental contrast of views: for some the solution to the problem of corruption resides in new laws, independently of the fact that there’s an interminable pile of laws that are not applied. María Marván of says there is no problem sufficiently small not to merit a new law or sufficiently large not to justify a constitutional amendment. But that does not dissuade the believers, who suppose –against all historical evidence- that more laws, more regulations and more requirements, in addition to new commissions and new governmental agendas, will eradicate the phenomenon. At the end of the day, the relevant question is whether this manner of proceeding is susceptible to modifying the reality, which is all that matters.

The alternative is to think contrariwise: instead of engendering more of the same (more laws, more bureaucracy), why not recognize that, at least partially, what generates opportunities for corruption is precisely the nature of our laws, regulations and bureaucratic organisms? Might it not be that the existence of so many restrictions, bureaucratic attributions and requirements is what makes possible -and, in fact, furthers- corruption?

A personal experience, in a very specific space, taught me a great lesson: when I was a student in the U.S., I went one day the Registry of Motor Vehicles to request the insertion of a hyphen between my paternal and maternal last names on my driver’s license due to the problems I was having at the library and at the bank, in that in line with U.S. usage, they were recognizing me according to my “second last” name and not the first. Thinking of this as something obvious, I went to the office and requested the change. The desk clerk was very kind and correct and opened the page with my name on his screen but showed me that he did not have access to those fields. He told me something like “I sympathize with your problem because I went through the same thing myself, but it cannot be solved except with a mandate by a judge”.

Years later, when the express abductions began in Mexico City, I went to the drivers’ license office in my local government to request a change of address in order to remove that of my home. Armed with a statement with my office’s domicile, I explained the reason for my visit to the functionary.  Without blinking an eye, he told me “one hundred pesos”. One hundred pesos for what, I asked him. “It is one hundred pesos for the service”. And if wanted to change my name on the license? I retorted. “One hundred pesos” came the response. The one hundred pesos were for doing me the favor of changing the information and the functionary had access to any field on his computer, conferring upon him enormous power.

I cannot affirm whether the Mexican functionary was corrupt and whether the U.S. model was one of utmost probity. What I do know is that the conferring of such great discretionary powers on minor functionaries (and major ones) is immensely propitious to corruption. It would not occur to the U.S. civil servant to charge for the “service” because he had no possibility of providing it.

If one extrapolates these examples to the daily life of the bureaucracy where construction projects, purchases, contracts, regulations and all kinds of permits, licenses and concessions are decided upon, the potential for corruption is immense. Discretionary powers in the hands of public officials acting without effective counterweights are equivalent to a golden opportunity to commit arbitrary acts. Although the federal bureaucracy faces an infinity of review mechanisms (that obviously do not hinder corruption), at the state and municipal levels that does not even exist.

Thus, would it not be better to eliminate so many requisites for permits and licenses that confer such powers on the authorities that favor special interests? Would it not be better to conduct all governmental-purchase transactions via the Internet, in view of anyone who wishes to view them? In other words, would it not be better, to open rather than to close, to trust in real transparency –not the legislated one but the one that truly allows observation- and in the markets?

After 500 years of history –three hundred of colony and two hundred of bureaucratic reign- it would be reasonable to conclude that more requisites and restrictions would yield exactly the same result: simulation and impunity.

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Luis Rubio

They were interminable years of luxury, with all of the vices imaginable and more, the worst excesses. Life was to be enjoyed and absolutely nothing was to be changed. Power and money accumulated, everyone rendered obeisance and many, the majority, were afraid of it. Few dared to oppose it.  But then what had to happen, happened:  in 1982, the doctor told him: lose weight or die. Juan G. got the message and went on a diet. But he did not understand the entire message: he did not want to change other than the indispensable: why make a change if everything is going excellently well? He had a surgical procedure and returned to a sustainable weight: from nearly 150 kilos he came to weigh 70 but did not change his lifestyle. His privileges and those of his entire cohort were not subject to discussion, independently of what the doctors told him. Not even his wardrobe.  That’s when the mending, the patching up and the small quick fixes began.

