Throughout history, the world has been constructed, and more than once nearly destroyed, as a result of alliances both sacrosanct and sacrilegious.Alliances and coalitions are the essence of power. The ancient monarchies procured political marriages that expanded or consolidated empires, while modern parliaments construct coalitions in order to function. Independently of the objective that it pursues, the world stays in motion with power-sharing accords.

In the last two decades, Mexico has been an exception to this rule. Although there has been a great deal of legislative activity –more in fact in the fifteen years after1997, in which the legislative hegemonyof PRIdisappeared, than in the previous fifteen- the country has witnessed a political class that is practically incapable of committing itself and acting on the core challenges Mexico confronts, which in turn have translated into critical foot-dragging in matters above all economic. There have been an infinite number of reforms relative to social and political rights, but none relevant in the themes that impede the type of economic revolution that our main competitors on the global scale have experienced.

The explanation for this situation is obvious: the PRIist pact that sanctioned decades of stability in the last century collapsed due to the erosion that inexorably accompanies the exercise of power and, to no small degree, due to the evolution of Mexican society during this same period. The agreements of the twenties with which the grandfather of the PRI, the National Revolutionary Party, was born, were primitive, but were in sync with the post-revolutionary moment. In their essence, those compacts commanded respect for the top leader and cacique (jefemáximo) and his successors every six years, a presidential succession procedure and a mechanism for the distribution of benefits tied to the loyalty of players to the leader and to the systemat every point in time. That pact finally collapsed in the eighties when the party divided and the instruments that had furnished cohesiveness for the political class (PRIist) vanished. The 1997 and 2000 defeats were nothing but coups de grâce to a system that had stopped functioning and that, beyond nostalgic intimations, cannot be reconstructed.

Since the end of the eighties, the country has functioned, poorly or well, depending on the dexterity and political operative capacity of the individuals who have occupied the presidency. Salinas, a skillful and shrewd politician, knew how to use the instruments of power, while his successors did not; by the same token, the absence of checks and balances ended in political violence and a catastrophic financial crisis. In frank contrast with previous decades, the “system” –which had permitted political functioning independently of the abilities of the individual at the helm- stopped working. Our paralysis is not the product of coincidence.

The problem is, then, one of the organization and administration of power. The genius of the PRIist system consisted of its constructing an authoritarian mechanism but that, due to its nature,became an institutional structure that it was perceived as legitimate. What’s needed today is an institutional construction within a competitive and democratic milieu.

The PRIist structure worked around the PRI-President binomial that implicated internal negotiations with a great capacity for implementation.The PRI, as political control system, allowedguaranteeing that the decisions arrived at from thisbinomial could be implemented. It also incorporated disciplinary mechanisms that permitted marking off at least the worst forms of excess and abuse by public officials, union leaders, and politicos in general. The most evident consequence of that authoritarian and centralized structure was that it never fathomed the construction of functional institutions because these would havedelimited the power of the center. This is the reason for the brutal weakness of the state governments, a factor that has made possible, with the collapse of the central control, the constitution of primitive replicas of the old system at the state level.

How can this be changed? I see three answers: one, the favorite of the nostalgia-ridden of the old system localized today in two parties, would consist of reconstructing the mechanisms of authoritarian control in order to recover the effectiveness of the old system. The second would imply a great institutional revolution –the so-called political reform- which would procure institutionalizing what exists by the legislative route. The third would have institutional construction as its objective but its proposal would be procedural: to construct a great coalition that allows for transformation into a political system in its entirety. It is noteworthy that there are prominent politicians of all parties advocating each of these proposals: this is not a partisan affair.

In myopinion Mexico can only evolve through institutional construction. The notion that the old system can be reconstructed is absurd not because it would be impossible to strike an authoritarian blow,but rather because this would not resolve anything. This leaves us with two scenarios: that of the good will of our legislators in the presence of effective presidential leadership or the construction of prior agreements that make the latter possible. There is no difference of objectives, only of procedure.

The notion of a coalition government is not new, but it is not natural to a presidential systems due to an obvious reason: while a coalition in a parliamentary system obliges everyone to participatelest the government collapses, in a presidential system, the functionaries serve at the president’s pleasure and, thus,the permanence of a coalition depends on the disposition of the president. This fact explains the reticence of other parties to participate in the government that in past years -from Zedillo with a PANist attorney general and Fox without knowing what for- was attempted.

