Pernicious Commissions

In The Stranger, Camus tells the story of a man alienated from the world who kills an Arab in Algiers simply because the sun was bothering his eyes. Meursault,the leading character, is condemned to the guillotine and in his cell begins to meditate on the absurdity of existence. Something like that happens to me with the commissions, councils, and other economic or political regulatory institutions that have come to be created in the country during recent years and, above all, on the insistence of making these into entities of “citizens”.

No society is born with all of its problems or contingencies sorted out. Rather, time comes to compel it to adjust laws, modify practices or construct forms of interacting that allow a society to achieve stability. In fact, during their process of development, all societies over time construct mechanisms, processes and institutions whose purpose is to revolve problems, confer continuity on the things that they prize, limit bureaucratic excesses, avoid abuses, in short, institutionalize.

The submission of kings to the Parliament in monarchic systems is a form of institutionalizing power, in the same manner as the adoption of rules for the continuity of the governmental expenditure when the legislative body fails to arrive at a budgetary agreement in time was a way of stabilizing the functioning of a government. What in England took seven hundred years and in the U.S. two hundred, in Mexico has necessitated construction in a very brief time lapse to a great extent because the authoritarian system obviated any need (or possibility) for institutionalizing the country.

The politico-legal framework that was constructed throughout the XX century in Mexico was one of absolute arbitrariness. The authorities possessed enormous latitude for deciding on any issue: the laws established cumbersome requirements, but always had bestowed upon the former vast bureaucratic powers to justify any decision, these usually responding to the political interest of the leader in office or to the pecuniary interest of the functionary him/herself. The political and economic transition that Mexico has experienced has obligated the marking off these faculties, but an enormous potential for abuse persists.

I understood this some years ago when I had the opportunity to observe the way the United States Securities and Exchange Commission (the SEC) works. The faculties of this entity are not only vast, but also it enjoys a brutal margin of discretional powers. However, in the process at which I was present, I detected one thing that appears simple but that is in radical contrast with our reality: this entity has discretionary attributions but is never arbitrary. The reason for the difference is that its resolutions (each a brick upon a brick) explain its decision, but also why this was arrived at and how it modified the existing precedents. In Mexico’s case the Federal Competition Commission (CFC), for example, issues its resolutions in a letter with no explanation, conferring no certainty to those that are regulated and opening a vast sea of possibilities for changing course the next time around, all without an explanation. That’s the difference between discretion and arbitrariness.

The objective to institutionalize can be seen in the creation and development of entities and institutions as diverse and dissimilar as the North American Free Trade Agreement (NAFTA) and the Human Rights Commissions, the economic regulatory commissions (in Competition, Communications, Hydrocarbons and Energy) the Federal Electoral Commission (the IFE), the Federal Institute of Access to Public Information (the IFAI) and the Institute for the Protection of Bank Savings (the IPAB). These institutions have come to join up with previously existing ones such as the National Banking and Securities Commission (the CNBV).

The construction of institutions and political agreements is a crucial component of the civilizing process of any society and constitutes a benchmark, a gauge, of the development process itself. No one, except for those preferring governmental arbitrariness, could object to this type of body and structures of regulation, supervision and surveillance.

Of course, the group of entities and processes with which I attempt to illustrate the phenomenon constitutes a cornucopia of dissimilar things, many of which have nothing to do with the nature or the concept of the others. For example, NAFTA is a commercial and investment arrangement; however, one of the primordial objectives in its conception was that of furnishing guarantees for investors on the thrust of economic policy and, in this sense, constitutes a mechanism thought for institutionalizing the economy. Human rights commissions were created to monitor the authorities, above all the judicial authorities, in order to avoid abuses in these underworlds. Regulatory commissions exist to oversee the functioning of the markets. Each of these instances has its instruments, processes, and ways of being. Some comprise in reality decentralized mechanisms of the government to act as the authority, while the purpose of others is to exercise moral suasion on diverse actors or authorities.

Despite the diversity of these entities and institutions, a call is frequently issued, by the society as well as by the politicians, to construct “citizen” institutions or to convert the existing institutions into “citizen” ones, presumably stocking their councils with persons emerging from the civil society and not from the government. I beg to differ. Although there are entities in which it is the citizens who should be the lead voices because their objective is that of exercising moral suasion (as is the case of the human rights commissions), the regulatory commissions, beginning with the economic and following with the electoral ones, should be entrusted to upright, professional public functionaries, experienced and with records that demonstrate competency, honesty and commitment to public duty. If one observes today’s panorama, the difference is very simple:  those who are career civil servants do not seek the public spotlight and solely devote themselves to their work. Those who are “citizens” in these functions only cover their backs and engage the media to slake their own conceit.

A modern society requires solid institutions and entities, many of these autonomous, but all administered and presided over by honorable functionaries, professionals in the area, whose sole interest would be the due functioning of the activity and the sector. Thus, these entities require very well structured checks and balances that oblige commissioners and/or board members to abide by the norms and comply with their function not on center stage but rather with results.

A fundamental challenge confronting the country is that of constructing an efficient system of checks and balances that consolidates all of these regulatory entities, but in such a way that it eliminates all vestiges of arbitrariness. This is a job for professionals, not for citizens without experience in matters of the State.

www.cidac.org

@lrubiof

The PRI Gene

The PRI victory engages many possible explanations but, beyond the specific situation –the performance of the last two administrations and the extraordinarily well organized Peña campaign- there is an angle that merits more profound analysis: that of the political culture that this party built throughout the past century and that, judging by the result, could still be imprinted in the Mexican’s genetic code.

Looking back, the central characteristic of the PRI regime of the XX Century was its capacity to administrate and maintain power accompanied by its incapacity to construct a State. This is not a play on words: the key to the PRIist structure was unipersonal power that, although not absolute, conferred enormous powers upon whoever occupied the presidency. As Roger Hansen wrote, the great success of the PRI was that of reproducing the PorfirioDíaz regime but tailored into a six-year presidential term of office. To maintain that power, “the system” constructed a cultural hegemony that not only legitimatized its own power, but that also allowed it to construct a system of fealties and a credibility that far and away transcended the strictly political ambit.

Will it be this cultural hegemony of yesteryear on which Enrique Peña-Nieto was able to capitalize? Doubtlessly, Peña capitalized on the notion that the country used to work well (under PRI management), that things were working out and that afterward (who knows when or why) they stopped working (under PAN), and snowballed to the point of becoming an revealed truth, comparable only with the observation of a former PRI governor in the sense that “we may be corrupt but we know how to govern”.