This formerly obese person walked down the street with enormous clothes that did not fit him. They tripped him up whenever he took a step, buffeting passersby without his even noticing. The baggage was so great that he was unable to focus. His pants fell down and his shirt pocket fit him at the level of his buttock. But no: he was not going to change his wardrobe because his historical integrity came first.  He was not disposed to modify his way of being: with his operation he got what he wanted, which was to survive and continue enjoying his life, just like before. Yes, the circumstances had changed, but with his rhetoric his pace of life could be maintained. The world owed him and not the reverse.

With it all, some changes and adjustments were indispensable, but as long as they would not alter the essential:  he would not surrender anything. A seamstress moved his pocket to the correct place, more or less… The leather worker made him a belt tailored to his waist size but the wardrobe remained fixed to the realities of the past. He looked ridiculous and his movements were exceedingly clumsy, but life was to be enjoyed, not shared. From mending to mending, Juan G. went through life as if nothing had happened. He weighed less but his vices had not changed at all: the parties, the excesses, the expenses. He had changed so that nothing would change. Juan Government continued alive and kicking. The country, well, that’s the least of it.

In the last three decades all types of reforms have been carried out. In the eighties, the crisis dictated the inevitable, that which Brazil has to do now: lose weight and update itself to the new reality. However, losing weight was not sufficient: the expenditure was reduced but the country continued not functioning. That was how the reforms began: the liberalization of imports, the deregulation of diverse sectors and the North American Free Trade Agreement (NAFTA). This produced spaces of growth and productivity.  NAFTA turned into an exceptional regime because it consisted, de facto, of the adoption of international rules and standards. Safeguards were carved out –adjustments and fixes- so that Juan G. and its cronies would not have to change anything.

Years later came reforms such as the criminal one, which should now be entering into operation. The same for corruption and transparency. In each and every one of these cases it appeared as if there were changes but with the wholehearted intention of not modifying absolutely anything essential: the objective was not to construct a modern and dynamic country but rather to preserve the regime of privilege. Instead of arguing about how to implement the approved legislations in better fashion, the dispute continues to be over how to avoid their content and objectives, how to create exceptions for something to appear to work while nothing changes.

The political system born at the end of the Revolution adapts, more or less, but not in order to change. It is willing to incorporate new members into the paradigm of privilege (such as the PAN and the PRD) but not in order for the country to grow and develop because that would imply its stopping being what it is and what it is for.

The problem now is that some of the mending that have been adopted entail consequences and are susceptible to creating new problems, some potentially uncontrollable. The criminal reform is incomplete and on not being terminated in time and form, would lead to the inevitable liberation of thousands of prisoners, many of these violent and dangerous. The half-way economic liberalization is condemning the economy to perennially mediocre growth levels. Growth of public spending diminishes growth. The perennial lack of attention to the problems of Pemex could lead to the public debt’s increasing another five points of the GDP or maybe more. Mending has its limits because it does not solve anything: it only achieves kicking the can ahead until the reality catches up, becoming uncontainable and hazardous. No more than sheer self-deception.

The government –in fact, the State as a whole- has the enormous challenge of responding in the face of a reality that is deteriorating swiftly. How will it respond? Its options are not many, but it is clear that it can proceed in two ways: on the one hand, it could see to what is urgent, accepting its errors and duplicities to emerge from the hole in which it finds itself, at least for now. In some cases, it would have to recognize the non-viability of what exists (such as the criminal system) and draw itself in to avoid a political and social catastrophe. The alternative: change the paradigm, purchase a new wardrobe and give the country a chance.

