As in the unhappy families of Tolstoy’s fame, each of the poor countries is unhappy in its own way. The mystery of prosperity is something that has intrigued innumerable scholars and philosophers. What is it that makes some countries prosper while others remain poor?

The discussion with respect to prosperity is vast and interminable and each has their own theory. The paradox is that the most appealing proposals tend to derive not from scholars or statesmen but from interested parties. For an industrialist prosperity is (nearly) always the product of governmental support in the form of tariff protection or subsidies. For a bureaucrat there is no means to prosperity other than the public expenditure. Caricatures no doubt, but suggestive of the manner in which each procures justification of their preferences with an insignia that disguises the pecuniary or political interest that lies in back of it.

But the scholars are notfar behind. Two recently published books attempt to explain the phenomenon of development and prosperity. Very distinct in focus, they provide perspectives that contribute to understanding what development is. They also show, perhaps without having proposed to do so, how difficult it is to achieve it.

In Why Nations Fail: The Origin of Power, Prosperity, and Poverty, Robinson and Acemoglu ask themselves why some societies are democratic, prosperous, and stable, while others are autocratic, poor, and unstable. Perhaps no question is more transcendent for nations attempting to achieve development, although the manner in which they formulate the question already suggests a problem: at least the case of China might appear on both sides of the equation.

The argument of these scholars is that the bottom line in development is not economic but political: it is the institutions that establish the rules of the game and that create incentives that determine the way the population will act. From this premise they elaborate an interesting approach: there are two types of economic institutions, those that are “extractive” and those that are “inclusive”. The extractive ones guarantee the prosperity of a few at the expense of all of the others. The inclusive ones favor the participation of all under the same conditions. Slavery and feudalism illustrate the former case, while market systems subject to a rule of law comprise the prototype of the latter.

According to the authors, the nature of these institutions is determined by the conformation of each nation’s political structure. The deciding characteristic of inclusive institutions is the combination of centralization and pluralism: the State should be sufficiently strong to contain the power of the private interests but, at the same time, to be controlled by mechanisms of political authority widely disseminated by the society: checks and balances. In the absence of any of these components, the political arrangement becomes extractive, thus exclusive.

The thesis of the book ends up being very simple: extractive political institutions generate extractive economic development models, while inclusive institutions will generate inclusive models. The crucial moment in history at which differentiation between these two models was achieved took place when in 1688 the British Parliament imposed itself on the authority of the king, giving way to the Industrial Revolution. Maybe the most interesting, but also fragile, part of the argument is that which attempts to explain the case of China: an autocratic nation and one that, however, has achieved high growth rates and a rapid decrease in poverty indexes. Their explanation is that China is an extractive nation that sooner or later will encounter a limit to its growth if it does not achieve a transition to therule of law.

Niall Ferguson adopts a historical perspective. In his book Civilization: The West and the Rest, Ferguson contends that the reason that Western nations achieved the prosperity that characterizes them has to do with a series of“killer apps” that came together to produce a source of immense wealth: competition; the scientific revolution; the rule of law and the representative government; modern medicine; the consumer society, and the work ethic. “For hundreds of years, these “killer applications” were essentially monopolized by Europeans and their cousins who established themselves in North America and Australasia. They are the best explanation for what economic historians call “the great divergence”: the astonishing gap that arose between Western standards of living and those in the rest of the world. In 1500 the average Chinese was richer than the average North American. By the late 1970s, the American was more than 20 times richer than the Chinese.”

In contrast with Robinson and Acemoglu, Ferguson has a richer explanation for the case of China and other nations: “Beginning with Japan, however, one non-Western society after another has worked out that these applications could be down-loaded and installed in non-Western operating systems. That explains about half the catching up that we have witnessed in our lifetimes, especially since the onset of economic reforms in China in 1978.” The result is that prosperity has multiplied in ever more diverse latitudes.

Both perspectives offer angles that allow for better understanding of the lacks and absences in our own process of development. There is no country that does not experience contradictions and undergo difficulties. In fact, Ferguson’s book is directed at Americans, summoning them to revert the process of deterioration of these six “killer apps”. According to this author, the risk for the West, above all for the U.S., is that the “pupils” end up being much more skillful, thus much more successful.

On reading these two books the argument came to mind of another scholar, Nathan Rosenberg, who in the eighties published a book entitledHow The West Grew Rich. His argument was scathingand perhaps more simplistic but no less powerful. “The West’s sustained economic growth began with the emergence of an economic sphere with a high degree of autonomy from political and religious control.” In other words, prosperity flourished when the State stopped imposing its preferences on the economic actors and was limited to whatRobinson and Acemogluput forth: a State capable of containing private interests while simultaneously being controlled by effective checks and balances.

As the contradictions ofChina illustrate, there is no way to achieve prosperity overnight. What can be done is to go about constructing it. It is this intentionality that has been absent in Mexico lately.

www.cidac.org

@lrubiof

In the seventies, when the Anglo-Saxon countries were besieged with Japanese products, Charles Tilly published an article on the paradoxical effect of WW II on industrialized countries. The heart of his argument was that countries that had been devastated at the end of the war had hadno alternative other than constructing a new industrial plant. On their part, nations such as England and the U.S. had experienced continuity in their industrial bases that, twenty years later, showed signs of aging. The devastation had made obligatory the construction of the most modern while continuity had accelerated economic aging. It seems to me that something like this could be happening in the public security panorama in Mexico.

For decades, the country’s security had been procured through informal means deriving from an authoritarian State that administered, to a greater degree than impeded, criminality. In recent lustra, the appearances have changed but the realities have become more and more acute. Take the case of Mexico City: from the beginning of the nineties, Mexico City began to experience a well-attested decomposition in the security ambit. Abduction took on industrial dimensions; assaults became a way of life. Marches and strikes grew without surcease. Many chilangos, capital-city residents, emigrated to Puebla, Monterrey, and other latitudes in search of tranquility. In the last two or three years, this pattern has reverted: now internal migration has been directed toward the city, perceived to be safer than places like Ciudad Juárez, Tampico, Chihuahua, or Monterrey.

