When Plutarco Elías-Calles proposed the need to “cease being a country of political bosses or caudillos so as to become a country of institutions”, he proposed the rough draft of the central problematic of the country. Unfortunately, viewed in retrospect, the solution that he found on constructing what ended up becoming the “Mexican political system”, and the party as its central figure, did not constitute a lasting solution, and we are now paying the price.

Decades of political peace and economic growth cannot be denied with a pithy affirmation such as that of the previous paragraph, but if we analyze the coming-into-being of the country throughout the post-revolutionary period, the result is not as benign as it would appear at first glance. It is indubitable that between the end of the 1920s and the 1960s, the result is spectacular by any skimmer. However, the economic as well as the political performance of the country from the mid-60s onward has been pathetic. The economy has grown barely a little over 1% on average per capita in this period, and the crises to which we have been witness -electoral, currency exchange, legitimacy, guerrillas, political assassinations, kidnappings, narcosis- reveal a much less kindly and promissory reality.

The point is not to blame or to accuse, but rather, to analyze the ills that beset us. The system that was constructed from 1929 on (and that, for all practical purposes, continues to be the same one) emphasized loyalty and discipline, but not by way of the development of strong and transcendental institutions, but instead, by means of the development of a cultural hegemony based on the revolutionary myth, and, above all, on the exchange of loyalty and discipline for benefits in the form of appointments and access to corruption. The system achieved control of the country and of the population by means that were as benign (e.g., economic growth) as they were authoritarian. But it did not procure, nor even attempt, the assembly of an institutionalized system of government.

While the Callistic system was able to eradicate caudillismo, at least at the presidential level (and those who tried to restore it were crucified, in manner of speaking), it was unsuccessful in achieving that the country cease being one of people rather than institutions. The system was supremely successful in creating a class of competent political operators, responsible and capable, experts at problem-solving, at avoiding crises, and emerging, time and again, from the mire, but it did not generate a capacity for building a developed nation. The contrast between feeble institutionality and the fortitude of individuals with political skills is noteworthy: it is two sides of the same coin.

Of course, all countries generate competent public officials and politicians, but the exceptional feature in Mexico comprises the petty institutionality that characterizes them. The system generates absolute but impermanent allegiances, and all have their counterpart in the guise of personal perquisites; however, as soon as the six-year term dematerializes, loyalty recedes from view. The king is dead, and, as with the British Crown, long live the king. But the king in Mexico is the person: the individual politician who lives from post to post, surviving and attempting to become rich and powerful along the way. Here there are no institutions -no loyalties- that survive the presidential term. The problematic has persisted in the post-PRI era. Entities such as the Federal Electoral Institute (IFE), Transparencia, and other like bodies were generally constructed with nary a care for protecting their institutionality and are vulnerable in the extreme to the pummeling of personal political interests.

The cost of this reality can be appreciated in all circuits, and more so when they are in contrast with other nations that, little by little, have come to break with being condemned to underdevelopment. We can see this in everything: in the nonsense to change all public policies -such as taxes- at every juncture; in a business community that, with few exceptions, has no long-term view; in an infrastructure fabricated to breach the gap (for example, Ciudad Juárez was the locus of the greatest economic growth and employment in the Mexican Republic between 1980 and 2008, but investment in infrastructure has been infinitesimal); in the paucity of attention to the obvious problem of oil production; in an education policy intent on satisfying the teachers union and not to preparing the country, beginning with the children, for the world of competition based on the creative capacity of people. Examples abound.

There are so-called “de facto powers” because there are no institutions with effective counterweights obliging them to contributing and adhering, instead of plundering. The networks of interests and privileges -economic and political- hold fast and multiply because there are no institutional mechanisms –checks and balances- that limit and obligate these to abide by the law. The “real” rules of the game are not the same as the written laws, and as long as there is a cleft between them, institutionality is impossible: everything depends on people, with their fallibilities, interests, and preferences. The Mexican political system continues to be hierarchical, virtually monarchal, and has never developed effective counterweights or institutional devices that confer upon it the necessary flexibility for adapting itself and responding to growing challenges. In a word, the incentives that engender our reality induce political operators into blackmail and wounding the institutions. The question is how can we break this vicious cycle and get ahead.

Today’s problem is not, in essence, distinct from that faced by Calles. The country depends on people whose interests and objectives are not (nor can they be) those of the country. What we require is an institutional framework that allows for the capacity and ability of all of these individuals in all spheres of life to flourish: businesses; the countryside; politics; professions, and all the others. That is, what we need is an arrangement among all the forces and political forces and groups so that the issues of power and monies are defined, thus permitting the remainder of society to develop. The theme is not one of the law or of public policies that no one respects, but is, rather, one of the essence of power: how it will legitimize and institutionalize the system of government so that it can be effective.

Agreements of this nature arise under three types of circumstances: a consensus that translates into a pact (as in Spain); a crisis that makes a response inevitable (as in Germany and Japan after WWII), or great leadership that forges a transformation (as in South Africa, Brazil, or Singapore). There are no perfect models, but what is for sure is that the train conveying the Spanish-style pact never arrived at the Mexican station. It will have to be one of the other two types.