The logic of a coalition government is very clear: to incorporate representative political forces into a government committed to institutional construction in which all lose if any abandon ship midway. This would be equivalent, albeit a tardy Mexican response to the Monclova Pacts or to the Chilean Concertaciónafter Pinochet. The objective would not be media-driven but instead political: to attempt the construction of the new MexicanState. In this era, this requires the participation of all political parties because none presently represents a large enough portion of Mexican society.

Churchill said it very well in 1940, when he took the reins of a Government of National Unity: “We have differed and quarreled but now one bond unites us all”. In Mexico’s case that would be national reconciliation and the transformation of the State.

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@lrubiof

The paralysis of which we complain so much reminds me of the “laboratories of democracy” described by Louis Brandeis, a U.S. Supreme Court judge. His argument was that it is impossible to set rules for everything so you have to let things flow and find their place, so that experimentation leads to finding the best way to bring about the development of a society. Sometimes I think that the Mexican interpretation of such a laboratory ended up producing something more akin to Dr. Moreau´s Island, the H.G Wells novel where horrific vivisection experiments mixed men and beasts.

For starters, I have no doubt that the country has confused democracy with paralysis. I wonder if the etiology of this paralysis is “structural” as some have suggested or is the by-product of our current circumstances. For example, while someone in England breaks the rules (as with an unauthorized demonstration),he or she will suffer the direct and merciless onslaught of the authorities, in Mexico marches, sit-ins and blockades of mayor city arteries are celebrated and protected regardless of the cost to the population. Some might say this is the result of a political assessment: it may be less costly for a decision maker to look after and protect protesters than to suffer the citizen´s contempt. But at least in this instance there is no doubt that, first, there is a political calculation involved and, second, if willing, those in power would be able to act.

However, what happens when “things do not happen,” when a government proposes legislation and it gets stuck down the road, when a free trade agreement is negotiated only to end up being rejected in the Senate. In these cases, are we observingpolitical calculation or plain incompetence?

Let us start at the beginning, at the issue of the famous paralysis. If we refer to paralysis only in terms of the legislative process and the relationship between congress and the executive then it is clear that the alleged paralysis was first noted when the PRI lost its legislative majority in the year 1997. The then-new Congress wanted to distinguish itself from its predecessors by failing to comply with the wishes of the almighty presidency of old.We only need to remember some of the pompous, boastful, absurd and even disrespectful speeches of opposition lawmakers in their responses to the president’sState of the Union address of those years to illustrate that the explicit aim was to settle a historical debt not to build the foundations of a better system of government.

But let’s not overly dramatize: Congress is a much more active entity since 1997 than it was before. Today many more laws are passed and many of the laws that are approved respond to the interests of all kinds of people that have nothing to do with billsput forth by the executive (a subject which in itself deserves comprehensive analysis), but it shows that, far from being paralyzed, congress has in fact been quite active. And this truth also applies to presidential initiatives: Maria AmparoCasarhas studied constitutional reforms and provides a number that sums it all: in the fifteen years since 1997, 64 constitutional decrees were approved, compared with 42 in the previous fifteen years. Paralysis is a myth.

What has certainly changed is the fact that presidential initiatives are no longer approved right away and some never are. The infamous “freezer” (as presidential bills that go nowhere are known) is full of bills that never saw the light of day. However, this fact in itself does not prove thatthere is paralysis or that this is necessarily a bad outcome. In my opinion, a highly relevant and often laudable state of things is that we have ended the terrible habit of having Congress endorse anything that was sent by the executive. Although we are far from having built a system of checks and balances, at least now there are some boundaries to the potential for abuse by the executive, which was previously the norm.

Having said this, it is obvious that we have a problem. Beyond the figures, we all know that the country requires significant changes in several areas and almost none of these have thrived in Congress. That is, although Congress has been overly active, the country has spent years waiting to amend laws on economic issues. This leads me to put forth two hypotheses: either politicians are unable to move by a combination of inertia and fear, or they simply do not have what it takes, especially the ability to build political processes, that will propel us towards the needed answers and solutions. Our politicians turn seemingly insignificant obstacles into a trek to the Himalayas.