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Luis Rubio

“Spain has been without a government for months and its economy improves every day”. So begins an analysis* on the Spanish situation. The description is extraordinary and enlightening, above all because it contrasts two distinct visions of what makes a country and its economy work. Although the Spanish politicians have not come to an agreement for assembling a coalition government (which has obliged the holding of new elections), the country is functioning normally. From the Mexican perspective, this is amazing, as the impasse after the 2006 election illustrated; after living through such sensitive and distraught moments in 1982, 1988, 1995 and 2006, times when political uncertainty reached formerly unimaginable levels, can one conceive of what would happen if Mexicans were suddenly deprived of a government, without a clear authority figure? Even though it might appear absurd, the country was paralyzed at each of these moments because there was no clarity with respect to the future: the ambivalence about who would govern or whether the country would emerge from those most fateful moments incapacitated the society, the politics and the economy. None of that is occurring in Spain and that contrast led me reflect on Mexico’s own reality: it is plain to me that what differentiates us from Spain is exactly the difference between government and bureaucracy.

One measure of development is the quality of the government, not measured in terms of the elected political leaders, but precisely the opposite: the bureaucracy that makes the government function from day to day, independently of the politico-legislative decision-making processes. Rather, what in civilized countries makes the government work is the professional bureaucracy that is charged with cleaning the streets, the workings of the justice system, the police who provide security and, in general, the entire civil service that makes life flow without this being noticed. Under this leveling rod, Spain is similar to any of the developed countries that function independently of the individual -person or party- who governs.

The difference between government and bureaucracy permits a nation to maintain its stability and to function normally independently of the political disputes. Anyone who has observed the way that Europeans or Americans behave at times of crisis can attest to that no one imagines basic government-provided services will stop working, as takes place repeatedly in Mexico at exceedingly fragile moments like those noted previously. In those countries, while the government establishes goals, criteria and regulations, the bureaucracy is responsible for implementation of the latter in a professional and non-partisan manner. The extreme is the U.K., where the sole personage who changes when a new government takes office is the respective Secretary, to whom the highest ranking public servant reports. Within the ministries there are no political appointments: all are professionals. Something similar happens in Spain. That is what allows the government to function even at times of uncertainty such as that which the Iberian nation has been experiencing in the past several months.

The contrast with Mexico could scarcely be greater. Here everything changes every time a new president assumes command. Instead of a professional and efficient bureaucracy, each change of government entails the reinvention of the wheel and the onslaught of new cadre of public officials whose credentials have nothing to do with their skills but with their friendships and political relations. This extends extra muros: the phenomenon is reproduced at every level of government, whether a unit head or a Secretary; everything changes. Team members in the government work for their boss, not for the citizenry. That explains why we practically never have an expert person in public posts, at least knowledgeable in what concerns their nominal function.  Many are masters in politics and camaraderie, and they adapt to any situation; however, none views the citizen as their raison d’être nor even less so the government as responsible for the normal playing out of daily life, without a fuss.

The absence, for months, of a governing coalition in Spain has revealed something else: not only does the economy function well, but also it could work much better if the agents who operate therein –entrepreneurs, workers, bankers, etc.- were less subject to the infinity of requisites, regulations and requirements that are only explained when a government wishes to make it appear that it does indeed, well, govern. In the article cited below, the author compares the performance of England and Germany after the Second World War: while the German economy underwent an exceptional boom, the English economy –all regulated and planned- barely grew. The finding is not surprising: what a country requires is a professional bureaucracy that keeps the boat afloat and it is not in need of a government that limits its capacity to develop.

In Mexico that difference is non-nexistent. While in Spain, despite the stream of regulations, above all labor, which persist, the economy works better without the government than with it. That is something that the politicians, especially those of the Spanish Podemos Party and their grand plans of real or virtual nationalization, surely did not imagine or calculate. The lesson for us is, unfortunately, very distinct: Mexico urgently requires something that does not appear on the agenda of any party: a professional, efficient and competent bureaucracy.

*Bartholomew, James, Who needs governments? The Spectator, April 28, 2016

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@lrubiof

Luis Rubio

In his book A Rage for Order, Robert Worth analyzes and describes how the so-called Arab Spring came about: the great expectations with which it was launched, the forces that later took control, the violence that broke out, the divisions that proliferated and, later, the collapse, different in each case, but nearly always disastrous. The final panorama is one of desolation but, above all, of the furious search for mainstays of order for people to survive. The dearth of order, the uncertainty and the violence ended up devouring everything, to the degree that, as Maslow would have said, people returned to the most elemental.