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In his book on the “clash of civilizations,” Samuel Huntington foresaw that the upcoming era of worldwide conflict would derive from distinct and irreconcilable disputes between cultures. His vision attained exceptional notoriety with the Twin Tower attacks because it appeared to explain the new phenomenon. Nonetheless, however attractive his theory seemed, it would not permit explanation of another facet of the cultural phenomenon: the shock found within each culture itself. The disputes that often characterize us transcend the limits of traditional rationality and can only be deciphered as owning to contradictory views, irreconcilable differences, and the inability to secure common solutions.

I have been reflecting for years on the phenomenon of the internal struggles emanating, at least in part, from cultural differences, but it was the reading of a recently published and exceptional book* that allowed me to assume a much keener perspective. On scrutinizing the Arab world, the book describes two manifestations of the shock of civilizations, which appear to have been adopted from a Mexican novel of manners.

Lee Smith comes to grips, on the one hand, with the differences characterizing the internal dynamic of Arab societies. The author observes that, contrary to what one could deduce from press reports and opinion articles regarding Middle Eastern societies, there is no one way that embodies the general sense; thus, the argument employed by political leaders to justify their inaction ‒that is, as not to stir up the “Arab steet”‒ is no more than a stratagem to skirt modification of the established order. From an analytical vantage point, the very notion of monolithism is absurd; however, if one reflects upon the history of the PRIist era, monolithism was precisely what was the pride of the system: i.e., there was a truth, and that was the one that counted.

The second manifestation of cultural struggles according to Smith refers to the incapacity of recognizing any responsibility: someone else is always guilty of the things that happen every day, of the problems the country faces, and of the impossibility of acting in the face of the evident evil characterizing the region’s economies and societies. Confronted by the inability to recognize and confront the problems, the solution has been to blame someone else, and, notes Smith, from decades past, the guilty party ‒and the convenient scapegoat‒ has been the U.S.

Some conclusions that the author advances are particularly relevant for our own reality. Certain phrases evoke sanguinity with our culture that makes us pay special attention. Some textual phrases: “the problem of Arab democracy is not the lack of supply, but the lack of demand”; “the people prefer a strong horse to a weak one;” “understanding the region is impossible if one fails to recognize the meaning of violence, coercion, and repression;” “the strength of any society depends on its cohesion… of the narrative that shapes it;” “tribalism ‒the sensation that society is defined, in essence, by the clash of groups and positions‒ is a formidable force”; “full recognition and respect is reserved only for believers”; “there is no disinterested intellectual… everyone is at the service of the powers-that-be”; anti-Americanism is not the result of U.S. policies, but rather of an organic element of local politics”, and “society changes, but the social narrative remains intact.”

Mexico is not an Arab country, but on reading the pages of this work, one is unable to stop meditating on the evident similarities. In Mexico, it is possible to observe two phenomena: the raw struggle for power and for personal and group  objectives, and the employment of external resources (like the US, the PRI, the private sector) to evade responsibility and to allocate guilt. PRIist culture and narrative always bestowed privilege on national unity, a certain distancing from the rest of the planet, and, above all, a one-way world view. The system exploited (and manipulated) the population’s fears, the history of the American invasion, and the apparently endemic poverty to maintain and nourish the legitimacy of the system. Foraging for popular support, above all from the populist governments of the 1970s, never contemplated the consequences of their rhetoric or of their reinvention of history.

The Niños Héroes/Child Heroes narrative is paradigmatic. Created during Miguel Alemán presidential times to commemorate 100 years of the American invasion, the legend leaned heavily upon all of the utilitarian elements in order to be believable and generalizable: heroism; childhood; school; the flag. It was an essentially inoffensive narrative because it was constructed from within and did not generate a hostile climate. During the 1970s, the utterly nationalistic aapproach became aggressive and defensive, acting as the context for modifying many rules of the game in economic matters and finally beginning an era of crisis from which, all things considered, we have never emerged.

The PAN has not been reticent: its historical cohesion arose from its opposition to the PRI, but once it came into power, it did not know how to develop a positive program with a vision of the future. Instead of building a novel narrative, which focused perhaps on the development of institutions or on the development of a truly market economy, the PAN continued in its Manichean logic: the other is the guilty party. It is not different for the PRD: here we observe the use of the spurious argument by Andrés Manuel López-Obrador. Cohesion of the Mexican political class has depended on assigning fault to others instead of constructing a future.

Perhaps most symptomatic of the cultural war described by Huntington and Smith, each in his own, is that the country presently finds itself in the midst of internecine combat conditions in which the particular interests representing, or leading, many of our politicians are disguised in benevolent positions, when in reality they constitute fundamental threats to the development and well-being of the country. Irreconcilable positions may generate cohesion, but do not provide the country with viability, and even to a lesser degree, the possibility of emerging from its stagnation.

The internal feud, which has come to be called “the dispute for the nation,” is alive and well. Years, decades, of attempts on behalf of change have not yielded the fruits that satisfy the population, although the productive apparatus has been greatly transformed. The country will remain the same to the extent that we continue to simulate and pretend that defending particular privileges and interests exacts no price: change, but with no sense of direction. The lesson of the Arab countries -as illustrated by those with no oil- is that development cannot be feigned if everything to render it possible is rejected out of hand.