Reflecting on this leads me to conclude two things. First, the country’s problems have nothing to do with the existence of legislative majorities and, therefore, assuming that the mere fact of there being a majority wouldsolvethe challenges ofdevelopment is not just a chimerabut also a form of self-deception. And second, the fundamental problem lies in the astonishing lack of capacity for political maneuvering displayed by the last three administrations.

The belief that all problems could be solved with a legislative majority is, to say the least,infantile. It implies assuming that the old political structure of control can be reconstructed by the mere fact that one party controls both the presidency and Congress. If something is self-evident today it is that politicians of all parties have learned to use their relative independence to avoid being overwhelmed by the president. At the same time, the president no longer has the tools at his disposal to impose his or her will. Pretending that everything will be solved by returning to the ways of the past is truly naive.

The underlying problem lies elsewhere: in addition to the controls that characterized the system created by the PRI, it was also effective in maintaining the ability to command and control because from inception it forged a politicalaccordthat allowed for legitimacy, sharing of benefits and loyalty among its members. All this vanished during the seventies and eighties. What we need now is a new political arrangement that achieves the same goal but with distinct –and very distinct- forces,within an open system. That is, the prerequisite for building a functional system capable of addressing the challenges the country faces today lies in designinga new political arrangement. Majorities are required, but in today’s Mexico they have to be the result of coalitions, not of imposition.

The huge deficit of the last three administrations lies in the inability or political incompetence of our presidents. Certainly not a new problem, but the authoritarian nature of the oldcontrol structures even allowed for incompetent rulers. Not so anymore. Today we need the political skills that will permit the next president to go beyond the limits of a dysfunctional system, and ideally build one for the next hundred years.

www.cidac.org

@lrubiof

A Persian proverb says that “when it’s dark enough you can see the stars”. The national panorama does not seem sufficiently black to be capable of seeing everything that occurs, but it appears evident that, as the recently deceased scholar Guillermo O’Donnell noted, the main reason for disenchantment resides in having believed that “the brickwork of alternation of parties in government is the home of democracy”. Alternation of parties in government -the defeat of PRI- changed the reality of power but has not led us to the construction of a functional political system.

At least on the plane of political theory, there are two ways of constructing a political system. One, in the fashion of the social contract theories of the XVII and XVIII Centuries, derived from the principle that humans end up joining society to resolve the problems that they confront in an inhospitable environment. For Hobbes the motivation is the need for security, for Locke the need to protect people’s property and for Rousseau the constitution of an organized society that guarantees equality. These treatise writers were addressing the founding moments of human society.

Countries that have achieved the construction of broadly institutionalized and consolidated political systems respond to one of two scenarios: those that have for centuries been constructing and correcting errors and adjusting processes, little by little shaping centennial traditions that guarantee their stability. If one observes the evolution of English democracy over the centuries one will note how diverse crises, some of them violent, came to resolve themselves until at last the climate of civility was procured that is observed today but that was not always so. Others, like the French, attained their own equilibrium working along by trial and error until they achieved a stable system based on a presidential-parliamentary hybrid that is quite common in the world.

The other way of constructing a political system holds fast to the efforts made by the great statesmen of late on encountering real or potential situations of conflict in their societies. These examples show how it is possible to leapdecades or even centuries from the systematic construction of political accords among the main actors, parties, or political forces. There are diverse examples that illustrate this route. Each is distinct but what all have in common is the fact that there was an intentional construction of agreements oriented toward achieving a swift democratic consolidation.

In Spain, Adolfo Suárez understood that the road to constructing a future entertained only two pathways: the confrontation that would arise from recreating the divisions that led to the Spanish Civil War of the thirties or an agreement among all of the political forces on the mechanisms that would allow for constructing and concluding a transition process in a short period. His summons was issued to all political forces-those living in exile as well as those residing in the country, including the most representative leaderships of the entire political and historic spectrum- to agree upon a set of principal elements that would enable the construction of a new political regime. In South Africa, Nelson Mandela encountered a distinct problem: how to contain the avenging spirits of the Black crowds in order to preserve the jobs generated by Whites, within a civilized framework of coexistence. Both examples, of a half dozen of illustrative cases, suggest that there is no reason for a political transition to get stuck at its first stage as has happened with us. There are ways to break the stalemate.