The great question for the Mexico of today is how to change, how to transform the country without ending up in the type of chaos, or authoritarianism, in which that revolution concluded. An analysis of this nature can easily lead to withdrawal: “let sleeping dogs lie”. But analysis is necessary to understand what needs to change and how to achieve this in the best manner. The issue of corruption is particularly important on this plane.

In recent months, the pressure to act on matters of corruption has been on the rise and from the most diverse trenches action has been demanded on the part of the legislative power; President Peña himself proposed the “national anti-corruption system.” The activists have been mounting attacks in all of the forums, but the resistance to any change that was evidenced in the Mexican Senate at the end of April made it apparent that this touches an extraordinarily raw nerve. There activists clashed with the real political powers and… nothing happened. The pertinent query is whether the strategy followed to date to attack the corruption problem is the adequate one with regard to being susceptible to modifying the reality, because that is, at the end of the day, the only thing that is relevant.

In developed countries, the law and the institutions function due to the combination of two factors: a basic agreement on the reign of the law, and the existence of effective mechanisms for enforcement of the laws. It is the adherence to that set of principles- the carrot and the stick- which makes the society work. Mexico never had the equivalent and, however many tons of laws we possess, there is no such very fundamental combination of basic agreement and compliance.

Mexico achieved its stability in the XX century by means of the PRIist order, whose essence consisted of the exchange of discipline and loyalty to the system for the promise of access to power and corruption. These factors, promise and access, lent coherence and viability to the political system. In this fashion, the glue that held the post revolutionary political system together was that interchange, in which corruption played a primordial role in the stability of the country.

For some time, that era’s vast authoritarian structures were highly effective in enforcing loyalties and peace; nonetheless, the country’s successful performance over time eroded those strengths until the structures caved in. From this perspective, the electoral reform of 1996 is supremely revealing because instead of changing the reality of the power, it incorporated the two largest political opposition parties into the system of privileges and corruption. That is, it preserved the old system and its instrument of cohesion (corruption), now including the opposition elements. It is not that the system was liberalized, but solely broadened the spectrum -and the beneficiaries- of corruption.

Observing the scenario thus, the point-at-issue is how to do away with corruption without leading to the collapse of the political system. In other words, how and with what to replace the stabilizing function that corruption represents as the cement that holds everything together, even more so as stability is ever less held by cement than by common pins. Eliminating corruption overnight, assuming that were possible, without replacing its stabilizing function could easily lead to outbreaks of instability and violence. By the same token, preserving the system of institutionalized corruption would only continue eroding any sense of order and eliminating what little remains of the system’s legitimacy. More than doing away with corruption, the key lies in how to substitute its function through institutional processes; phrased another way: adding and developing supporters rather than confronting all the political class.

If corruption is not merely an enrichment process by those who wield political power and/or control crucial hinges in decision-making for the allocation of public projects, but a mechanism of political stabilization, the solution cannot be found in a pure and simple, unilateral confession of guilt (through publicizing tax and patrimonial statements) because that would eliminate the incentive for maintaining loyalty to the system. Of course, it is evident that corruption transcends by far the hypothetically required levels for a political actor to maintain his or her allegiance; nevertheless, no one knows what those limits are; thus, without a mechanism of substitution, only those who have accumulated prodigious fortunes would be susceptible, in theory, to accepting a systemic change.

I do not have the solution to this riddle, but it is obvious that the new exchange would have to embrace the following: drawing a line in the sand regarding the past (with some relatively nominal payment for past corruption); it would cover all Mexicans (not only politicians) and be accompanied by a permanent and credible prosecution mechanism even for the most minimal violation heretofore. The alternative might well be a return to the insurgencies of yesteryear.

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Luis Rubio

According to an old Chinese proverb, three things never return: the arrow launched, the word pronounced and lost opportunity. The history of Mexico in the last decades is, in good measure, that of the clash between excessive promises and irrepressible expectations. But still worse have been the opportunities lost or, perhaps even more seriously, the opportunities wasted. The combination explains to a large extent the prevailing distrust, the mercurialness of the perceptions and how difficult it has been for the governments of recent decades to achieve and maintain the population’s credibility.