The question is whether a qualitative change has taken place or merely one of perceptions: Had a new security apparatus begun to be built, one subject to democratic controls, or was something simply done better than what for years had been done poorly? While serious-crime indexes in the Federal District (D.F.) have diminished, the rise of open violence in diverse zones of the country has increased dramatically. Today many Northern Mexicans have migrated to Mexico City simply fleeing from the violence. However, one must ask whether security in Mexico City has improved and, if this is a yes, is it sustainable or merely a circumstantial product of a more efficient administration.

The collapse of the security institutions in diverse regions of the country is absolute. In some cases, organized crime took total control; in others (on occasion the same ones) the arrival of the Army liberated the citizenry from corrupt authorities and narco-affiliated police, but also got rid of informal mechanisms that contributed to safety in diverse niches of daily life, whether or not these were the scum of society: there are studies suggesting that the red-flannel-wielding car parkers avoid the theft of cars and car parts, a function that should correspond to the police, but that’s another story. When the Army has made a clean sweep of everything, including the car parkers, crime goes up.

The tangible fact is that in many regions and cities in the country the old mechanisms of control and security have disappeared, leaving these a no man’s land. Contrariwise, this discontinuity has not occurred in Mexico City. According to some experts, in the D.F. the mere presence of abundant police contingents serves as a dissuasive mechanism for certain crimes. It doesn’t matter, they say, whether these are ignorant police officers, poorly trained and poorly paid: the very fact of their being there satisfies an important function. What is equally certain is that many old-style, social-control mechanisms persist in the Federal District, such as the use of phone tapping, co-opting, and the manipulation of criminality. The whole yields a palpable result: the perception of less insecurity in the D.F. could be extraordinarily precarious because it is sustained on mechanisms that are incompatible with a system of democratic participation. It is not by chance that democracy continues to be so delimited…

In an excellent article in the January issue of Nexos, Joaquín Villalobos argued that the old security model has collapsed and that a radical transformation is required. What worked before for a modest and marginally threatening criminality, says Villalobos, has collapsed because it was held up by flimsy pillars that are not sustainable in the face of organized crime and its enormous power of corruption and of violence. “Many of the theses that oppose confronting organized crime attempt to find ways to pacify the criminals, instead of fortifying the State for it to control the delinquents”.

This brings me back to the initial statement. In places like Tamaulipas or Ciudad Juárez, there is nothing left to preserve of the old mechanisms devoted to security. In these places as in Germany or Japan at the end of the WWII, the need is to start at zero. If their authorities have the vision and the capacity, they would do well to come to grips with the construction of modern security systems, compatible with a democratic regime of citizen control and sustained on an educated police officer, well paid, one who earns the respect of the citizenry in his/her daily undertakings. This is not something impossible or inconceivable. Although modest, the program that Querétaro has constructed in this regard is an example of that it is possible to change and develop something quite distinct.

Mexico City runs the risk of likening itself to England and the U.S. in Tilly’s example. Since things are not that bad, don’t shake them up. Something’s working, let sleeping dogs lie. Let’s take advantage of the existing agents (many police officers, much illegal espionage, and a somewhat efficient judiciary) and we’ll have it made. Preserving the D.F. security model because it’s not as bad as that of the rest of the country would constitute not only an enormous missed opportunity, but also the possibility that the security system would likewise end up in collapse.

The old co-opting, control, and administration of crime tied in perfectly with a vertical political system at whose heart was the head, the boss, the cacique. Despite all of the imperfections of the current political regime, that former system is incompatible and counterproductive and will become increasingly dysfunctional. In the security ambit, this would imply a seamless transformation of the police, of the system of procuring justice, and the manner of understanding the government-citizen relationship. Putting the house in order is of the essence and the preeminent task at hand.

www.cidac.org

@lrubiof

The Library of Babel, one of Jorge Luis Borges’ most provocative works, is not a rational tale. The universe that he constructs, the library itself, is not something logical: saturated with contradictions and inconsistencies, in which there is life without food and children who are born without there being women.  However, there is a certain logic in the panorama, albeit not one that an Aristotle or a Bertrand Russell would have desired: all the books are found on one or another of the bookshelves, although exactly where is not clear. That is, while it may appear crazed, there is a certain method in the madness of the scheme constructed by the great Argentinean author. I would like to think that something like this occurs regarding the structure of regulation employed in attempts to gain governance over the Mexican economy.

The problem is that more faith than evidence is required to believe this. Just to illustrate, over the past months two legislative billswere processed in the Congress that lead to two differing and contrasting visions of where the country should advance towards, that is they are absolutely opposite: in one, in the competition law, the proposal comprises combating collusion and monopolistic practices. In the other, the initiative relative to public-private associations, collaborative schemes are proposed between businesses and the public sector to develop projects, above all concerning infrastructure. On the one hand, collaboration is fought against, while on the other hand, it is fostered. Many will say that there is not necessarily a contradiction between one concept and the other, and they may be right, but there is no doubt that there is an obvious conceptual confusion concerning how economic policy should be conducted. A peek through the rear-view mirror reveals that many of the problems of competition date back to the way that the government conducted industrial policy until the seventies and to the pacts to beat inflation of the eighties. In both instances, the government promoted active communication among enterprises to achieve their changing objectives.

The core issue is not which model exists nor the one adopted, but rather the fact that we live in a sea of contradictions that inexorably exert the effect of generating confusion, of opening spaces for the violation of certain regulations, and, at the end of the day, of diminishing the level of investment. In one sense, existing regulations entail contradictions that make it impossible for a company or investor to be sure of the regulatory framework that is relevant to their project, which discourages investment. On the other side, a company can take advantage of the differences, contradictions, and gaps that remain in place between a regulation and another for their ship to come in.

In addition, a regulation scheme saturated with contradictions opens opportunities for the commissions responsible for exacting compliance with each of these to abuse or to be excessively wary: in one case because it facilitates personal crusades, the product of interests, ignorance, or diverse motivations and, in the other, because the contradictions paralyze them. That is, from whatever vantage point, what we have today does not contribute to a greater level of investment, an economy with more internal competition, or improved clarity of course with respect to the development of the country.