*Smith, Lee, The Strong Horse: Power, Politics, and the Clash of Arab Civilizations, Doubleday.

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Gadfly and great satirical actor Groucho Marx once observed that “Politics is the art of looking for trouble, finding it, misdiagnosing it and then misapplying the wrong remedies.” The prevailing notion in Mexico is that the country is over-diagnosed, that the problems are known and understood, and that the genuine problem lies with legislators and government officials not committing to and acting upon approving “the reforms”, thus forfeiting the opportunity for the country to get ahead. However, it is not obvious whether the diagnoses have become unsullied truths, or whether the content of the reforms, reiterated ad nauseam, are correct. While the country evidently is in need of innumerable reforms, the content of these is important, and no less than key, for leading toward the objective of getting out of the rut and giving free rein to development. Nothing courts danger more than doing the incorrect correctly.

The essence of our problematic centers on a sole concept: conflict. Conflict is inherent in any society. As homogeneous as it might be, there is no community of humans that does not manifest differences, interests at odds, or incompatible perspectives. Ralph Miliband, one of my great teachers, affirmed that without conflict, it is impossible to understand human society. Conflict is part of the daily life of the most institutionalized and civilized, as well as the most contentious and violent of societies. The difference between these does not reside in the existence of conflict, but rather, in how conflict is processed and revolved.

The prevailing diagnosis trusts that the problem of institutional paralysis lies in our incapacity to agree on something. Thus, the argument goes, it is urgent to find a way to bridge the gap among positions; this done, the country would begin to flourish. Thence, proposals that are that are oriented not toward channeling conflict but, instead, to suppressing it: to create majorities, even if they are artificial, so that, this time, we can emerge from the impasse. In essence, there is nostalgia for the presidential solutions of yore, and concurrently, for the Spanish and Chilean transitions in which all political forces agreed to disregard the past in order to construct a new future.

Contemplated in retrospect, the circumstances of these two nations prior to the end of dictatorial government were very distinct from those of our reality. Both Spain and Chile built legal systems that functioned as mechanisms to settle disputes, and that afterward served as platforms for the transition itself. In Spain, there was an explicit agreement to maintain the post-Franco Constitution, not because it was good or because it had the blessing of the new political structure, but because all forces recognized how fundamental it was to maintain a legal regime to which everyone was obligated and that set down the rules of the game. In Mexico, the rules of the game were those of the PRIist system, and were based, not on a functional legal system, but on the power of the president. This system eroded and finally collapsed in 2000. In contrast with Chile and Spain, Mexico entered into a political transition process without a map, without game rules, and without institutions capable of channeling and resolving political conflict. Viewed in this manner, it should have been obvious that a transition such as those in Chile and Spain was simply inconceivable in Mexico.

Then along came what Joaquín Villalobos denominated “the democratic deception syndrome.” For those who expected a smooth transition, disenchantment has been major. The greatest problem at present does not lie in lack of action, but in error in diagnosis and closed-mindedness when faced with the desideratum for analysis. Rather than recognizing the inevitability of conflict as a component of human nature, the debate has been absorbed in the need to impose majorities and to returning to what supposedly worked under the PRIist regime that, in all fairness, had it been so marvelous, would not have fallen as it did…

Democracy is inevitably conflictive; it generates uncertainty and opens spaces for the public and political participation of all social actors, including those who are undesirable. Democracy requires rules for it to be able to work, and these are the product of negotiations in which all of the actors relinquish the privileges of the old order in exchange for institutionalism: it is not a simple process, nor is it one lacking in contradictions. The old establishment attempted absolute control over minds and souls, and by this route, the suppression of conflict. As imperfect as our democracy may be, the opening inexorably entails the presence and involvement of indigenous and narco communities, the opinion makers and the politicians, businessmen and unions, leaders and citizens. What in the past appears not to have existed –because it was suppressed- is now an inherent part of the social debate. Therefore, the notion that an artificially created majority constitutes a solution is absurd: what is quashed in one space will reappear in another. In a certain manner, this is the main lesson learned from the Zapatista uprising: conflict exists and will surface in some form or another; if there are no institutional mechanisms for conflict to manifest itself, it will materialize in other, less attractive, behaviors or conduits.

The country is experiencing conflict in all of its ambits, many very sensitive. Differences in perspectives and clashes of interest are ubiquitous. Much of the disjointedness in which we live has deep roots in reality, a reality that is easy to thrust aside. For example, the underground economy perhaps employs at present an absolute majority of the urban workforce in the country. It can be claimed that the underground economy does not exist, but this does not nullify it, and, more importantly, it does not change the fact that the incentives for those who inhabit it are distinct from those belonging to the formal economy. It is here that Mexican society comes face to face with a little understood schism: on the one hand there is the formal economy (which includes professionals and bureaucrats on an equal par with the de facto powers), and the other, the underground economy (which incorporates narcos and street vendors, the latter extraordinarily vulnerable to the networks of corruption and violence of the former.

The solution to this state of affairs does not begin with legislation. Without an elementary political pact or arrangement that precedes any reform, no law will alter the reality. The underlying matter to resolve is how to channel the conflict and confer legitimacy upon the instruments of government, including those that assert the law on those refusing to be part of the political regime resulting from this arrangement. Denying the inevitability of conflict is tantamount to preserving the status quo.