In Mexico the transition has been so drawn out and complex that there isn’t even an agreement on when it began or how it should conclude. Each party defines democracy according to its expectation regarding the electoral results: for the PRI Mexico has always been democratic, for the PAN democracy began in 2000 and for the PRD it has yet to commence. Different from Spain, here there was no agreement on the procedures, thus the sole measure has been the result. With a country divided more or less into thirds (the history of the past two decades), the only possibility of advancing -save for an imposition- lies in the creation of a mechanism that guarantees fair distribution of the benefits of exercising power, independently of who wins the elections. Unfortunately, our system of proportional representation does not guarantee this.

A great impediment to any agreement lies in the unwillingness of everyone to cede something. On the one hand, the national psyche is so fired up that the very notion of ceding becomes unsustainable. Had they, to cite an obvious case the exiled communists or pro-Francoists, conducted themselves like this, Spain would never have achieved the pacts that launched the transformation that has rendered the society and nation that it is today.

Each of the political parties is experiencing real restrictions: the PRI has not been reformed and continues being dependent on many of the most recalcitrant interests that impede any change. The PAN commingles sufficient dogmatic and anti-PRIist elements to render any understanding with its historical rival highly difficult. The PRD evinces an irreconcilable rift between theexPRIists who continue living in the Echeverria-Lopez Portillo era of the seventies, and a modern and emerging social democracy. Only a grand coalition would empower the strengthening and privileging of each party’s groups and leaderships that retain a positive view of the country’s future, leaving behind all who continue to contemplate their umbilicus and harbor old dogmas that will never be the reality.

There are two ways to conceive a promising future. One, that of Spain, would embody a grand agreement on procedure. In the case of that nation, the agreement consisted essentially of the preservation of the Francoist legality until a new constitution and the electoral and political processes derived from it were approved. That is, a procedure was agreed upon, not an objective.

Our history of the last two decades demonstrates that an agreement similar to the Spanish one is impossible. First, because experience, above all 2006, is evidence of this. Second and more important, because differently from Spain, in Mexico there is no experienceor history of civilized behavior (even under an authoritarian regime) such as there was there and, in any case, because there the dictator died and here the same party persists. Mexicans need to break with the past without endangering stability or the chance of a better future.

For these reasons, given our presidential system, only a coalition government would countenance the splicing together of all of the political forces, conferring true representation to on all of Mexican society and forging the construction of agreements inside the government as a means of consolidating an effective transition platform that breaks with the paralyzing inertia of the present and confers full legitimacy upon the new government.

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@lrubiof

Reflecting on his efforts as prime minister and reformer during Russia’s post-Soviet stage, Viktor Chermomyrdinmade an axiomatic affirmation that is as applicable to Mexico as it was to his own country: “We wanted the best but it turned out as always”. Many of the reforms that have been undertaken in Mexico over the past thirty years heralded the best but ended up the same: insufficient; limited, and often biased toward special interests whether political, bureaucratic or private. Now that we’re in election season, we will hear many proposals of change and reform. As citizens, the mandatory question is which of the candidates is really capable of carrying off a change for the good.

The core theme is that Mexico is stuck for many reasons, including the pessimism that paralyzes everything, but I have no doubt that the main limitation is concerned with the ties that bind, which bar innumerable opportunities for development from materializing. Some of these have to do with the physical structure of the government, others with the isolation experienced by an important part of the industrial sector on which an overwhelming part of employment depends.  The country requires a great transformative vision of change that makes it possible for the population to assume itself as part of the process and one from which specific reforms emerge that, thanks to effective leadership, allow this to materialize.

Elections are unique opportunities for candidates to explain their proposal of government and to convince the electorate why it is that they deserve to be favored by the voters. One way of evaluating their proposals is to review the integrity of these. Another would consist of observing what the candidates did as public officials in their previous activities. It would also be relevant to analyze the dynamic that characterizes their parties and to what degree this constitutes a facilitating or limiting factor.