In a less praiseworthy or benign take, Robert Conquest, one of the greatest historians of the Soviet Union, affirmed that “one of the most difficult things to convey to a young audience is how disgusting the rank and file of the old Soviet ruling class really were –how mean, treacherous, shamelessly lying, cowardly, sycophantic, ignorant”. Which PRI returns, the one that constructed the scaffolding of a modern country or the one that milked it until nearly finishing it off?

What I have no doubt about is that there is indeed a PRIist gene and that this is more penetrating and omnipresent that it is recognized. My impression is that there are two possible explanations: one is that, in effect, it is a cultural phenomenon that underlies everything else. Some scholars from past decades attested to that the PRI had achieved capturing the nature of the Mexican and had converted it into its own raison d’être: that is, that the PRI and the Mexican were one and the same. I tend to have doubts about this way of seeing things because, for example, if one reads the press of the first PRI decades, until the end of the forties, the country was much freer in terms of written expression than it was in the following decades. Media censorship began in the fifties and worsened until it began to subside, but it only disappeared with the defeat of that party in 2000.

From this perspective, it’s not so much that the PRI has mimicked the nature of the Mexican, but rather that it possessed an extraordinary capacity to construct an entire history and culture that the Mexican adopted (by whatever method it was). Thence the official truth and the sole truth that very few dared to doubt. Thus the importance of the official (and only) text book for school children and control of the media. An Interior Minister of that era once observed that “in Mexico anything can be thought, some things can be said and very few may be written”. Anything to maintain control –and the myth.

The other explanation for the phenomenon is perhaps more pedestrian but no less significant: despite the alternation of parties in government, the old PRI system remained intact, was never reformed nor did a new regime ever come to life, meaning by this a new institutional structure that would redefine the relations among the branches of government and among the political parties, that would confer real power on the citizenry and that would guarantee accountability by civil servants. The system stayed the same, except that the president stopped being so powerful when the PRI ceased being an integral component, a permanent component, of the presidential political apparatus. However, given the absence of a true institutional reconstruction, the result of this “divorce” was a dysfunctional system of government, a weak president and a very poor governmental performance. Beyond the individuals, the persistence of the old system under inexpert administrators produced poor results.

Maybe the first conclusion of these disquisitions is that democracy has not penetrated the institutional structures and the culture of the Mexican and that, what the citizen craves is an effective government that makes things work. Without disdaining their achievements in matters of transparency, availability of mortgages and the fight against organized crime, the PAN Presidents didn’t change the political system nor did they strengthen their historical base and its raison d’etre: the citizenry. They maintained economic stability, but they did not resolve the problem of competition in the economy –above all in energy and communications- and they did not change the direction of the country for the better. In addition to this, they were highly incompetent and limited governments, but they surely did adopt many of the PRIist vices.

In view of this, the rational thing for a voter was to move toward an administration that offered the same but with a proven record of delivering. That is, it’s not so much that the PRIist culture continues to be so dominant, but rather that the Mexican simply wants an effective government. That’s what Peña promised and that’s what apparently swayed the electorate. Peña’s first steps have shown unusual pragmatism that contrasts with the dogma of his opponents. Time will tell.

There are two similar cases in recent global history that afford us a comparative perspective: Russia and Nicaragua. In both cases the dominant party lost power but eventually ended up returning for similar reasons: because the people wanted order and assurance concerning the future. It’s not that the Russians wanted to return to Stalinism or that the Nicaraguans missed the Sandinistas, but that the interim governments turned out to be more benign in terms of freedoms, but so incompetent that they ended up tiring everyone out.  Perhaps the explanation for Mexico is no more complicated than that. But the unrelenting question is whether Mexicans will suffer from the privations of freedom, controlled media or systematic attempts of imposition that have characterized those two regimes.

If it’s an effective government that the Mexican wants, then that’s what he or she will surely get. Will the efficacy be accompanied by all that Robert Conquest summed up so well: form above substance, control above rights, the steamroller above the freedoms? Overriding Talleyrand, will the new administration demonstrate that the PRIistsdid learn something from their past?

 

www.cidac.org

@lrubiof

Polls

Polls were a leading figure in the past presidential election. However, instead of being an instrument of measurement and a source of trust in the results, they acquired an unusual and highly destructive transcendence. They ended up being means that manipulated the election and impeded conferring certainty on it. In the light of this, it is evident that calls will be issued to regulate the service. I beg to differ: what are missing are opening, transparency and competition.

Is it possible to manipulate an election with polls? According to the Dictionary of the Royal Spanish Academy, to manipulate means “to intervene with clever and, at times underhanded, means in politics, in the marketplace, in information with distortion of the truth or justice, and at the service of special interests”. The key element of this definition is the conscious seeking of a determined objective: to distort. The evident question is whether it is possible to utilize polls to manipulate the voter. According to Edward L. Bernays, an expert in propaganda, “the conscious and intelligent manipulation of the habits and opinions of the masses is an important element in democratic society”. In other words, this is an exceedingly subtle issue in which the crucial factor lies in the objective: if this is about intentionally distorting the information, we find ourselves before a case of manipulation; however, if it concerns attempting to exert an influence on habits and opinions, it does not. The main point is not, therefore, whether the polls influence the voters’ behavior, but rather whether they were utilized consciously and deliberately by those who produced or published the polls with the express objective of altering or inducing perceptions among the citizens.

There are two key issues here: the difference between the last pollspublished before the election (there is a five day ban prior to election day) and the final result; and the manipulation that the polls may have been used for. These are distinct themes that merit a differentiated analysis because they are not the same.

One great myth of the election resides in the assumption that the margin of advantage of the leading candidate with which the process initiated would be maintained until the end. Anyone who has observed elections around the world knows that elections always narrow, generally between two contenders. The exceptions to this rule have perfectly obvious explanations. One exception was the election, in the second round, between Jacques Chirac and Jean-Marie Le Pen in France in 2002. Instead of the traditional Left-Right confrontation, the election ended up being between the Right and the Extreme Right, which led to the Left voting for the Right. Chirac swept through with more than 80% of the vote. Another similar case was that of Eruviel Ávila in the State of Mexico a year ago: there the PAN as well as the PRD were over-confident, supposing that the PRI would nominate someone within the close circle of the then Governor Peña-Nieto and thus they did not construct a candidacy of their own. In fact, they essentially bet that Eruviel himself could be the candidate of an opposition alliance. The result was not as overwhelming as that of Chirac, but nearly.