Aside from the regulations emanating from laws or presidential decrees, each of the commissions charged with regulation –telecommunications, COFETEL; competition, COFECO; and energy, CRE- follows its own logic, the latter in part derived from the law that witnessed its birth, but it is also the product of the individuals, such as presidents or members of their boards, who have been tailoring them. If one departs from the strictly economic environment, the same is true for other regulatory instances, such as IFE (elections) or IFAI (access to information and transparency). In all cases, the logic that led to the creation and development of these instruments followed its own legislative dynamic: in some cases it was impregnated with disputes, but in others it heeded the logic of a specific public official who promoted it, regardless of whether it was compatible with others who were also crafting regulatory mechanisms. The fact is that the legal and regulatory ambit is not consistent and is replete with incoherencies and contradictions.

Each of the commissioners or board members of these entities is convinced of the virtue of the instrument that they represent. Each believes that their function is to comply with the mandate –explicit or implicit, or as each understands it- that norms the existence of the entity, independently of what could transpire in other instances. Perhaps this Borgian logic makes some sense, but it constitutes an enormous and permanent source of uncertainty for potential entrepreneurs and investors.

The case reminds me a little of what happened with public spending some thirty or forty years ago. Throughout the seventies, the governments of the so called“tragic dozen”(1970-1982) devoted themselves to increasing expenditures (and regulations) as if there were no restrictions whatsoever. They created programs and trusts, new governmental ministries and entities, all these responding to some brilliant (and changing) idea of the president du jour. Years later the public budget had exacerbated, disorder was rampant, the deficit had ballooned, and inflation grew without surcease. All this dissuaded investment until it ended up paralyzing the economy.

The solution in the end was a multifaceted effort within the government to rationalize what there was, expunge the unnecessary, and reinforce the fundamental. That is to say, through an intra governmental group, known as the “Financing-Budget Commission”, representatives of the diverse governmental ministries and instances addressed themselves (implicitly) to defining governmental functions and focusing their efforts and resources on the agreed upon priorities. The instrument permitted a return to financial stability, an end to inflation, and, in the long run, set the foundations for economic growth and the development of the middle class.

Something similar is urgently needed in the regulatory ambit: to see the forest instead of each one of the trees; to define priorities and a sense of direction; and to cease pinpointing the details of each item in order for the diverse regulatory instances to permit, in concert, greater governmental rationality. Along the way, it would be equally desirable to fortify the institutional structure of these entities with internal as well as external checks-and-balances and supervisory mechanisms.

Contradictions are an unending source of opportunity for writers of fiction such as Borges, but a nightmare for those only fancying the creation a company and the unleashing of lifetime opportunities. The former delight us, but the latter are those that put food on the table.

www.cidac.org

@lrubiof

In “The Blues Brothers”, after Jake (John Belushi) left her standing at the altar and with a dinner for 300 guests, his former fiancée shrieks at him, “You betrayed me!” “No, I didn’t”, he says, now cornered next to Elwood (Dan Akroyd). “Honest. I can explain. I ran out of gas. I had a flat tire. I didn’t have enough for the cab fare. My tux didn’t come back from the cleaners. An old friend came in from out of town. Someone stole my car. There was an earthquake! A terrible flood! Locusts! IT WASN’T MY FAULT, I SWEAR TO GOD”. Just like this initiation of the electoral seems to be. Solely excuses for what hasn’t been done.

Election years are always the most vulnerable point of any political system. Transmission of the reins of government entails an entire ensemble of processes, actors, and decisions, each of which can generate conflict at the least provocation. Thus, for example, it is no coincidence that practically all of our recent political crises –political or financial, from that of 1968 to 2006- have taken place precisely at those times. It concerns a moment (comprising months) during which the outgoing administration no longer controls all the instances of the government and the incoming administration has not yet begun to function.

The phenomenon is virtually universal, although it is aggravated in nations with weak institutional structures, in which all key personnel change overnight, that is to say, in which there is no civil service that drives the government to function in good times and in bad, with politicians or without them. In some cases, as occurred in Argentina some years ago, the new government began functioning prior to its legal date-of-entry to avoid yet greater deterioration.

The risks of discontinuity are enormous because all of the personnel of the political apparatus are already thinking about their future and, thus, engaged in something else. The legislators –who in a more representative political system would be in great proximity to the voters, seeking re-election- from April on will be concentrated on their next job. Federal public servants will be doing their own thing at the very most until the election and will then begin to line up other possibilities for themselves. The fact is that the country will be concentrated, in the best case scenario, on the future. The question is who will be in the kitchen tending the home fires and assuring that no essential ingredient is lacking.

In an institutionalized country there would be no cause for concern about these issues, but that is not our case. In England there may or may not be a functioning government at a given moment, but the bureaucracy labor on without surcease: there professional personnel are permanent and the only change is that of the Minister in each entity, whose responsibility is strategy, not daily operations. The same happens in France: a noisier nation than the former but whose bureaucracy possesses the inner workings of a Swiss watch.

In Mexico’s case, practically none of the recent successions have been conflict-free. Despite the Zapatista uprising and the political assassinations, in 1994 we barely got through it and still ended up in deep financial crisis. In 2000 we made it because the politically correct candidate won or, stated another way, because the PRI lost. In 2006 we underwent the most severe political conflict since1968. The big question is what this year holds.

Political processes depend on the rules of the game, on the capacity of the governmental actors to make them work, and on the individual conduct of each of the actors. When everything plays out in the direction of stability (clear game rules that are perceived as legitimate; an effective and reasonably impartial government; and serious and committed actors who perceive no alternative other than the legal one), we have a scenario like that in the U.S. in 2000 when the dispute for votes was limited to what was legal and everyone stood at attention and saluted when the U.S. Supreme Court delivered its verdict. The opposite extreme would be cases such as the Ivory Coast, where two governments co-existed for months in an environment of permanent violence. Each will decide where Mexico is in relation to this continuum, but it is noteworthy that its weaknesses are enormous.

To start with, the rules of the game are new, have been disputed by everyone involved, and the electoral authority does not always know how to proceed and does not enjoy wide-reaching respect on the part of the contenders. In the second place, the President of the Republic has distinguished himself more for his partisan attitude than for the exercise of the basic function of maintaining order, guaranteeing peace, and exercising his faculties  impartially. And finally, among the key actors in this contest there’s a little of everything; from the most integral institutionality to the most consummate irreverence. These are the players Mexicans will have to work with.

The outcome of this year will most assuredly depend, in addition to the candidates’ and their parties’ behavior, on three key factors: the way in which the president and his innermost circle conduct themselves, the manner in which the key macroeconomic indicators are administered, and the actions of the electoral authorities. Each of these factors could either guarantee the smooth running of the process or render it explosive.