Campaigns are an exercise in marketing: they promote the candidate as a “product” in the form of proposals to achieve the objectives that they set forth. As voters, our responsibility is that of evaluating the reasonableness and viability of what they offer us. Like the so-called “miracle” products advertised on late-night TV, candidates inevitably, but logically, propose solutions that appear to be perfect. The question is whether they are viable.

Taking in the panorama, the general objectives that the candidates propose are not very distinct among themselves: they propose a developed society and a generalized transformation. I ask myself whether we should believe them. The PRI candidate implicitly argues that members of his party “do indeed know how to achieve it”.However, seventy years in government prove that they couldn’t. The candidate for the PAN presents an array of proposals that clash with the experience of the last twelve years. The PRD candidate vows to recreate the vision of development of the seventies, a time during which there were some four years of high growth rates, but followed by years or decades of depression.

The candidates for the PRI and the PAN propose the need to carry out a series of reforms. Both subscribe to ideas like converting the oil sector into a kick-starter for development and transforming the internal market.Although there are many differences that reflect contrasting views on the relationship between government and society,  this concerns proposals that, in the immediate term, are not radically distinct. Where there is a perceptible difference is in the manner in which they propose to achieve it: the PRI candidate proposes the constitution of an “effective” government, capable of achieving what the past three governments could not. For her part, the PAN candidate proposes a “coalition government” as a means of joining distinct forces and political interests together in one cabinet. The PRD candidate has been more circumspect about how he would do it, presumably relying on the strength of his personality as the engine.

None has explained how his or her proposal makes sense given the history that precedes them. Peña-Nieto’s proposal reminds me a lot of the Carlos Salinas presidential term during which the country underwent a great transformation in the nature of the government. For the first time in decades we had a government that understood the world as it was, that the economy could no longer be managed as if the country were a Mom and Pop variety store at the service of the bureaucracy and proposed raising the growth rate through private investment. Something like this is what this current presidential candidate did as state governor. However, viewed in retrospect, what Salinas did, but above all what he didn’t do, was revealing of the limitations of a PRIist government: steeped inpolitical, group, and union interests, the PRI could not reform what is today stuck in key places such as PEMEX, CFE, the SEP, the relationship of the Federal Government with the states, the judiciary, and other sectors and activities crucial for development. Salinas’s government revolutionized part of the private-sector economy but did not transform the economy in general or the political or governmental structure to a great extent because he was structurally impeded from doing this.  The question is whether this saturation of interests committed to the status quo has changed because, if it has not, the reforms that their candidate proposes would be impossible.

Josefina Vázquez-Mota’sproposal is perhaps more ambitious than that of Peña-Nieto but finds itself up against a similar situation: after twelve years of her party’s incompetent governments, how would it be that her proposal would entertain a greater possibility of achieving the objectives that she proposes?The PANist governments did not make good on a change of regime nor did they construct an innovative and distinct political or governance structure. Without doubt, there are some exceedingly meritorious advances that were the product of those years, such as transparency and access to information, but the promised change never came about.

The case of López-Obrador in somewhat different because this candidate does not propose any reforms but rather the recreation of a scheme of governmental rectorship that would imply a core modification of the government-economy relationship and an inevitable confrontation with the industrial scheme constructed around the NAFTA. His challenge will be to explain how, by his doing the same thing, we could expect something distinct.

The candidates owe the citizens an explanation of why they have the key to the solution for the country’s problems at this moment and of howthis is different from what their predecessors did and achieved. It is not the past that determines the present or the future, but in the absence of other bellwethers, this particular one is exceedingly relevant.

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@lrubiof

The Walmart case is an affront because it illustrates a facet of Mexican life that no one wants to face. We all know that in Mexico nothing can be resolved without the employment of an intermediary that, in good Spanish, implies give and take, licit or not. The impressive breast beating that the case has incited does nothing more than confirm the old saying that “a good scapegoat is nearly as welcome as the solution to the problem”.

Beyond the specifics of the Walmart case, whose details remain obscure, what it evident is the fundamental contradiction that today characterizes the country and that can be synthesized in a phrase: today we have first-world entrepreneurs but still have a fifth-world system of government. The capacity of the country’s economy togrow depends on the strength of the companies, but this will always be restricted by the power of a vile bureaucracy whose rationality is not concerned with the growth of the economy, the generation of employment, or the enrichment of the country.