All elections close in the end and many of the polls do not achieve capturing the evolution that these register in the voter in the last days prior to the election. This year’s election ended up defining itself by the anti-PRI vs. the anti-López-Obrador vote and this led to the PAN’s falling much below what the polls had said: this is a typical pattern and has nothing to do with any manipulation. The voters adjust their preferences according to their wishes but also according to their fears, factors that clearly modified the final results with respect to the last polls published before they were legally banned.

Much more complicated than this is the issue of the allegedmanipulation. In Mexico there are many types of polls, many financed by parties and candidates, which are published as if they were a science, when on many occasions they reflect sampling frameworks constructed ex profesoto promote their clients. Others simply reflect the lesser quality and technical skill of the pollsters. The way that the pollsters treat the undecided and non-responders has great influence on the way the results are presented. The point is that the diversity of availablepolls makes it easy to see them as similar and comparable, when in reality many clearly are not. That is, some constitute expressly designed attempts to manipulate the voter.

The great novelty of this presidential race was the appearance of a daily poll, something that had never been present before in Mexico and that, as far as I know, does not exist elsewhere in the world. A daily poll that shows as many as eight-percentage-point shifts in just one day is immediately suspicious. The poll can be technically impeccable, but its appearance every single day lends itself to all kinds of interpretations. Worse still when the way of presenting the daily news in the same newspaper and, on some cases, the opinions of their columnists, coincides with the poll’s results, all of which generates an inevitable sensation that there is something fishy behind it and undivulged connections between one and the other.

The question is what to do about this. It is impossible to determine whether there was an express attempt to employ the polls as a means of manipulation. However, the issue is quite serious in a country that has yet to achieve the basic elements of the democratic process, i.e., recognition of the election result, which is why the theme will inexorably return to the political discussion.

In the face of this, I anticipate that the typical summons will be issued to prohibit or regulate polls, sanction the media that publishes these or, in whatever case, continue deepening the prohibitionist regime that is so harmful for the development of a democratic country. And worse still because nothing would be achieved, as has been demonstrated in the case of the campaign finances.

Another answer, very distinct, would consist of obliging the pollsters to publish their historical record, that is, to make public in each poll the comparison between their predictions in previous elections and the final result. The electoral authority could emulate the way in which the consumer is warned by the health authorities about cancer in cigarette boxes with a clear and unmistakable label with a caption such as “this poll was off by X number of points in the last election”. With these data, the voter would have the necessary information to be able to discriminate between the polling professionals and crass connivers.

There is no perfect solution but the degree of conflict that Mexico is experiencing compels us to think of creative means that will lend certainty to the process. Competition is the only possible solution and this entails opening and transparency. This would also helpto advance toward electoral processes that are completely legitimate, exposing the charlatans and professional string pullers.

www.cidac.org

@lrubiof

Hangover: Mexico vs. USA

Alice in Wonderland, the novel by Lewis Carroll, was written by a professor who also wrote a book on symbolic logic. So it is not surprising that Alice encountered not only strange behavior in Wonderland, but also strange and illogical reasoning –of a sort too often found in the real world and of which a logician would be very much aware. In this context I ask myself what would happen if Alice were to visit the world of interpretations that today characterize Mexico’s politics: because not all are as logical as they seem.

A good example of schizophrenia is the contrast between the two nations: in Mexico as well as in the U.S. there’s talk of great political polarization and of a dysfunctional government. But the causes are not the same and the comparison is enlightening.

To begin with, the presidential system, which we adopted from the Americans, was designed to make any change difficult. Its structure was conceived of by the authors of The Federalist Papers as a system tailored to avoid the excesses and abuses of one branch over another. This fact has led many scholars and opinion pundits to conclude that the parliamentary system –designed to be flexible and to adapt with ease to the winds of change- is superior in terms of quality of government. The reality is that these are systems with very distinct logical dynamics. As Ferdinand LaSalle stated in his famous book on constitutions, each constitution reflects the concrete political reality, each system is in a dead heat with its society. The Americans did not construct a democracy but rather a republic because they wished to avoid potential abuses by private interests or the masses. That is what Mexico adopted in 1824 and thenceforth.

The discussion in the U.S., not very different from ours, boils down to: why its system worked before and doesn’t any more. The main similarity lies in the polarization that characterizes the two societies and that, despite manifesting itself in very different ways, has the effect of paralyzing legislative decision-making. The parallels are overwhelming. But the reality is less so.

Two likenesses explain the American reality. On the one hand, if one analyzes the opinion polls, far from being characterized by great polarization the citizenry of that nation experiences a normal distribution, as the statisticians would say, in which the majority is concentrated in the center and a few are polarized at the extremes. That is, the society is not undergoing any polarization, at least not extreme. If the society isn’t, why are there such a flap in the media and such paralysis in Congress?

There are two explanations or hypotheses for the phenomenon. One argues that President Obama’s management has been very ideological and that has generated enormous reaction. Those sustaining this position exemplify it with how the economic stimulus package was implemented, that it did not focus on areas of great economic impact, or with his decision not to accept the Simpson-Bowles Commission’s budgetary recommendations. According to this rationale, the Tea Party Movement, which produceda legislative majority to the Republicans in 2010, was none other than a reaction of the society to Obama. That is, the polarization is caused by what Obama has done.

The other explanation is of a structural nature. According to this view, the polarization derives from the way the legislative districts are assigned and that, thanks to gerrymandering, from the eighties, has exacerbated. Each state is distinct but, typically, it is the state legislatures that define the districts and every ten years, in response to the Census, these are reconstituted. A district in Georgia is 69 miles long and on occasion not more than a few meters wide, all this to ensure that a certain party remains there permanently. This logic has propitiated growing extremism from the right as well as from the left. The best proof of the latter is that this year new districts begin to function, the product of population changes registered in the 2010 Census: a powerful (and for some extremist) congressperson from Massachusetts, Barney Frank, decided not to seek reelection because his district was modified and he was not certain of winning. The system rewards extremism or, expressed in other terms, the source of polarization in the U.S. has to do with the manner in which electoral districts are assigned and not with a fundamental change in the reality of its society.

The great difference between the U.S. and Mexico resides in the strength of their institutions. Although the U.S. Congress is polarized, presidents come and go and the system endures come what may. The checks and balances are so solid that they impede abuse on the part of any individual. The price paid for this is that it is difficult to carry out relevant changes but, it could be said, that comprises the ultimate objective of its system.