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Earl Long, the three nonconsecutive-term populist governor and self-styled “last of the red hot poppas” of U.S. politics, once affirmed that “Someday Louisiana is gonna get good government. And they ain’t gonna like it.” I hope that, one day, we will have a good system of government in Mexico, but I fear that before being able to construct one, we would of necessity have to free ourselves from myriad myths, dogmas, and truths that are not true. Perhaps we could begin with themes such as our inability to develop a long-term view, so that the country would not have to reinvent itself every six years.

Our current governmental system was born after the Revolution and as a response to the Porfirio Díaz regime. Faced with the chaos in the wake of the Revolution, the National Revolutionary  Party (PNR), grandfather of the present PRI party, was built as a unifying structure of the political forces, groups, militias, and gangs of the moment, but above all, as a mechanism devoted to disciplining these contingents, structuring a system of government, and providing a sense of direction for the country. If one were to take a glance backward, it is evident that the PRI system stabilized the country and, employing virtually any instrument that it considered necessary at any given moment, afforded Mexico years of political peace during which the economy prospered.

But this system responded not only to the chaos of the moment, but also to the Porfirio Díaz government and its sequelae. In the constitutional structure of 1917, and later in the system established by Plutarco Elías-Calles, two principles were adopted that became the norm for Mexican political development for decades that, viewed in retrospect, have had atrocious effects. On the one hand, the system was founded on the principle of no-reelection, which instigated the revolutionary movement. Rejection of the despotism of the Porfiriato was transformed into a one-term system of government, a mechanism conceived of as a way to avoid perpetuation of power and to which the popular catch phrase “no ill can last six years” was consigned.

The second component of the PRIist system, also a response to the Porfirian government, was, as scholar Roger Hansen argued, the institutionalization of the Porfiriato: it eliminated permanent personalism and edified an institution capable of shaping Mexican politics. Perhaps our greatest problem today resides precisely in the manner in which PRIism imbued political continuity.

The no-reelection regime was developed with the objective of avoiding perpetuation of power. In this, the logic and imperative of history was evident and necessary. What this regime did not resolve, or rather, what it did in actuality engender, was the articulation of a system of incentives that in essence thwarts the country’s development. Perhaps this appears too harsh, but let us espy the inherent logic in the non-existence of reelection as viewed from both sides: that of the politician or public official, and that of the citizen.

A system without reelection perverts democracy because it concedes to it a limited period of government (three or six years, according to the office), within which the system has no responsibility at all. During this period, doings or undoings may be undertaken without accountability to anyone, without compliance with campaign promises, and without being required to confront the electorate for the latter to qualify by means of the vote. The structure of incentives deriving from no-reelection in effect removes the citizen from the political equation.

If we place ourselves in the shoes of the legislator, governor, politician, or civil servant, the logic of the six-year term creates perennial uncertainty regarding their subsequent job situation and obliges them to engage in the inexorable manufacture of our next post from nearly the day they get to where they are. In some cases, the search is limited to the political/electoral world, and the sole potential impropriety in which they could engage is to attempt to bias the results in favor of their party or their next electoral race. However, in many others, the system is party to the development of businesses of every ilk, as well as obscure agreements with the media, the unions, or the entrepreneurs. Presidents will be concerned with their legacies and with how they will be remembered by history, but all the rest permanently lie in wait.

The system is so perverse in this respect that no true civil service career has even been created that would confer continuity on public policy in excess of the six-year presidential term-of-office (and sometimes, not even that). While in other nations there is a senior civil service that in fact leads the management of government affairs, in Mexico we have entrusted tenderfeet with the most sensitive responsibilities. For example, no Parisian or Londoner would believe that a metropolis such a Mexico City does not have a city manager who remains independent from the political circuit.

But even more worrisome than these subtleties is the fact that no one is responsible for what transpires in the long term. A Canadian functionary who makes a decision today will most probably be around ten or twenty years from now and will pay the consequences if the decision made was found to be in error. In our case, the system eliminates people in wholesale fashion and releases them, for all practical purposes, from any responsibility.

Perhaps the greatest expense generated by this structure of incentives is that no one thinks in the long term; only individual career trajectories are constructed. Instead of decisions of State, with all of the considerations and consequences that these entail, decisions in Mexico tend to be makeshift, oriented toward what is expedient: they save the day at the moment, but do not solve the deep-rooted problem.

No-reelection has entertained the virtue of favoring the circulation of the political class, of accommodating groups, and of creating space for all of the currents of each party, but it has not impeded the consolidation in state governments of personages who are more appropriate to the feudal era, nor has it stopped sinister figures from going from post to post ad infinitum. The price of no-reelection has been immense. At the same time, installing it would not be easy precisely because of the deeply rooted species of feudalism that we have.

Some years ago, at an encounter between the Mexican and Brazilian presidents, I asked the Mexican Secretary of State what similar meetings there had been between the presidents of the two countries during prior presidential terms-of-office. His reply was that there was no registry, nor were there any minutes, of these presidential rendezvous. A system with no sense of State is also bereft of an institutional memory and does not back continuity of its personnel. This provokes poorly meditated decisions that translate into magical solutions, with the expected results. A country without counterweights ‒and a well-structured reelection system can be literally that‒ does not have the capacity to respond; thus, it becomes paralyzed and is prone to causing a crisis. It is time to begin to construct a real country.