The candidates will follow their own logic and silk purses cannot be fashioned from sows’ ears. But the two crucial factors will be the government and the electoral authorities. The government has distinguished itself more for its concern with who wins than with the optimal functioning of the country and has allowed its team, instead of concentrating on its responsibility, to skew the results. This leaves the watered-down crew of electoral authorities, upon whose shoulders rests an intelligent management of a complex process requiring a flexibility that the law does not afford but that reality exacts.

All of the presidents, past and present, believe that they have the reins of the country in their hands. Fifty years of evidence shows the contrary: no one can impose an electoral result at the present time and the potential for conflict is infinite. The presidents also think that they can manipulate the political processes at will. The latter is partially true at the initiation of a six-year presidential term, when the construction of a project begins. Five years later the situation is very different: everything is focused on the future and the outgoing administration’s instruments and capacities erode with the ticking of the clock. At this rate the only thing left is to hope for a happy ending. We Mexicans know that the risks are enormous and we can only hope that each of those responsible for the process contributes to the least unhappy end possible…

www.cidac.org

@lrubiof

From Plato on, the idea of an open society has entailed transparency, a capacity to respond, and a government that is tolerant of and respectful toward the citizenry. Karl Popper enlarged, developed, and annotated the concept with his observations throughout the XX Century. For him, what was crucial was not the quality of the government but the capacity of the citizenry to impede the government from abusing it or from perpetuating itself in power. Thus, the pretense of establishing an open society, with transparency and checks and balances, would appear to be much more optimistic than what Popper had believed possible. In a country that has not yet achieved approximating itself to this level of civilization, perhaps the relevant question would be what happens when, despite the appearances, everything conspires against opening and transparency, even by many of those who constantly and systematically demand this.

The attraction of living in an open society is enormous and arresting. But the first obstacle that Mexico confronts in this respect is that ours is a country that is in good measure insular and engrossed in thought, above all among its elite groups. The contrast among the political class, upper-level entrepreneurs, and intellectuals with the citizen-in-the-street can be appreciated categoricallyin the matter of immigration, a factor that provides overwhelming evidence that the pedestrian, foot-soldier citizens are infinitely more cosmopolitan than their more illustrious counterparts. While a Mexican from Oaxaca who immigrated in recent years to New York without papers and lives in an environment of employment, legal, and economic uncertainty understands the functioning of the market because he/she experiences it on a daily basis, many entrepreneurs, intellectuals, and politicians reject its worth right off the bat. A greater comparison would be difficult to find.

But this is our reality. Mexican society is one that is less open and transparent than what is frequently presumed and many of the mechanisms of social interaction are defined more by their stanch nature than by their institutional functioning. I gather together some diverse examples here.

In a distinguished, provocative, intelligent, and ingenious article entitled “Kafkacyt”, published more than thirty years ago, Ruy Pérez-Tamayo argued that the institution created for the promotion of science and learning was nothing more than a bureaucratic load of rubbish devoted to sponsoring interest groups for the politicians or projects whose scientific value was evaluated by persons ignorant of the theme. Decades later, in recently adopted regulations, The Mexican National Council of Science and Technology (CONACYT) continues not to sponsor Master degree studies in foreign countries for diverse disciplines under the criterion that the same Master degree programs are offered in Mexico. All of us who have studied abroad know that the greatest value of engaging in this lies not in great scientific, technical, or theoretical learnings, but in the experience of living under another educative, cultural, and social system. The greatest value that a student acquires on leaving their country is the cosmopolitan perspective that, by definition, could never be acquired if they stayed. This is the reason that governments such as the Korean, the Chinese, and the Brazilian go out of their way to find spaces –in tens of thousands- for their young people in Europe or in the U.S. We want ours to study in Tuxtla. The results should not surprise us.

Another example: hundreds of public institutions annually sponsor diverse surveys, above all in the health sector. Although these institutions utilize public resources, they treat the surveys as if they were private: they’re the only ones who have access to them. In an open society, everything that is sponsored in the scientific ambit by us taxpayers is public information. But the patrimonialistic logic is implacable: public funds are considered private and are utilized for the benefit not of the country but of the individuals involved. Not very open, transparent, or cosmopolitan.

In the ambit of administration the phenomenon is ubiquitous: the government is not responsible for anything. A vehicle can undergo a serious accident because of holes in the street, the absence of streetlights, or of signs. Were this an exceptional situation, no one would worry. But because this is a country that seems at times to be more a collection of potholes laced together by pavement than duly cared-for streets, the issue is serious. How many vehicles have suffered damages, suspension breakdowns, or tire damage on the thoroughfares of the main cities? Surely thousands. However, no one is responsible. On there not being any responsibility, there is no incentive to avoid accidents, to take care of the public works, or to duly administrate these. If we were to extend the issue to temperamental changes of regulations and other bureaucratic mechanisms, the theme could be extrapolated to the entire public administration, at all levels. There is no transparency and response capacity, and interest in having this is way too scarce.

Laws and regulations are designed for special interests, which denies the quality of open society. The electoral law is one of those examples that illustrate everything that should not be because it can’t be. The notion of legislating opening and civility is a thing of beauty, but a political impossibility. Although its promoters defend it tooth and nail, the law has done nothing but hide what really takes place: it has become an incentive, in a mechanism that fosters the simulation and systematic violation of the law itself. In addition, the notion that the good and civilized behavior of campaigning politicians can come about by decree is naiveté that does not even merit commentary. What this surely will not achieve is making Mexican society more open, transparent, or civilized. For this to happen, we’d have to go in the opposite direction: liberalize, give power to the citizenry (and not to the bureaucracy), and force politicians to be accountable.

The heart of the issue lies in that the country has not experienced what is technically denominated a regime change or, at least, a paradigm change. In addition to having for decades managed problems instead of resolving them, the essential objective of our system of government (of whatever stripe of party) is to preserve in power the heirs of the Revolution and their accomplices in other parties.

What Mexico requires is the consolidation of an open society that is only possible through a regime change. Any party can promote it, but it cannot be achieved by someone simply in search of continuing to enjoy it:  a new system of government is required.