On Mexico’s case the situation is very distinct. There the problem could be resolved with a redesign of the rules that determine the Congressional composition. In Mexico the problem is that there is no arrangement on how political power should be organized and distributed. There it’s a problem of structure; here it’s one of essence. There it could be corrected with a legislative decision; here what’s required is an institutional construction that resolves the problem from the beginning. These are very distinct orders of magnitude.

Mexico has a post-dictatorship hangover: years of excesses without institutional development. Different from the U.S., Mexico requires an enormous exercise of political interaction that joins together efforts for and submits ambitions to a common project. In the U.S. all they have to do is agree on something functional: their hangover is one night, Mexico’s is one of two centuries. With this I don’t mean to suggest that it’s easy there and difficult here: in fact, both entail an enormous challenge. What’s relevant is that the task awaiting us Mexicans is that of constructing the foundations of a functional political system and this implies the capacity and disposition for uniting wills, abandoning all-or-nothing positions and constructing a new arrangement of power.

The mission for Mexicans is one of transformation, not of continuity or retrospective. Whoever claims something distinct in not living in the real world. And what is in the wings can be nothing other than violent if it implies returning to the past, or intense if it implies moving on toward the future. Neither will be pleasant.

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@lrubiof

Past and Future

I seemed to be seeing the past and the future galloping head to head without end. A recent visit to India made me realize the so very dramatic contrast between two social and political realities that lie behind contrasting economic results. India and Mexico show that it is not only economic policy that determines growth: perhaps as important, if not more, is the recognition or social rejection to the creation of wealth.

 

Mexico resolved many essential issues of infrastructure many decades ago and, nevertheless, got stuck along the way. The grand highway construction and electrification programs began in the last century during the thirties. In India, these have been an issue of the last twenty years. While it is rare for a Mexican town not to have electricity and even telephone service, in India this was the norm until only two decades ago. Independently of the manner in which one wishes to evaluate the success of Mexican development programs, I have no doubt but that during the last century there was a clear attempt to take infrastructure to the remotest nook and cranny.

 

In India, the extreme poverty that characterizes the society (which only a few years ago had a per capita income less than 10% of Mexico’s) was the product of a failed strategy inspired by Soviet socialism. As soon as it started to free itself from those ideological and bureaucratic bonds, its economy began to grow in a sustained and accelerated fashion. In only twenty years, India achieved quadrupling its GDP per capita.

 

Today India confronts the type of dilemma that has plagued our process of development in the last several years, but it finds itself with a much better capacity to deal with these. Although attacking essential problems such as poverty is difficult in all nations, it is infinitely easier within the context of an economy that expands, because that fact alone generates favorable conditions. But perhaps the great difference between India and Mexico does not reside in the economy itself, but in the attitude of its people: even in the midst of crushing and lacerating poverty, Indians maintain a “can do” attitude rather than a “why it can’t be done” one.

 

For a population that had never before known economic opportunities, the priority is to generate income and an environment of accelerated growth produces one opportunity after another. Despite the lack of government programs devoted to attending to problems of poverty and economic informality, the population acts: its incentive is to break the vicious circle in which it lives and its responses are not foreign to us: those who can, send their children to the best school, not to the one that corresponds to them; what’s important is to generate activity, which Indians seek until they find it, an attitude that has procreated millions of small businesses in all ambits. Some of these grow, others disappear, but living standards rise one family at a time.

 

An Indian university professor mentions that the most popular language is not English, but “Windows”, because that’s how many perceive their ticket to ride toward the future. For those who have had access to the technical schools that proliferate throughout the country, a degree in Engineering changes life in a millisecond. India illustrates how a regulatory framework that propitiates entrepreneurial activity (by design or by default) can be unbeatable. In this respect, China and India are contrasting in that they have followed models of development that emanate from their very distinct social as well as political characteristics.

 

A sharp observer of India explained that comparisons between India and China were logical but not very useful. These are two nations that share a region of the world, but radically opposite circumstances and characteristics. The only thing that they appear to have in common is that, after a long period of paralysis, they suddenly woke up, becoming important economic growth engines. In China everything is order, in India disorder; both believe in celerity, but their sources of growth are very distinct: in China there is much foreign investment and big local enterprises, essentially governmental; in India there is an enormous and vigorous entrepreneurial class and a government that, over recent decades, has withdrawn and favored the development of self-starters at all levels. The disorder in India reflects a democratic system that is complex in the extreme, which is in contrast with the order emanating from an authoritarian government in China.

 

Returning to Mexico, it seems to me that the main lesson shown by the transformation in India of recent decades is that the key does not dwell on having a perfect regulatory framework, with all of the reforms that would be desirable or with a hyper competent government, though all that would obviously makes success more likely. What’s critical is to have an environment that makes economic growth possible. What appears to enliven the success of this Asian nation has more to do with the milieu of freedoms, a contentious political system that generates checks and balances, and above all, social appreciation of the economic boom and of personal enrichment. When individuals identify success with enrichment, their incentive for investing, assuming risks, and viewing the future with optimism ends up being irrepressible.

 

In Mexico we lost our way at the beginning of the seventies in the past century (fifty years ago!) and, however numerous the significant advances have been, our disputes are not about how to govern us better or how to promote growth, but rather how to come into power and stay there. Compared with India, we have everything to be successful, and we had it many decades before they could even have imagined it. This makes one think that the great difference between the economically successful years of the 20th Century (1940-1970) and the present has less to do with the specific economic strategy than with the legitimacy that the society grants to those responsible for generating wealth.

 

Nations that during the last several years became emblematic in economic terms follow development strategies that are so dissimilar that it is impossible to attribute success to a single factor: more or less investment or expenditures, the existence (or absence) of a strategy against poverty or the exact nature of private-sector participation. All these obviously matter. But China, India, South Africa, Indonesia, Brazil, and other nations that have grown at a brisk pace do not share any common economic strategy: each of these nations follows its own rationality. Each has achieved high growth rates thanks to a significant political change.

 

A long time ago Aesop said that “Men often applaud imitations and hiss the real thing”. It seems that he understood our dilemmas better than we do.

 

www.cidac.org

@lrubiof

Europe in Mexico

The budget, said Schumpeter, is “the state stripped of ideological pretensions”. True to this principle, in Mexico public budgets serve private interests. Only a new federal-fiscal pact would correct this.

Today’s budgets are not like those in the past. Until the mid-nineties, the federal government decided how to collect and how to distribute and spend public funds. At present, tax collection continues to be essentially federal, but government spending is mainly in charge of the states and municipalities. This creates perverse incentives and begs the question: Are we precipitating a European-style crisis?