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Competition is vital for efficient market functioning: without competition, there is permanent propensity for price growth, no incentive for improving the quality of goods and services, and innovation is inhibited. Without competition, an economy tends to stagnate, and the population lives in a state of harassment by rent-seeking businesses without even minimal interest in offering better products, prices, terms, or quality. The logic of promoting competition is absolute and transparent.

This is more complex in practice. Monopolies (or monopolistic practices) can only prevail as the result of three circumstances: the existence of “natural monopolies” (such as the electrical grid or railway distribution networks); the presence of legally sanctioned control of an activity or sector, as occurs with oil or electrical energy in Mexico; and the protection that is directly or indirectly conferred by the governmental regulations upon an enterprise or sector when these constitute virtually insurmountable barriers to entry that impede access to competitors.

Conceptually, there are three ways to control monopolistic activities: through legislation; by means of regulations, or through the sector’s being the property of and operated by the government. None of these is perfect. Enactment of antitrust law is costly and complex, and inexorably susceptible to abuse. Government monopolies always generate rent seekers, above all the labor unions. The majority of monopolistic practices are generated because companies capture the regulating authority and get it to produce regulations that protect and benefit the incumbents. Once these exist, they operate under the aegis of “what God has joined together, let no man put asunder.” The overwhelming majority of cases in the country in which anti-competitive practices endure derive from the regulatory framework. Thus, the efficient way to purge Mexico of its monopolies is by means of deregulation and radical modernization of the regulatory framework currently in effect. In addition, if we want a truly competitive economy, we are obliged to confront this same theme with respect to government monopolies.

George Stigler, an expert on the theme, said that the merits and advantages of a market economy have much less to do with the theoretical sustenance of competition than with the structure and organization of each specific market. Therefore, the key is to understand the regulatory framework’s origin and functioning. The corporatist structure that characterized Mexico’s economy and politics throughout a substantial part of the 20^th century was characterized by countless mechanisms committed to controlling unions, companies, and people. By the same token, it constructed a regulatory framework oriented toward the functioning of economic activity within the enclave of a closed economy. The government granted exclusive manufacturing or import licenses guided by the principle that industrial development would be promoted in this fashion. Independent of the results of the import substitution and control strategy, the scheme rendered businesses dependent on the government, because, through regulation, it determined their own viability and profitability. Therefore, it is not surprising that, due to its origin, the regulatory framework not only did not promote competition, but instead, it drove the creation of barriers to it: in fact, everything was done to protect companies from competition. Although many directives were eliminated when imports were liberalized, others persist and have multiplied.

Additionally, the anti-inflation pacts that were implemented in the 1980s entailed tight cooperation among businesses in each sector, since these concordats were based on agreement among producers to break the inertia of inflation. However, from the perspective of competition, doing away with inflation came at great expense, because companies became accustomed to communicate among themselves; thus, not to compete. This is another “sin” of our past that weighs heavily upon the present economic structure as well.

The combination of weak regulatory structure, institutions with little credibility, and “de facto powers” with veto capacity that are not subject to the exercise of any authority obliges us to conceive of novel and creative ways to advance competition in the country. Faced with a similar situation, at least in certain aspects, the European Union devised a regional competition authority. Something similar could be explored in our situation: a North American authority in this matter provided with the institutional strength, neutrality, and credibility necessary for successful operation.

The bill proposed by the Executive Branch to reform the law in matters of competition constitutes a significant improvement in that it takes steps toward professionalization of the Federal Competition Commission (COFECO). However, the initiative does not deal with the central problem: the fact that the entity retains its mix of prosecutorial and tribunal, that is, it is judge and jury, which creates a permanent inclination toward partiality. The absence of counterweight leads to excesses, starring roles, and decisions to act or not to act based on the preferences of the members of the Commission or those of its president, to a greater degree than to a detailed and defendable analysis proceeding from incontrovertible evidence. The current structure confers excessive discretional faculties on the COFECO president and poses no limits on the president’s playing field. A poorly understood autonomy and one without counterweights ends up being another de facto power.

At present, the sole resource that a defendant company possesses when faced by COFECO decisions is the amparo mechanism, a procedure that may take years to reach a conclusion. What is truly required is an effective counterweight that does not lend itself to delay tactics, but that does curb abuse. The ideal mechanism would be a Federal Tribunal that specializes in the matter without resort to the amparo, similar, in concept, to that currently taking place in the Federal Electoral Institute (IFE) and the Electoral Tribunal. This structure has proven to be efficient, to avoid protagonistic conduct, and to generate expedited decisions: both entities are cognizant of the fact that there is an institution of reference, which prods them into acting with the greatest of care.

The essence of the new bill resides in the possibility of imposing severe economic anc criminal penalties on businesses and their officials engaging in anti-competitive practices. Given our history, a qualitative change of this nature may have a good rationale, but cannot be advanced in the absence of an institutional equilibrium that guarantees impeccable, professional application of the law.  Without counterweights that work, a law of this nature would, of necessity, be inquisitorial.