This is the true challenge for the country in the upcoming years.  One way or another, more of the same (with any party) is not the solution.

www.cidac.org

@lrubiof

A person’s perspective on public affairs determines the way of acting. Joseph de Maistre, a strategist and critic of the French Revolution at the end of the XVII Century, wrote: “Opinion is so powerful in war that it can alter the nature of the same event and give it two different names, for no reason other than its own whim. A general throws his men between two enemy armies and he writes to his king, ‘I have split him, he has lost’. His opponent writes to his king, ‘He has put himself between two fires, he is lost.’ Which of the two is mistaken? Whoever is seized by the cold goddess of fear… It is imagination that loses battles.”

In Mexico we are living through a war of perspectives, visions, and opinions. All of this combines to complicate decision-making and to confuse the society, which is, it would appear, an express objective. As we come within close range of this year’s electoral contest the level of confusion can’t go anywhere but up. And there are good reasons for this.

When institutions are strong and limit the sphere of action, –that is, they restrict the effective power- of whoever currently occupies the presidency, the person of the president becomes important but not crucial. In this manner, independently of the natural differences between parties and candidates, no British or Canadian citizen perceives that their country will live or die as a result of an election.

The contrary is true in nations with weak institutions, in which the person occupying the presidency exerts a colossal impact on the future of his/her country. It is sufficient to contrast the demarche of Hugo Chávez in Venezuela with that of Luis Ignacio Lula da Silva in Brazil to make the result evident. The person matters.

Mexico is confronting fundamental challenges that will have to be attended to in the upcoming years. The problems of security, economic growth, and political stability will require responses that can no longer be evaded. Whoever occupies the presidency will be required to take innovative action on these matters. The obvious question is who will achieve the necessary transformation without affecting, but rather consolidating, the rights of the citizen and without causing a financial or economic crisis along the way. The intrinsic strength and clarity of course of whoever becomes president will be transcendental.

In 2010, when England was approaching the election of its prime minister, the weekly periodical The Economist posed a question on the three contenders. Who will have the skills to resolve and eliminate the obstacles impeding economic growth? In its analysis, the publication concluded that some candidates understood the challenges but did not have the skills or they had an inadequate proposal of the solution, and vice versa: some had the vision or the skills but did not have the correct diagnosis.

Assuming this perspective, in recent years the notion has taken hold that Mexico is overdiagnosed, that all of the problems are known and that it would be enough for Congress to agree to emerge from the present gridlock with no further ado. I beg to differ. While it is apparent that the problems besetting the country are quite clear, it doesn’t seem obvious to me that a consensus exists re the causes of these; thus, it is impossible for all of the proposals for a solution to be competent. In addition, we are very prone to intermingling causes and symptoms.

In nominal terms, the problems facing the country are sufficiently clear and concern, in great measure, impediments to the growth of the economy and the dysfunctionality of the political system. The mixture has created the scenario in which we have experienced poor economic development, a substantial informal economy, the security crisis, and the permanent political din.

The proposals for solutions to these wrongs are many and very diverse, but not all respond to their causes and not all are equally appropriate to resolving the core problems. Just for illustration, among the proposals currently on the table for confronting the growth problem, two that exemplify contrasting ways of conceiving of the problem stand out: some propose greater State rectorship and an active participation of the State through the public expenditure as a source of stimulation for growth. The other proposes attacking the causes of the problem on the microeconomic plane, that is, for example, procuring a rise in the national content of exports in order to drive internal market growth or resolve regulatory problems in order to formalize the informal economy now subsisting outside of the legal framework. These are two radically distinct perspectives in terms of diagnosis as well as of the government’s role in the economy.

An incorrect diagnosis can lead to counterproductive strategies, as we have observed so many times with the financial crises of the past decades. On the other hand, a correct diagnosis can lead to the resolution of the problems without a fuss. What’s the difference? The difference involves the sturdiness of the decision maker, his/her disposition for grasping the inherent complexity of the problems that we are confronting and his/her relentlessness in separating preferences and ideologies from relevant analysis.

It is in the political sphere where perhaps the greatest problems and main source of contradictions lie that, sooner or later, manifest themselves in decisions and actions that impact the economy and other ambits entailing governmental action. For a political system to function, all actors must feel themselves to be participants and perceive benefits in participating. The PRI system resolved this issue of power in the thirties of the last century with the carrot and the stick duo: the promise of access to power and/or wealth for whoever remained loyal to the system and the president. That system collapsed, giving way to the era of unsuccessful encounters and conflicts that we live in today.

Today the country requires a new political arrangement that is inherently compatible with an active citizenship, regular electoral competition and democracy. The system that was forged eighty years ago ceased to function because it did not adapt and needs to be with a new power arrangement on how to establish relationships among the powers that be: the political parties, the political forces, the citizenship,  that makes it possible to make decisions and implement them, while simultaneously diminishing the incentive for conflict. The paradox is that achieving this exacts great clarity of vision and operational capacity that leads to the institutionalization of power. That is, agreements on power do not come about by osmosis, but instead are the result of effective leadership that translates into capacity for political action. This does not happen then other way around: institutionalization is the product of coherently articulated agreements.

The person who wins the presidency matters and even more so because of the fragility of the moment we’re living through at present.

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@lrubiof

One would think that victims would be the first to be interested in what is referred to as “due process” of law. In essence, the concept implies that the procedures that judicial authorities follow in their inquiries and investigations must adhere strictly to legal limits, and cannot be unfair, arbitrary or unreasonable vis-a-vis the person being charged or investigated. Due process constitutes a basic right designed to protect a person who, even if charged, may be innocent.

The issue at hand is the much debated Cassez case, a French woman that has been sentenced to sixty years in jail for kidnapping. In its draft resolution, to be discussed by the members of the Supreme Court, Justice Arturo Zaldivar argues that the violations of the rights of the accused during the investigation were so broad that they cannot be overlooked. The proposed resolution has generated an outcry on the part of victims, who rightly argue that if the Justice’s draft were to become a Court’s decision,the rights of victims would be utterly ignored.

In a country characterized by so much violence and impunity, it seems logical that victims and their relatives organize themselves to demand that their rights be considered, that the guilty pay for their crimes and that the State assume its responsibility before the current crime wave in the country. Victims clearly have rights, starting with their right to make their voices heard in the public debate. What does not seem to be clear to me is that opposing the Zaldivar draft is a rational course of action or that it is in line with the objectives and the causes that they are pursuing.