Although the European crisis features many dimensions, its heart lies in a fundamental problem that Alexander Hamilton had already anticipated 200 years ago: there can be an alliance among sovereign entities, or there can be a government that governs the citizens of these sovereign entities. What there can’t be, said the Secretary of the Treasury of the then-nascent American Union, is the “monster of a government of governments”. In financial terms, the latter model implies that there is no built-in mechanism that supplies funds to pay the debts that these governments incur.

In Europe, every country has its government that collects taxes and spends these, but 17 dissimilar nations share a common currency. Each country has conducted its affairs to the best of its understanding.Thus, while Germany dramatically increased its levels of productivity in the last decade, Italy fell in arrears. In a world of independent currencies,Italy would have ended up devaluating its currency to compensate for these differences. However, thanks to the existence of the euro, the common exchange medium, Italy cannot resolve its situation by means of devaluation. In addition, through a decision of the Bank for International Settlements (BIS, the central bank for central banks), all debts of euro-zone countries were considered sovereign (guaranteed by their governments), therefore risk-free. This decision, more political than economic, led to European banks cheerfully lending without building up reserves were someone not be able to pay them.

Is this situation akin to Mexico’s? Uses and abuses of public funds here are legendary. In Mexico no one is surprised when a governor utilizes public treasury monies to upgrade his image or that public funds are dispensed in the most awkward ways without anybody blushing. Although governors cannot print their own money, recent experience (e.g., Coahuila) shows that through deceit and the manipulation of information, a state government can get itself into unlimited debt, something similar to having their own currency.

The use and distribution of public funds is serious to the extreme. To begin with, perhaps one of the main reasons that public spending in Mexico has very little capacity to stimulate economic growth pertains to its peculiar fiscal system.

The federation collects and the states spend. Given the political power that governors have accumulated in recent years, their expenses are taboo, and, for all practical purposes, they are not accountable to anyone. From an economic perspective, many, perhaps the majority of projects promoted by governors, have little impact because their logic is frequently more political and electoral than economic. Of course they build roads and other services, but not necessarily those that generate the greatest economic impact.

Without the desire of proposingto return to the centralized system of the 1950s and 1960s, it is important to understand the difference. During that era, the Mexican Ministry of Finance had enormous “pots” of money that it devoted to development projects. With a small army of economists, the Ministry evaluated the cost-benefit of each project to determine the highest multiplier effect. In this manner, one year they allocated these money pots to electrification of the Southeast and another to constructing Cancún or the highway to Querétaro. The basic objective was to achieve a high rate of economic growth.

The current rationale of the governors is very distinct. Above all, they conceive of themselves as future presidents and view the expenditure as a personal marketing tool. Second, even among those more modest in their individualpretensions, few have a team with the analytical capacity to determine the most salubrious use of the expenditure. In addition, the “money pot” aggregated at the federal level is not the same as 32 disperse state budgets.

To all this we must add the “European element”: the governors do not collect taxes, they only spend. This is more convenient for them, but terrifying for the growth of the economy. This scheme denies the right to the citizenry to upbraid the governor: their faculty of exacting accountability. The governor is delighted for the money to be collected from afar, thus having no need to explain anything to the local citizenry. But the consequence is that the country has lost economic dynamism in good measure due to the current distorted fiscal system.

Facing forward, one of the principal priorities must be the fiscal structure of the country. The phenomenon retains many rough edges and one cannot be resolved without the others being affected. Today, a significant part of the federal budget is financed with oil money, the latter ending up in the states with no control or planning. The citizenry is not of a mind to pay more taxes, at least partly because it is well aware of how these funds are spent.

Inevitably, if we want to recover the growth capacity of the economy, we will have to construct a new fiscal structure in such a way that the taxes collectedmatch with federal- and well as with state-level expenses. The federal government will be required to free up significant resources to Pemex for the company’s growth, and state and municipal governments will have to collect taxes at the local level, above all property taxes. Such a change in the rules will demand extraordinary political capital.

At the same time, with respect to tax collection, changes such as these will only be possible inasmuch as the citizenry observes a new power relationship with its governments at all levels. In these times better tax collection is impossible without improving the use of the money and performing responsible checks and balances thereupon. This is the quandary of our fiscal reality at present.

Power in Mexican society has been decentralized in such a way that it has generated more veto capacity than creative opportunities. The solution does not reside in an impossible recentralization of power but rather in a new federal equilibrium: a novel political arrangement between the federation and the states and municipalities that incorporates rules and incentives for public monies to join forces in a sole objective: to generate greater economic growth.

 

www.cidac.org

@lrubiof

 

Distrustful

“The Prince”, wrote Machiavelli, “ought to be slow to believe and to act, nor should he himself show fear, but proceed in a temperate manner with prudence and humanity, so that too much confidence may not make him incautious and too much distrust render him intolerable”. President Calderón is a decent, responsible, and serious person who has presided over a government in turbulent times without a clear sense of direction and with an enfeebled team. An old saying suggests that difficult times generate natural leaders; unfortunately for Mexico, this was not the case.

This six-year term of office began with turbulence and is ending in disorderly and even chaotic fashion. We owe Felipe Calderón for having impeded the destructive threat represented by a return to populism, but his government did not have clear objectives, a sense of direction or a well-thought strategy. Combating organized crime, a praiseworthy objective, is not a substitute for strategy nor can it be the cause of a government. Despite this, this presidential term concentrated on a sole objective at the cost of all others. The result is that the country finds itself reeling and, once more, expecting someone who is at least not worse. His failure can be gauged by the fact that the election was about those against the PRI versus those that were against Lopez Obrador. Calderondidn’tevenexist.

The decisive factor of the term has been the personality of the president himself: distrustful, obsessed with the PRI, incapable of recruiting professional personnel, he was content with a fundamentally mediocre –but supposedly loyal- team that little by little displaced –and inflicted harm on- the few public officials who excelled in capacity, as well as those who came aboard his project from outside the PAN sphere. Certain of understanding the Mexican with clairvoyance, he devoted himself to imitating, perhaps unconsciously, an old version of the PRIistpresidentialism, privileging the cult of personality above his administration’s performance. In the final analysis, his conduct was that of a PRIist but without the ability (and malice) of the latter and without leaving the nation in better conditions than those in which he found it.