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All of the surveys put it in first place. With over two years remaining until the presidential contest, surveys are, to a great extent, irrelevant, but the symbolism is clear, and what underlies the growth of the PRI in terms of popular preferences even more so. It is obvious that we should be preparing ourselves for the return of the PRI to power. What is not as obvious is that the PRIistas are ready.

A little while ago, I read an interesting story about Einstein that is applicable to the PRI. On one occasion, his students protested about the grades they were given on his examinations. Their protest was that the problems that they were called upon to solve were exactly the same as those in the exam of the year before. Well, yes, responded Einstein. The questions are identical. However, what you have to understand is that the answers have changed. Apocryphal or not, this story serves as a metaphor for the reality with which the return of the PRI could be accompanied.

The answers have changed, but it is not obvious that the PRIistas have understood this. If the PRI returns, it would be nothing more than a caricature of its former self, but its objective is to restore what existed before, beginning with the old-style presidency. The PRI that has escalated in the surveys is not different from the PRI of yesteryear, reformed and transformed: it has not been required to do anything more than wait for the lack of a vocation for government to quash their historical opposition.

What no one can deny is that today’s reality is not the same as that when the PRI was in power, and for this reason, the answers can not be the same. The relevant question at present should be: How should a modern country be constructed under the present circumstances? But the most prominent PRIistas in the contest are not asking themselves this: evidence shows them to be much more concerned with restoring their capacity for the imposition of former times than with developing novel and creative forms of governing with a vision of the future.

The defeat of the PRI in 2000 changed the reality of power because it decentralized it and was swiftly taken captive of by the governors, legislative leaders, and the “de facto powers”, which took on a life of their own at the fringes of, and beyond, the PRI. It will not be possible to restore the way it was before. As Lech Walesa declared shortly before the defeat that his party suffered at the hands of the old Polish Communist Party, it is not the same making fish soup from an aquarium as making an aquarium from fish soup. With all the advantages that it possesses, the PRI that would reappear would be structurally distinct from what it was.

The structure of power changed, but the country has not found an effective way to govern itself. Surely part of this has to do with the personal abilities of those responsible for driving the fate of the country, but a great deal is the result of the real dislocations that have taken place. The country has a poor governmental structure and lacks an effective system of checks and balances that plainly defines the spaces of action of each of the branches of government (thus, so many attempts at political reform directed toward biasing the rules in favor of one or another). An internecine struggle is taking place between those who desire perfection and those who want all of the benefits for themselves, ignoring the experience of multiple countries, which demonstrates that a country triumphs when the best possible arrangement that makes it work –rather than a perfect one- is achieved.

Unfortunately, none of the political forces, or the political potentates, is  thinking or operating under this logic. All want the presidency, and many are skewing everything to maintain their coteries of power in case they do not win. No one is developing a long-term view that constructs and sets the bases for a distinct country. The latter is particularly true of the PRI. More worried about returning to power than envisaging what to do afterward, they have sought to strengthen their territorial structure, but also to “correct” the “errors” of democracy, undermining and marking off the autonomous entities (such as the electoral institute and tribunal,  and Transparency), and promoting political reforms to match.

The country of today is no longer that of the era of PRI dreams in which all was internal negotiation and in which everyone, including the losers, came out winners. The Mexico of today is a very decentralized country in which the logic of the producers is that of their clients and markets, that of the governors is to feed their fiefdoms (and their wallets), and that of the run-of-the-mill Mexican, to attempt to survive. It is paradoxical that the PRIistas are so content with their conceivable return to the presidency with only 38% of the electoral preferences. What this tells me is that 62% of the population is not equally happy. The era of overwhelming majorities disappeared from the political map some time ago, and it is not probable that these will return, no matter how many stratagems are devised.

Surely there is no guarantee that the PRI will come into power again. Rather than a plan to return to, arrive at, or stay in power, respectively, for each of the large contending parties, what Mexico requires is a strategy of development that recognizes such a complex political reality. The pendulum moves because the population is fed up, but this, in turn, comes and goes.

The current reality is complex for two reasons: one, because the power is, in effect, decentralized, and those who hold it have distinct perceptions of the reality. For PRIistas, Mexico always was democratic, for PANistas democracy arrived in 2000, and for PRDistas, it has yet to arrive. Having a legislative majority does not resolve these differences, nor does it diminish the incentive to boycott and undermine the president. The other source of complexity comprises our possessing a dreadful institutional structure, and there is no reason to think that this would be any other way: cases such as that of Spain –where all the political forces came to an agreement to work together towards the transformation of the country- do not come about frequently. Therefore, instead of envisioning what will not come to pass, it would be much more productive to observe the few successful countries that have achieved a process of consolidation despite the absence of initial consensus.

India and Brazil are two good examples. We have been blinded for years to their changes, due to the attractiveness that the elegant solutions illustrated by Spain and Chile appear to be to us. But the success of these other countries should alert us to what really allowed them to emerge from their plight: leadership, and clarity of course. This powerful combination has come about in both cases: parties and presidents or prime ministers come and go, but both India and Brazil have experienced more than fifteen years with a sole development strategy each. Our failure does not lie in the impossibility of constructing a functional democracy, but rather in ignoring that what is important is that the economy advances to concede space to everything else. Whoever wins.