Of greatest impact is the clash between realities and perceptions. Mexico has changed radically over the past decades. It has gone from being a debt-ridden and introverted economy, an economy engrossed in itself, to globalization with an immense creative and productive capacity, converting it into one of the manufacturing powers of the XXI century. In politics, Mexico progressed from an authoritarian and totally obscure system to an incipient democracy and one with problems, but one that elects its governors (distant as they may be), exposes the abuse, the violence and the corruption. The mix is certainly not optimal and the result to date is imperfect because it has not reached its core objective, overall development, in addition to that it has left in its wake innumerable mistakes, sizeable differences in incomes, persistent vices and incomplete (or untouched) processes. Despite that, the reality is infinitely better than it was thirty years ago.

The advance in the country in these decades is undeniable and the improvement palpable (and measurable); however, the collective spirit is negative, if not catastrophic. I would daresay that the explanation for these contrasts does not lie in what has been done, but above all in the enormous opportunities that have been squandered. Nirvana has been promised but, when the time comes, one only approaches the pearly gates but that ends up not being enough. Of course we’re not in paradise, but for want of a better metaphor: the objective reality of all of these decades is infinitely better than the perceptions. The question is why the distance is so vast.

NAFTA is an example of successes as well as insufficiencies. NAFTA has been the envy of the whole world from when it was negotiated because it has permitted investment to multiply, exports to rise, high-productivity jobs to be created and the balance of payments to be consolidated. NAFTA has acquired all of this for Mexico, although not for all of the population nor for the whole economy: thanks to the lack of suitable strategies for integrating the entire economy into this circle of accomplishment, NAFTA, however transcendental, has not lived up to its full potential for the totality of the country. Despite its huge benefits, NAFTA continues to comprise a misspent opportunity for a large number of Mexicans.

Fox obtained what seemed impossible on winning a victory over the official party that held a virtual monopoly of power, but as soon as he arrived at Los Pinos he slept on his laurels, took no heed of the reason for his success, and threw away the opportunity to create a new political platform and one of economic growth. Fox did not do harm to the country (a milestone in itself), but he did not make the moment that he himself generated his own. Another clash of promises and expectations.

The government of President Peña promoted a package of extraordinarily ambitious reforms but this came to a halt when implementation costs began to pile up.  As with NAFTA, the reforms, at least some of them, will bear fruit over the course of time, but the false moves have taken their toll: the promise of the effective government was finally, only a promise. Another contribution to the clash of expectations.

Those three examples illustrate our way of being: it’s not that Mexico doesn’t advance, but rather that it tends to take two steps forward and later, one step back. The progress is tangible and real, but the perception is in the last analysis the opposite, above all because the governments oversell the advances so excessively that it is never possible to attain what is promised. The population winds up quantifying what was not done instead of recognizing how much was in effect advanced.

NAFTA is the pillar and engine of the Mexican economy; without NAFTA Mexico would be the same as our neighbors in the southern hemisphere.    Fox did not change the country, but the triumph over the PRI shattered the power monopoly, severed the PRI from the presidency and, with that, impeded the possibility of the type of control and centralization at the heart of the authoritarianism of old from returning.  Reforms such as that of energy and, potentially, the educative reform, are likely to transform the country radically. In a word, the country is much better today than thirty years ago. What is not better is the system of government that we have, which engenders, as it does that clash of opportunities and expectations.

The cause of so many lost opportunities resides in the distance, to date insurmountable, between the politicians and the citizenry. Mexican governors –of all the parties- enjoy formidable protections that allow them to promise something without ever having to deliver. Worse yet, they do not feel obliged to even offer explanations for their poor performance.

A better political arrangement would address these conundrums. What is paradoxical –inexplicable- is that our governors prefer opprobrium than attempting to bring about a new order or, at least to recognize that the existing one doesn’t work. As with the Chinese proverb, they prefer the arrow launched, the work pronounced and the lost opportunity.

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