If one characteristic defined the administration it was, indubitably, distrust, and at an overwhelming cost: he alienated his counterparts; he made it impossible to negotiate relevant legislative reforms; it meant the presence of opaque and incompetent functionaries; and was always characterized by a sick obsession to make everything and anything necessary in order to avoid the PRI’s winning the Presidencywhich, as he demonstrated this week, is his real nature. In this search, he undermined his own team, reigned despotic over his own party, ventured into alliances without rhyme or reason and, one by one, destroyed every vestige of an institutional order. Distrust of some translated into immoderate confidence in others who did not justify this with their capacity or maturity. His lack of understanding of power prompted him to be very decisive in some themes (above all those related with narcotrafficking) but detached and distant in others.

As occurs with all gamblers, President Calderón ended up with a bad deck. He associated himself with corrupt union leaders who never made good on their promises; he privileged conflict, rather than cooperation, with his only possible legislative ally; turned a blind eye to opportunities in fronts distinct from security –such as education, judiciary reform, and foreign policy-; and finally left in his wake unprecedented levels of violence and insecurity without a shimmer of resolution. In a word, he bet and lost.

Organized crime did not come into being with President Calderón. Rather, as a responsible person, he understood the magnitude of the challenge to the State represented by the criminal organizations and forged full steam ahead to combat these. His strategy can be arguable, but the fact of fighting such a brutal enemy is indisputable. The problem is that the strategy adopted has consequences and, on not having convinced the population of its need and potential benefits and on not having won their support from the start, when the violence began to ascend and the impact of criminality jarred Mexican families, the President was left with nothing.

Now that the sunset of his term approaches, the President continues to persist in his own obsessions, abandoning the historical legacy of the PAN comprised of the causes of the citizenry. Worse yet, paradox of paradoxes, as concerned of a PRI triumph as he was, he abandoned his party’s candidate and failed to construct an institutional and economic scaffolding to contribute to a more favorable electoral result. Instead of being a factor of unity, conciliation, and institutionality, the President has inclined toward conflict and animadversion. Instead of striving for his party to win the presidential race, he ended with the scenario that most obsessed him.

One PRI ex-governor says that it would be detrimental if his colleagues and those of the PRD were to underestimate the destructive capacity of Felipe Calderón when he persists in advancing his objectives, even if he leaves nothing after the fray. Given the election result, he placed himself in the worst possible position: as the example of what a president ought not to be and, thus, as the likely whipping boy of the incoming administration: to show a stark contrast. He bet against the PRI but did nothing to avert its victory. Calderon will end up as the PANist who made PRI’s return possible, as the reason for its recovery.

Presidents assume their mandate certain of possessing a universe of time to organize and transform the country. However, as their term advances, time runs out and very soon they find themselves in the home stretch. From the beginning and up to this moment, they try everything that occurs to them and some of these come out well. But when the final moment arrives, there is no longer any possibility of attempting new things. Time runs out and the typical question concerning the president’s legacy becomes irrelevant. The only thing left is to try to avoid a crisis and to come out as unscathed as possible.

His government’s liabilities are well known and it is not necessary to go into these here. But there are also assets that have not been exploited in good measure because all of attention has been focused on unachievable objectives. Instead of the antagonisms that tend to characterize him and that could easily turn him into the laughing stock of the next administration, it would be better for him to strengthen the assets that he did create, explaining the logic and strategy of the fight against organized crime and constructing agreements for the protection of the army.

Obsession, noted Norman Mailer, is the single most wasteful human activity. Obsessions with achieving something not in his power are futile and, worse yet, fraught with danger. Felipe Calderón ends like he started: without a project, without a party and without direction. The only thing that remains is to trust that the next administration thinks more about the future rather than attempting to rebuild the past because only then will he have something to be remembered by with bonhomie. Buttrustingisnot his thing.

www.cidac.org

@lrubiof

The Peña Phenomenon

“Be careful what you wish for”, goes the old adage, “because it may come true”. The electorate as well as the new president-elect should meditate in these terms. The victory of Enrique Peña-Nieto was impeccable and indisputable. Viewed in retrospect, this electoral contest was a new watershed, similar to 2000. Now comes the good part.

The electoral result has two faces: what the electorate demanded, and what Peña supplied. Both reveal a changed country.

On the part of the citizenry it is evident that there is weariness. Decades of crisis followed by more of disorder, the absence of leadership and economic stagnation ended up ruining the expectations that the solution would be via the route of a divided government, incomplete democracy, or a bunch of incompetent governments. The last three administrations, free as they were from financial crises, were mediocre and ended up not satisfying anyone. Peña understood that the electorate wanted an effective government and that’s what he promised.

The majority of the problems that the country is currently experiencing are the residues of the PRIist era that has not been overcome and that translated into violence, institutional weakness, bureaucratic abuse and a pathetic system of government. The PANist governments proved unable to change the country: they neither built democratic institutions nor did they distinguish themselves for the quality of their administration.  But the problems are still there.

Although the final result did not bring about a “full cart” (i.e. control of both legislative houses and the presidency) that some polls anticipated, the changed landscape is nonetheless amazing. The PRI candidate clearly won. The PAN candidate gave a lesson of democracy and integrity up to now absent in the country’s brief democratic history. And the PRD candidate behaved, well, as always: Facundo Cabral would be delighting himself.

The winning candidate prepared himself for years. Peña organized a team, conceived of his term as governor as a showcase for this campaign, planned every step of the construction of his candidacy and developed an impeccable political operation. Instead of wasting time attacking the federal government, he devoted himself to organizing the PRIists, coaxing the dissenters on board and eliminating all competition. He foresaw attacks on his weaknesses by making them public, propitiating the printing of books that justified him, and threatening, albeit in roundabout fashion, those who opposed him. He associated himself with the Mexican multimedia mass media company Televisa to become the sole positive public figure for six years and undermined his potential rivals by attracting and buying leading figures of the Left and the PAN, notably Fox. Peña left nothing to fate.

The campaign proceeded like a perfectly well-oiled and -financed machine driven like a bulldozer. As IvonneMelgar wrote recently, he anticipated diverse scenarios and groomed a team skillful in image management and in immediate response to and care of even the most trivial contingency, by any means possible. In view of this, none of his contenders, however capable, attractive or organized they might have been, had any chance at all. The numbers show this to be so from day one.

Now come the consequences.

Peña did not receive a blank check but a halo of legitimacy. Instead of the risk that an absolute legislative majority entailed –for him and for the country- the electoral outcome will force him to forge agreements and build a legislative majority with opposition parties. The political talent that he showed during the campaign suggests that he has everything going to accomplish that. Also, the moments and circumstances in which he found himself in a predicament during the campaign (as with at the Ibero) illustrate the kind of problems he is likely to face when facing unpredictable scenarios.