Opposing due process implies opposing the professionalization of the Office of the Public Prosecutor and of the police forces, i.e., opposing the consolidation of the State, the entity responsible for addressing victims’ demands and the security of its citizens. Strengthening the State is a prerequisite for public safety, and for the ending of impunity, corruption and violence.

Victims exist due to the weakness of the State and its pre-modern nature, which in turn helps explain crime and impunity. A state that violates the rights of its citizens is not a state worthy of its name and neither is it presentable in the international arena on which our economy depends, together with our self-esteem and stature as a nation. How can we challenge cases involving Mexican citizens in U.S. courts –on due process grounds no less- if as a country we do not respect due process and other basic principles of any self-respecting judicial system?

Of course, from the victim’s perspective, a favorable ruling for the Zaldivar project would entail releasing the person in question, something that could potentially unleash a sea of injunctions by other criminals currently in prison. Victims are legitimately opposed to the release of those who kidnapped, harassed, hurt or murdered their relatives or themselves. No one can question their anger.

The victims’ main objection to the Zaldivar draft is that it does not take them into account. My impression is that, given the focus he took, the judge did not ignore them but instead targeted the root cause of the criminality that generated these victims: the weakness of the State, and in this case in particular, the weakness of the Public Prosecutor’s Office. The lack of respect for due process, the draft implicitly states, is one of the causes of our current state of affairs. This is why, I think, opposing the Zaldivar approach is the by-product of anger -or could it be desire for revenge?- over rational and careful reflection.

The issue at stake is crucial. Due process is one of the central elements of a just society, and a bulwark of the rule of law and democracy. As Mexicans we know that the Public Prosecutor’s Office and the police violate procedures on a daily basis. No country can consider itself modern if it is unable to respect the rights of citizens, including the rights of the accused. A ruling against this principle would constitute a step back to the Neolithic era. A ruling in favor would mean a radical change in the incentives for both police and prosecutors and would open the door to a new era in judicial affairs in the country. This indeed is no small matter.

The paradox is that the starting point for activists and victims is that they have no trust in the authorities while, at the same time, they ferociously defend the proceedings and conclusions reached by the authorities. The subject would be laughable if it did not involve something so crucial.

Lack of trust in the authorities is the result of past experience. In theory, authorities are responsible for eradicating endemic problems such as corruption, impunity, criminality and violence. However, historically and looking beyond the rise in crime and violence seen in recent decades, our governments, at all three levels, have not been noticeably adept at fighting these evils. In fact, the incentives that our political system offered were not those of a modern country but those of an authoritarian system in which those in power had little or no reason to be interested in ordinary people, except when they complained. In other words, the authorities and governments have earned the citizens’ contempt.

A resolution in favor of due process would have enormous consequences because it would generate both positive and negative incentives. On the positive side, it would force both the public prosecutors and the police to undergo a radical reform, which is why the Zaldivar project is so important. On the other hand, a resolution against the Zaldivar draft would create incentives for all criminals to start injunctions against their charges or convictions. That is, kidnappers, murderers, drug dealers and other criminals could claim the same right. The cost of having abandoned the rule of law is high, but continuing to do so would be intolerable.

The important question to ask is what we want as a country. One option would be to continue following the “ostrich strategy”, i.e. to pretend that we can end misrule and mismanagement of justice by staying the way we are. The alternative would be to address any ensuing problems so that we are able to start building a modern, civilized and democratic society.  Magistrate´s Zaldivar project is a huge challenge for this nation’s citizens, politicians and judges, who have not distinguished themselves by their willingness to concentrate on the problems of building a dignified future. What is at stake is enormous, even if the consequences that would need to be confronted are huge.

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@lrubiof

“The first principle is that you must not fool yourself,” said physicist Richard Feynman, “and you are the easiest person to fool.” This is how our perception of Brazil seems to be these days: it is easier to conjure up barriers on likenesses and differences than to identify what is relevant and to adopt a strategy to deal with this.

There are many myths about Brazil and at least two conflicting dynamics. The first, the more prominent in the media, is the issue of bilateral trade. Here one can detect all the fears and fallacies that characterize a good part of the Mexican industrial sector. The other concerns the nature of the Brazilian economic policy and its supposed virtues. Fooling oneself is always pernicious.

Decades ago the Brazilians adopted an economic strategy devoted to promoting a certain type of industrial development. Since the era of the CEPAL (Economic Commission of Latin America) in the post-war period, they promoted heavy industry, high technology, and a local manufacturing base. The model adopted at the time was not radically different from Mexico’s, except that they, to a great extent due to the political weight of their military, devoted enormous resources to projects such as aviation and heavy machinery that were not profitable but that followed another logic. Some of their successful exports reflect that priority, although the cost of having arrived at that point had been monumental.

The main Brazilian exports, many of these high-tech, are concerned with agriculture and mining. Their great success of the past several years refers essentially to the enormous Chinese appetite for mineral products, grains, and meat. Just as we have a significant dependence on the U.S. economy, they have the same with respect to China. Time will tell whether one of the two was much better than the other.

But the principal difference between the two nations has little to do with their exports and much to do with the strategy. In the eighties, Mexico decided to abandon the development model based on the subsidy and protection of producers in order to privileging the consumer. This decision was based on experience: instead of decades of protection having translated into a strong, vigorous, and competitive industry, the Mexican productive plant –with many notable exceptions- had grown stagnant.

Why this happened or whether trade liberalization was the best response can be debated, but the fact remains that favoring the producer ended up being extraordinarily onerous for Mexican consumers who paid exorbitant prices for mediocre products. Much of the improvement in the well-being of the population of the past two decades had to do with the competition introduced by the imports. Today we have a hyper-competitive productive plant that, as a whole is far more successful than the Brazilian. The result for the country –albeit not for all companies- has been positive.

The Brazilians opted for another path. Although in recent years they have begun an incipient liberalization of imports, their baseline model continues to be the same: protecting, subsidizing, and privileging the producer. Thus is reflected by the trade conflict in automotive matters that has exacerbated recently. The decision to impose quotas on the importation of Mexican products denotes a less successful industrial strategy than is apparent and an obvious reluctance to compete. It is not by chance that Mexico’s per capita income is higher than theirs.