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Mexican politicians are an odd combination of conservatism and temerity. They have abstained from the actions and responses that have been needed for years, in part because Mexican society is very divided in terms of what to do, but also because leaders have not emerged who are able to head a project of prudent and reasonable change. Despite this, once in a while we witness examples of great daring, sudden decisions to act, as if celerity were an alternative to logical reasoning and the proper understanding of public affairs. The combination of inaction and intrepidness, besides its perversity, is, above all, risky because it is sustained in a self-serving and fallacious world view. Nothing good, nothing that contributes to the well-being of the life of the population, can ensue when the political class acts in such a manner.

We are entering into a process of debate concerning the type of political and institutional reforms that the country requires to be able to function. As is natural, the proposals that have been presented reflect contrasting stances. Certain politicians, beginning with the president and the PRI leader in the Senate, have issued strong and clear statements. Diverse analysts and observers have afforded valuable perspectives and evaluations on the costs and benefits of the distinct reform possibilities. All of these recognize something essential: the design of the institutions -the incentives that these harbor for those who direct and operate them, as well as for the citizenry- is the determining factor in the attainment or failure of the reform. Good design could open opportunities and generate positive responses, while poor design could translate into yet more paralysis.

In recent years, we have had vast opportunities to observe failed attempts at reform. The way in which the banks were privatized -with minimum capital requirements- led to their disastrous collapse some years later. The electoral reform of 2007 did not resolve electoral problems, and did, on the other hand, polarize the society. The structure and content of the reforms is key for the success of the latter; good intentions are not enough: the reverse is true in the reform process itself, in which it is fundamental to recognize that there are always opportunistic and abusive individuals who will make the worst possible use of the institutions. Consequently, it is crucial to meditate on the complete panorama and not be misled by fallacious or purely self-seeking conceptions of the reality.

The executive-legislative debate has focused its attention on a series of themes that would revamp the relationship between the two public powers. Among the topics under discussion, we find ratification of the cabinet by the senate, re-election of legislators and municipal presidents, and the constitution of an executive figure appointed by the legislative power: a cabinet head. Each of these themes would imply substantial reconformation of the political functioning of the country. Cabinet ratification would submit, for legislative consideration, the appointments, which have to date been the privilege of the executive branch. Re-election of legislators and municipal presidents would modify the relationship between legislators and voters, and would in turn transform the ties between candidates and parties; re-election of municipal presidents would change the relationship between voters and legislators and of these with their parties, altering the incentives of the administrative authority in closest proximity to the population to carry out longer-term projects, and above all, there would be someone responsible for project results. The creation of a semi-parliamentary Prime Ministerial figure, such as that in France, would change our presidential model by the roots.

Each of these themes and proposals merits serious discussion. As thoughts and ideas, they are exquisite, and permit us to imagine substantial alterations in the inducements that drive our politicians and representatives at present. However, none of these can be carried out in practice if they do not consider, and resolve, all of the perimeters that they entail.

The matter of re-election of legislators and municipal presidents is particularly sensitive. The advantages of re-election are many and eminently obvious. The absence of re-election engenders incentives for poor achievement and promotes the irresponsibility of the officials who enjoy -at least in formal terms- representation of the populace or those charged with local administration. From the citizens’ perspective, re-election would enable professionalization of legislators and municipal presidents, in order to empower both with a closeness to the citizenry, and would strengthen the permanence, all of this subject to voter decisions, of trustworthy officials savvy in issues that are key for the country. Although circulation of politicians in power has its benefits, it can in no way be compared with that produced by experienced legislators, who are able to be reliable counterparts within their immediate environment, as well as in the totality of public life. What is not obvious is whether any of these advantages would be achieved with the proposed reform.

As is everything in our sparse debate, the problem lies in the reality. In the real life of our country, the state governors own the electoral procedures, the nomination of candidates, and the flow of resources. A great project of institutional re-design could be shipwrecked at the most vulnerable point: that over which the governors exercise absolute control. Unfortunately, the governors own the political parties at the local level, dominate the distribution process of public funds, and control the state electoral institutes. Given this frame of reference, the notion that the citizenry would decide on the re-election of municipal presidents and legislators appears somewhat naive. It is not difficult to imagine the scenario in which re-election would become an instrument in the hands of the governors, so that, through the party, they would impose their preferences on who, and who not, to re-elect, for the sake of perpetuating their power: precisely contrariwise to what is proposed by the reform initiatives.

The true Mexico is much more unrelentless and complex than what is suggested by the ideas debates. The view that modifying one aspect, however crucial, of our political life would lead to a general transformation of the country is extraordinarily ingenuous. But it does not have to be this way: for example, as one part of the reforms, a National Election Institute could be created -an IFE, endowed with responsibility for elections in the country- with the purpose of protecting the candidates, restricting gubernatorial might, and providing a better opportunity for the success of a reform as ambitious as this one. Without this, the proposed reforms will do nothing but further tighten the noose.