It is to be expected that in the upcoming months we will see many adjustments and disadjustments. The underground war between the “center” and the state governors has just begun. Different from the thirties, the latter do not have armies at their fingertips, but no one will give up their privileges without a struggle. The notion that the PRI-Presidency nuptials can simply be restored as if nothing happened in the past decade is simply ludicrous.  When a similar situation was encountered in Poland, the return of the Communist Party, Lech Walesa affirmed that “making fish soup from an aquarium is not the same as making an aquarium from fish soup”. A similar situation will come about with PRI: Peña’s opportunity is immense.

Soon the de facto powers will rear their heads, some to make their weight felt and to establish limits for the new government, other to cash in on campaign favors. The response that they receive, and the manner of that response, will earmark the tenor and nature of the incoming government. The temptation to centralize and impose order will be strong. The example of the State of Mexico, of which he was governor and where nothing moves without the governor’s consent is suggestive.

For Peña the dilemma is to come face to face with recovering what has been lost and to rebuild PRIist hegemony –as well as he can-, or to devote himself to constructing a modern country, which would imply exactly the opposite: abandoning the old PRI once and for all. This would imply achieving precisely what the PANist governments were timorous about and incapable of articulating. The party -PAN or PRD- that first succeeds in organizing itself to negotiate a legislative coalition will be crucial and will determine the nature of the economic policy and thus the potential for transformation of the country. I have no doubt that there will be ad-hoc legislative coalitions. The question is with whom.

A modern country entails, above all, a structure of checks and balances that confers stability and strong institutions on the country and the government. Since 1997, when the PRI lost legislative majority, the country has experienced the checks, but never proper counterweights. That is, diverse private interests (above all the so-called de facto powers, but also the Congress), have achieved blocking and impeding reforms, the elimination of obstacles to economic growth and other means to turn around a country that is ripe for transformation. What there have not been are balances: that is, the means to strengthen the government’s capacity to act for the benefit of the citizenship, marginalizing restrictions imposed by special interests.

The good news of not enjoying a legislative majority is that this makes it irrelevant whether the new government will want to construct a modern country. The bad news is that such a possibility will depend on the quality of the opposition with which he has to work: the opportunity, and responsibility, of the opposition parties to forge a coalition to modernize the country is extraordinary. The paradox is that all that power can be used to advance but also to retreat. Mexican society is avid for answers and for a future. Peña has the opportunity to respond at the tip of his hand. The question is whether he’ll be able to defeat PRI in order to achieve it.

www.cidac.org

@lrubiof

Past or Future

For Bismarck, the great German chancellor, politicians“never lie as much as before elections, during a war, and after a hunt”. The citizen’s task on an election day such as today is to elucidate among the poses, proposals, images and… lies. Anything goes in an election and the one that ends today was no exception. Now is the time for citizen responsibility.

 

The candidates did their job and today it’s the citizen’s turn to choose. Like six years ago, over the past several days there have been attempts to generate an ambience of disqualification of the electoral processes. Different from then, today the surveys show very distinct numbers that confer greater assurance on the democratic exercise. The two candidates in the lead do not put economic stability at play as was done previously. The advance on this front is solid and the threat of regression in economic matters has receded to such a degree that it did not comprise a relevant theme in the election.

 

Today the tessitura is distinct: it is lodged between the past and the future: reconstruct what worked before or construct a distinct platform oriented toward the future. The reality is that despite the democratic advances that have in effect been made, we are far from living under a consolidated democratic regime. The politicians did not fulfill their responsibility of constructing institutions that, on affording solidity and predictability to decision-making processes, would eliminate the risk of instability that always accompanies moments of political transition. With our votes, the citizens now have to force the politicians to construct the key institutions that are necessary for the development, stability and rapid growth of the economy.

 

Of the three main contending candidates that present themselves today before the electorate, one has not ceased to exert a threat in terms of rejectingthe results on election day and another represents a contingency that aspires to regain power and never let go of it again. Both are emblematic of the immaturity that continues to characterize our political reality. In consolidated democracies what is in dispute is a small change of focus that places in doubt neither the population’s daily lives nor the country’s stability. Regrettably, everyday debates among Mexicans during recent weeks reveal that we are far from having reached the point at which that the latter would be true. The very fact that stability (or the risk of the return of the PRI) is a topic of discussion is telling in itself.

 

In the face of this, the citizenry must choose the best option, or combination of options, which casts certainty on the future. The case of the economy is illustrative: although this has improved systematically over the past years (in fact, 2011 was the year of the greatest job creation in our entire history), disputes prevail concerning the course that this should follow. In the proposals heard throughout the campaigns one candidate idealized the past, another proposed a return to what worked before and yet another offered an approach for tackling the future. That is, despite that Mexico is basking in one the best circumstances of economic matters in the world at this moment, effervescence runs high.

 

Behind many of the proposals the idea is found, very deep-rooted in two of the parties, that it is possible to reconstruct distinct moments of our history (above all the sixties or the seventies, respectively) instead of facing up to the challenge represented by the complex world we live in. A better alternative would be to make the wave of change that has characterized the world in this half century our own: to really take hold of it and break with the obstacles that this so very polarized and contrasting economy has generated in which one part grows rapidly while the other languishes without course nor opportunity. The apparent differences may appear to be small, but thisconcerns a radical difference in focus and vision. The question is how to make certain that the country advances towards the consolidation of a platform of growth with equal opportunity to all. The vote is a limited, albeit exceptional, instrument for that.

 

The dilemma in today’s elections resides in the what for of the government and what this implies for the future of the country. The difference lies in the attempt to reconstruct that idyllic past or to sever from, once and for all, the impediments to growth that persist, many of these engendered in that idyllic world of many decades ago that, as Cervantes said so well, was never such.

I, for one, have no doubt whatsoever: Mexico must look ahead, leaving the past in the history books. The key to the future does not reside in restoring but rather in liberating and in providing the citizenry –the individual, the entrepreneur, the worker- with instruments for competing in a globalized world in which the capacity for adding value is determined by the quality of education (and the nature of this), the functionality of the physical and human infrastructure and the links with the rest of the world. The citizen today has the opportunity and the responsibility of constructing with his or her vote their votes the equilibriums that best contribute to achieving this: a different party in the presidency and in the legislature

In decades past, Mexico abandoned the introspective economic model because the latter had ceased to be viable. Today we begin to see the results of decades of transformation and, for the first time in a long time, the future appears exceedingly promising. This is the moment to take the great leap forward toward the future.