What has the Mexican response been? On the part of the government, the proposal has been to negotiate a bilateral commercial treaty that impedes changes in the rules of the game. On the part of the Mexican private sector, there is absolute rejection of any negotiation. The reasons are known: because the Brazilians take advantage of the situation, because there are security problems, because the infrastructure, because the costs of the goods… because we don’t feel like it.

Beyond the rhetoric, the posture of the Mexican private sector is contradictory. The main argument for rejecting negotiation is that Brazilian products enter Mexico without restrictions while Mexican exports to Brazil face permanent hindrances and a nightmarish bureaucracy. One would think that this argument would be, or should be, the principal reason for procuring a treaty guaranteeing the access of Mexican imports to that country. If the Brazilians engage in capricious mechanisms to control imports, the best way to eliminate this capriciousness is to negotiate certain and guaranteed access. Over the past decades, commercial treaties have become an instrument for breaking through impediments to access for Mexican products to other markets. Since Brazilian products already enter into the Mexican market, our private sector should be anxious to finalizinga treaty with Brazil as soon as possible.

The learning that I derive from these observations is that what we lack is a government capable of making good on the public interest. In this country we have ended up confusing democracy with paralysis. In the commercial ambit, the collective interest and that of the country should be that of the Mexican consumer and of exporters. Regarding the former, trade should be facilitated; and, in terms of the latter, the conditions should be created for these to penetrate other markets. Paralyzing business negotiations because one or two producers are opposed (for example, those of dried chilies, surely a basic product for the functioning of the economy, as occurred with Peru) is equivalent to sacrificing the rest of the Mexicans.

None of this denies the right of producers to protect their interests, but the function and responsibility of the government is to keep watch over the collective interest. One of the main problems of the country is that the “old” industrial sector, the one that rejects any and all trade negotiations, is not linked to the export sector, which renders it more vulnerable to any change. A government well in places should be making certain that this sector of the economy is subject to competition while having a proper framework to make it function.

Paradoxically, for Mexican industry to prosper it is necessary to let it fly, which implies deregulating, reducing import tariffs, and of course, addressing issues such as the cost of goods provided by the federal government (like energy) or by the suppliers of services whose prices are higher than those of other countries. This said, the industrialists who so bitterly complain should study how the Brazilian paradise works. If they believe that the Mexican bureaucracy is complex or that the prices of goods and taxes are high, they should take note of Brazil: everything that happens here is peccataminuta compared with what goes on there. Time to compete.

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@lrubiof

Would it be possible for a solution that appears to be perfect in concept to be nothing more than a false start, a chimera? Einstein affirmed that “we can’t solve problems by using the same kind of thinking we used when we created them”. It seems to me that in discussions on how to confront the narco and organized crime we have fallen into a terrain of solutions that appear perfect, except that they ignore the context within which the problems exist.

Legalizing drugs resolves all of the problems and does so in elegant fashion. With a legislative act, all violence vanishes, a business is legalized that today is illegal and, if we’re lucky, even tax collection grows. Above everything else, the notion of legalizing allows us to imagine a more peaceful world, less violent and kinder. It would be impossible to beat such an array of virtues.

The problem, as Einstein would have said, is that legalization constitutes a linear way of thinking about the problem: it ignores the concrete reality in which the phenomenon takes place. More than anything, it pays no heed to the conditions that would be necessary for legalization to function.

I detect two central problems with the notion of legalizing: the first refers to the nature of the drug market; the second, to our objective reality. With respect to the former, the relevant market is not the Mexican, but rather the U.S. one. In order for legalization to entertain the possibility of furnishing the desired effect, it would be the Americans who would have to legalize, because that’s the market that counts both by size and by the regional dynamics that it creates. Even so, it’s not obvious whether legalization as debated today would have the possibility of rendering the expected result, because the majority of those who champion legalizing drugs limit themselves to marijuana, that is, they don’t include other drugs such as cocaine and methamphetamines, which comprise the gross chunk of the business as it relates with Mexico.

The other issue is the truly relevant one: our problem is not one of drugs but of lack of State. Before the violence mushroomed to its current levels, the main problem was not the narco but rather organized crime (ranging from abduction to car theft and product piracy). The government, at all levels, has been incapable of containing it or forcing it into submission. The narco did nothing other than complicate it and make the challenge much greater. Our problem is one of police and judicial incapability. The State was brought to its knees by the problem of public security.

Mexico never had a professional police and judicial system. What it did have, throughout the greater part of the XX Century, was an authoritarian political system that controlled everything, including criminality. Instead of building a modern country, the PRI system constructed an authoritarian system that was equal to the challenges of its time and conferred upon the country the stability necessary for achieving economic growth and the consolidation of an incipient middle class. These were not lesser achievements when we compare the Mexico of the forties and fifties with other nations, but neither did they constitute the formation of a modern country.

Some will remember The Supermachos, a comic strip that faithfully reflected this era. The police chief and the municipal president were plainspoken, guileless characters who resolved problems based on what life had doled out to them. No one could accuse them of lacking in creativity, but their skill derived from experience, not from the existence of a professional apparatus. It was a coarse and primitive world. Thus, exactly thus, was the police and the judicial power. Not much has actually changed…

While problems were local and smaller, the state apparatus, in the broadest sense, was adequate and sufficient for dealing with them. Like The Supermachos, it wasn’t that there was a modern and sufficiently developed capacity, but rather that it was enough tokeep peace in the country. It wasn’t a modern state, just one that functioned for what was minimally required.

The gradual erosion of the system of political control and the eventual defeat of the PRI in the presidency put an end to the management of crime and, in a fatal coincidence, placed Mexico directly face to face with a assemblage of perils–organized crime- for which the country never prepared itself and, it must be said, is not even now beginning to prepare.This isn’t about guilt but about confronting the reality.

The growth of organized crime and the narco occurred under diverse circumstances, but these were fundamentally foreign to the internal dynamic of the country. Organized crime arrived to “take care of” a repressed demand for goods in great measure by the emerging middle classes who were laying claim to satisfiers like those consumed by the most well-to-do but without their purchasing capacity. Organized crime, transnational-scale, satisfied this demand at first with stolen cars and auto parts and then with products such as DVDs, CDs, etc., principally originating in China.