The matter exhibits several angles. Above all is the economic transformation that the country has experienced over the past decades and that, although real, has exerted a lesser impact than that promised. In the last twenty five years there have been numerous “investments” that, little by little, have transformed the nature of the economy. Among these the following are prominent: the liberalization of imports, which has drastically reduced the cost of industrial goods, but also of meat, clothing and footwear, to cite some obvious examples. The growth of the physical infrastructure -highways, dams, bridges, generation of electrical power- has permitted raising companies’ productivity, reducing communications costs, and making the supplying of electrical power reliable. The export capacity of the country has mushroomed in volume and in geographic diversity. With all of its defects, the electoral system has transformed the political culture. The middle class has grown prodigiously. Business productivity is comparable today with that of economies much wealthier than ours. The point is that, despite all of the limitations and problems, the country is transforming itself below the surface.

Surely delays persist in economic matters and the inputs supplied by many state companies, above all PEMEX and CFE, are not price competitive or dependable with respect to their delivery times. Similarly, there still arenumberless activities that continue to be protected, thus enjoying the dubious privilege of not having to compete. The result of all of these evils is that the overall economy is less competitive than it could be and that rather than generalizing the benefits of the successful part of the economic activity, these tend to concentrate. But what can’t be ignored is that today there are thousands of companies that are ultracompetitive and that, little by little, are changing the face of the economy.

What hasn’t changed is the quality of governmental administration, above all at the state and municipal level. The famed “permisology” (the science of getting permits of all kinds from government offices) continues to be as complex as ever. The simple opening of a business can take months and its incorporation into the Tax system or the Mexican Institute of Social Security can leave the sprightliest aged and infirm. But it is doubtless that those that take the cake are the local governments, whose modus vivendidepends on “contributions” by businesses to undertake any activity. The historical instruments of the politicians’ and bureaucrats’ sudden coming into wealth are construction and zoning permits, to which we may add diverse authorizations such as liquor licenses in restaurants and opening businesses.

What we have is the collision of two worlds. On the one hand, the liberalization of the economy was and continues to be partial, leaving behind infinite breaches of unproductiveness. On the other hand, a political system that was never reformed and that translates into criteria of plundering rather than of promotion by the authority, at all levels of government.

In the old system, much of which persists, governmental and political positions were distributed with criteria of awards for loyalty to the system or to expand the realm of control. That is, namingpublic officials responded to political and corporatist logic and entailed implicit permission to utilize each post for personal ends. Loyalty to the system was rewarded with positions that afforded access to power and/or corruption. A functionary saw the post not as an opportunity to generate economic development, attract companies to their locality or raise the productivity of an industry or a sector, but as a means of personal or group enrichment.

The latter has not changed practically anywhere. The Federal District delegation authorities or those of the municipalities still understand their positions as means to benefit their clienteles or to accumulate funds to line their own pockets or for the next electoral campaign. In other words, corruption was and is the raison d’être of the dividing up of government posts. It would be a truly exceptional situation for a civil servant -named or elected- to understand their function as that of promoting economic development and paving the way for this to occur.

From this perspective, what’s pathetic about the Walmart case is not the corruption into which this company could have fallen, but the impressive show of hypocrisy that has characterized the politicians, who now lend themselves to reviewing the files, as well as that of many of the critics, who would have us believe that they had never in their lives chanced upon any evidence of corruption. I doubt whether it would be possible to find a sole Mexican who has not been obliged to opt for obtaining a service or permit that requires the inevitable corruption fee, or to sustain himself in the limbo of morality.

Instead of insisting on this world of simulation, it would be more useful to begin to look for the way to resolve the basic problem: to construct a modern country. The country requires institutionalizing its governmental processes, eliminating the sources of discretionary authority that confer such great power on the bureaucracy and generating the growth platform that, due to these absences, continues being so decrepit. Professionalizing municipal services with managers who don’t change with the electoral cycles would be a good place to start. But this would only be relevant if the objective were the development of the country…

Yogi Berra said “Before we build a better mousetrap, we need to find out if there are any mice out there”. The question is whether we have budding statesmen/stateswomen or merely predatory bureaucrats.

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@lrubiof

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.

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@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.

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@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.

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@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…

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@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.

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@lrubiof