It goes without saying that Mexico needs a competent government dedicated to building the political and structural conditions so that the economy can prosper at a much higher clip than we’ve experienced lately. Mexicans also need limited government, properly constrained by checks and balances, that avoids and hinders excess and abuse or backtracking, given that the immature democracy that today exists make that feasible. Mexico has to take the last stride: to construct the platform of a modern nation in the context of freedom, in which the creativity of the people can thrive in the form of entrepreneurial activity to which all have access.

The choice in this election is very clear: return to what was and that did not work, or take the great leap, but with clear governmental stewardship, toward the change that did not gel in the final analysis of this last decade but that is necessary and, to a great extent, unstoppable. Each and every voter will have to determine the best combination of votes that would make politicians act.

I have already stated my preference of candidate in a previous article, as well as of formula: president and congress of different parties. The task of the voter today is to make a decision and go cast a vote for the candidate that can resolutely advance –and will have no choice but to do so- in this direction and to create conditions that make a different future possible. Responsibility for the result will be all his.

 

www.cidac.org

@lrubiof

The Future and The PRI

“Sometimes in error, but never in doubt” is a characterization that could be easily applied to the PRI. The “Party of the Revolution” stabilized the country after the revolutionary era but never achieved overcoming its original sin, a system devoted fully and exclusively to the interests of the so-called revolutionary family:to control power and to advance their business dealings. The risk of this election dwells in going back to that world of complacency. Mexico clearly requires an effective government and the way in which both of the PANist governments that succeeded the PRI defeat in 2000 evolved was everything except effective. The solution, however, does not reside in going back to a system in absolute control.

The PRIists are proud of their skills at running a government. However, their proven abilities to execute the functions of governing are not equivalent to a good government: through the 20th century, Mexico had many decades of deft governments but not of good governments. Had those been good governments, Mexico would be a prosperous and wealth nation, like Korea or other countries of similar development level. Clearly Mexico needs an effective government, but also a good government. The question is how to achieve that successful combination.

The PRI that today is flexing its muscles is not a modern or visionary PRI. Its view is decidedly concentrated on the rearview mirror, in what for many PRIists should never have been abandoned. It is the idyllic world of the professor: a government in control, a society in subordination, and a growing economy. The sixties.

For the old, PRI, political system, Mexican society never existed except as a manipulable instrument. I do not wish to suggest with this that the PRIist regimen denied the opportunity of economic development because evidence to the contrary is enormous, but it did do so in that its objective function, its raison d’être, was that of serving the interests of the revolutionary family: preserve power and exploit it to its benefit. That is what absolute majorities make possible: to impose their will.

When the PRI lost the presidency, it created the opportunity of transforming the political system and, in the way in which other nations surmounted their previous traumas, building on what already existed. Unfortunately, the two administrations that succeeded the PRI (and, in fact, the last three) lacked the vision, the grandeur, the capacity to transcend what they had inherited. We citizens ended up with a frail democracy that has not satisfied the expectations or changed the course of the country. The conclusion many reach is that the problem lies in the lack of legislative majorities to push the government’s agenda. I differ: the problem dwells in the incompetence of our recent presidents, in their inability to build majorities and transform the political system. It is not the same thing.

This failure is the main explanation for the PRI’s current situation. In frank contrast with the political parties of the old regime in other societies, the PRI had it easy: it didn’t have to reform itself to become electorally competitive again. The risk now is that it is the society that has to pay the piper.

Beyond the surveys and the differences in perspective between young and old –those who lived through the era of the abusive PRI and those who are living through the current disenchantment- the tangible fact is that the country itself is a great disorder. The PRI’s proposal to restore order is thus quite convincing: an effective government. The problem is that efficacy does not imply good government and that is the history of PRI. The paradox that no one apparently wants to see is that, beyond the generalized incompetence that the last three governments evidenced (two of PAN, one of PRI), the problems of the country hearken back to the fact that PRIist structures and interests were never substituted by functional institutions and duly structured checks and balances. That is to say, the problem that continues to this day is that the PRIist system persists despite the fact that the era died several decades ago.

Nobody can doubt that the country needs an effective government. In the PRI era, efficacy was almost guaranteed because the system was so powerful and ubiquitous that it made it possible for even lousy administrations to function in effective fashion. However, since the PRI split in the middle of the 80’s, its capacity to impose the presidential will drastically diminished. Ever since then, the success of a government has depended on the political skills of the individual in the presidency: it is no coincidence that between 1982 and the present only Salinas was effective.

In the past two decades, the country has decentralized in amazing fashion, but it has not developed a system of effective checks and balances that could confer stability and predictability. It is this factor that creates so much uncertainty: the possibility that the PRI might return to restore the old, oppressive, system or that Lopez Obrador would destroy the few things that have decisively advanced. Our problem is of absence of counterweights and that cannot be fixed with an “effective” government and much less so with absolute majorities in the Congress. Mexico requires a political negotiation among the political parties so as to create and institutionalize an effective system of checks and balances that can take the country to a new stadium of development.

Mexico has greatly changed, but not always for the better. The reality of the power in the country is already not one of political centralization but rather one of dispersion of power with an enormous concentration in partisan leaderships and governors, in addition to the so-called “de facto powers”. In outright contrast with the old PRIist era, the multiplicity of contacts that characterizes the average Mexican with the rest of the world is impacting. The only reason that the country has continued to get ahead in the past twenty or thirty years is precisely that Mexicans found ways of functioning independently of the government. It is the aftertaste of the old system -that of PRI and of Lopez Obrador- that keeps the country paralyzed. There’s nowhere to go back to.

The challenge for Mexico consists of dismantling, now definitively, once and for all, the corporatist structure that persists and that can be appreciated in state-run corporations, corrupt unionism, and in the private businesses, many of which are illicit, of PRI’s exalted personages. That is, to affect bases and support structures of the very PRI. What Mexico requires is taking liberalization –in the economic and in the political realms- to its maturity and this implies affecting interests that are fundamentally PRIist. The question is whether the beast can survive the dismantling of its entrails, and whether by controlling the presidency and the two legislative chambers, it would have the incentive to do it.  I doubt it.

The Mexican wants order, a factor that has strengthened the PRI in this electoral contest. But order without content is not an answer. To restore order and to end up constructing the pathway to economic growth it is imperative to break with what Mexico has been for so many years, that is, with the PRIist system. Who could accomplish that? Only a president with the political skills but one guided by the imperative of having to build a political arrangement with the other political parties.Returning to the era of absolute majorities would be an enormous regression.

www.cidac.org

@lrubiof