The growth of the narco responded to a good extent to changes taking place in other latitudes: the structure of the U.S. market; the success of the Colombian government in regaining control of its country;and closing achieved by the Americans of the Caribbean drug-trafficking routes. These three factors concentrated the narco in Mexico, consolidated the Mexican mafias in the business, and became a factor of brutal transcendence in the national territory. And in addition to this, there was the hardening of U.S. southern border after 9/11, with which, suddenly, the phenomenon acquired ever more territorial and less strictly logistical characteristics.

The underlying point is that the government did not possess the tools or the capacities to respond to these challenges. All of a sudden, at the beginning of the nineties, the country began to experience deep changes in its security structure that sealed its fate. First, a primitive and incompetent security system, totally politicized; second, the erosion of the traditional controls; and, the plate filled to overflowing, the expeditious growth of criminal organizations with economic might, armament, and the disposition to engage these at any price.

Legalizing (or “regulating”) would be a conceivable response in a country that possesses police and judicial structures that are strong and capable of establishing rules and making them stick. That’s what Mexico needs and this should be the issue that the government addresses with heart and soul. Until that happens, the idea of legalizing drugs will be nothing more than a water-cooler topic with no hint of reality. The problem in Mexico is the absence of State capability: the insecurity and the violence are the consequence of this lack, not their cause.

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@lrubiof

Alexis de Tocqueville, the famous French thinker and politician, coined the idea that certain countries would be exceptional, that is, qualitatively distinct from the others. Great myths have been constructed around this appreciation. What makes a society distinctive is the nature of its population, its history and culture, and its way of being. In this dimension, no two societies in the world are alike. But this does not mean that human beings are condemned to be like our predecessors, or that there is no power in this land capable of making us change.

Democracy, a theme that impassionedde Tocqueville, is a perfect example. For decades, if not centuries, only a handful of nations achieved being called democratic; however, today we are able to observe the manner in which democracy has become deeply rooted in societies that are as distinct as those of Korea and Japan, Chile and Spain, India and Mexico. Once these other societies appropriated the institutional structures necessary for democracy to function, it began to flourish. People who some decades ago rejected the possibility that the Mexicans could discern among candidates and exercise their right to vote have been overtaken by the dedication with which the population has responded in the nation’s elections.

We are distinct from other nationalities because of the culinary, cultural, architectural, and historical attributes that compriseMexicanness. These characteristics frequently make us feel exceptional. However, poor understanding of these attributes has become a dogma that holds us back from improving, from developing our economy, and from being successful.Many of the most recalcitrant interests in the country have seized upon the idea of exceptionality, not because they believe it, but because their objective is to maintain the status quo: the more people accept the latter as dogma, the better it is for these interests. Feeling exceptional is very good for our self-esteem, but terrible for development, because it implies that measures that work in other societies would not be applicable to Mexico, such as free trade, competition in the marketplace, good government, absence of corruption, an effective political system, or a richer society.

We are not unique or exceptional in terms of being unable to duplicate the successes of other countries or to adopt better ways of doing things.To accept the contrary would imply denying the freedom that we have as human beings for transforming and developing ourselves, as well as the responsibility for our own expansion. A nation that does not adapt is a nation that accepts that others –their politicians, their interest groups, or, as we call them in Mexico, the de facto powers- decide for the citizenry. Some see a political party as the cause of our ills, others blame individuals.The truth is that it is we the citizenswho have ceded our right, our freedom, to others to decide for us.

The political change of the last several years has been enormous and, nonetheless, insufficient. In the public forum, we Mexicans dream of a “velvet-like” transition toward democracy, as has occurred in some of Eastern Europe, or democracy by the consensus route, as in Spain. Today we know, or perhaps have yet to achieve assimilating, that these elegant solutions did not come about in our country. Our reality is that of a society that moved toward democracy but without the institutional mainstays and the decided participation of all of the political forces, which ended up translating into a great mismatch that does not permit advancement: the conditions necessary for favoring covenants of great depthamong political actors do not exist. However, instead of procuring the best arrangement possible, as so many other societies have done, we have remained mired in the nostalgia of the ideal solution. The alternative would be, rather than seeking an agreement among all the actors, to focus ourselves on a sole goal: the creation of wealth.

What Mexico needs is a new way of understanding its development, of accepting our characteristics and circumstances. Moreover, thepathway into which we are locked makes for a risky future whenever the minimal employment, opportunity, and income requirements that the population rightly demands are not satisfied. This reality propels us to think distinctly, to focus on our problems in novel ways. In a word: to stop aspiring tothe perfection that legitimately drives many grandiose transformation proposals, in order to devoteourselves to resolving the immediate problems that are urgent and necessary. Nothing is lost if, once advanced, the country finds better conditions for construction ofthe underpinnings ofan ambitious transformation, such as those that are mentioned but that are not feasible at this time and under the present circumstances.

The first heading to target for resolution is not that of institutional reforms under discussion, but rather, reactivation of the economy.Our economy has plodded along for decades without growing at the rhythm at which it is capable, but above all, at that which our demographic and social reality demands. A growing economy permits the attenuation of social conflict and contributes to resolving ancestral problems. This can only be achieved to the extent that all of us Mexicans adopt economic growth as the main objective of public administration, and in turn that all political and legal resources are devoted to acceleration of this growth. Thus, instead of dispersing efforts in numberless themes and reforms, we would address ourselves nearly exclusively to making possible the generation of riches, the resolution of problems that directly affect this in regulatory, employment, and political ambits.

The manner of articulating this objective is critical. In a wholly developed and institutionalized nation, the discussion would be carried out essentially in the legislative forum and the pertinent decisions would be made. In our case, the situation is very distinct. Mexico requiresleadership that is strong and effective and whose sole interest and objective is the country’s development. This leader would do his or her utmost to forge the agreements necessaryfor imposing the relevant accords and to join with the population behind a strategy fully dedicatedto the economic transformation of the country. Our experience with strong leaderships over the last decades has not been very good, but I seeno other way of achieving this transformation. Perhaps it depends on us, the citizens, to beready and willing to allow the emergence of a leader with these characteristics, but to keep an eye on the leaderthereafter like a hawk.

Prologue tothebook: Ganarle a la mediocridad: concentrémonos en crecer. M.A.Porrua 2012

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@lrubiof