Referring to the end of the Soviet Union, Solzhenitsyn wrote that “the revolution is an amalgam of former party officials, quasi-democratic KGB officers and black market operators that today concentrate power and represent a dirty hybrid never seen before.”

We in Mexico have our own fair collection of hybrids that explain many of the contrasts and gaps that characterize us. They also illustrate the limitations of any development project that does not include comprehensive solutions to our problems.

To begin with, Mexico seems to be the land of no definition. We prefer partial solutions rather than definitive actions. The phrase used by many lawyers in Mexico “it is better to have a bad deal than a good fight” is not only a common practice but a logical response to our circumstance. Except that this way of dealing with problems only works when the fundamental issues have been resolved, when there are structures and institutions that protect the decision process, when the contracts made are respected and they are used to protect the rights of all citizens. In the absence of an environment of this nature, half measures only bring about mediocre results.

 
Here’s a small sample of our hybrids:

1. Taxes are a world unto itself. In our country there are two types of citizens: those who pay taxes and those who enjoy exceptions and exemptions. The former live in a controlled world where their taxes are withheld even before they receive their income. They are citizens who, willingly or unwillingly fulfill their obligations to society and, by that fact, are continually besieged with more taxes. Alongside them, there is a wonderful hybrid; there is a world of exceptions, privileges and exemptions. Special tax regimes hide large incomes and low taxes. Many simply do not pay any tax and then get offended when a general VAT is proposed.

2. Teachers illustrate another of our exceptional hybrids: recently, the Ministry of Education introduced a system to hire based on a contest. Many of the people who applied for the new positions are teachers already at work who want a second “plaza” (tenured position), as well as aspiring teachers. The shocking thing is that the overwhelming majority of those already teaching who completed the exam failed and, yet, maintain their other, existing, position. Meanwhile, new applicants must pass the exam or remain unemployed. First and second class citizens.

3. The business world is made of two main groups: those subject to competition and those protected and sheltered. The former have had to change their ways to survive, while the second has become an burden on everyone else, preventing progress. Overall, industrial goods are subject to competition but not the services or goods produced by the government. How many companies have closed from the excessive costs imposed by the government on the activities and services on which their survival depends?

4. In the legislature we have two classes of congressmen and senators: those who are elected and those who are appointed. None represents the citizenry and, in our extremely peculiar idiosyncrasy, all owe their jobs to the party or governor who appoints them and not to the voting citizen.

5. Women live in a world of rules defined in an era when it was common for them to stay at home but the reality of their daily lives is one of hardship. However, virtually no public service is designed to fit their needs: schools, health services and transportation function as if women were equal to men in their daily responsibilities.

6. Although there are many reasons to be proud that there is greater transparency in public service, it is now exceedingly clear we still have  opaque unions, state and local governments as well as the legislative and judicial branches of power.

7. Public safety has demanded that the army gets involved in activities and responsibilities that are not part of their role and for which they were not trained. However, even with the backlash that their involvement has brought about, we still lack a modern police force able to replace the army. There is nothing more pathetic than the reluctance of governors to transform this fundamental aspect of their responsibility.

8.  State governors enjoy the great privilege of not being accountable to anyone, least of all to their local constituents. Instead of raising taxes in their home states, they prefer to press the federal government and squeeze Congress to raise their budget. Perhaps the biggest difference with Brazil is that in that country, they are able to raise a sum several times higher in property taxes than ours as a percentage of the GNP. Without accountability to citizens, spending is nothing more than an instrument of power and personal advancement. Mexico does not have a centralized or a federal system, but quite the opposite.

9.  The contrast between the federal electoral authorities (which, despite the 2007 Reform remain absolutely professional and neutral) and the state electoral institutes, almost all appointed by governors and their subordinates is quite clear. We have democracy in plots.

10. Maybe there isn’t a more pernicious hybrid than the one that characterizes our “mixed” economy where there is never any clarity regarding what is private and what is public, who appropriates the benefits of government spending and the benefits of the energy monsters, all at the expense of jobs and wealth that could create a truly competitive economy. Dysfunctional hybrids to serve particular interests.

Instead of general rules, egalitarian institutions and the realm of impartial laws, what we have instead is a world of patches that never fit together well. Some things work and some do not, but nobody seems to care. Hybrids allow two incompatible worlds to co-exist side by side: the abiding citizen who by conviction or because she has no choice and another one enjoying the exceptions that allow them to live in a world of impunity. A system of hybrids that preserves halftones and patronage, corruption and protection for a few while requiring the opposite for the majority, causes half efforts and inconsistent commitments that undermine the essential factor that drives any society: trust.

Many of our problems begin with this peculiar blend of responsibilities that no one assumes and that are the essence of the privilege and inequality that characterize the country. Originally, the current deadlock stems from the collusion of interests that enable these hybrids to be the norm rather than the exception.

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While we here in Mexico are, literally, eaten up inside by trifling infernos and washerwoman infighting, the world moves ahead with extraordinary celerity, creating and changing realities and futures in its wake. Whoever has observed the dynamic by means of which many of the pillars of worldwide stability have changed over the past two years could do nothing more than be astonished by everything that has been upended.

Following the sage advice of the great baseball player and manager Casey Stengel, who said “never make predictions, especially about the future”, I would like to share a series of observations on themes that are in our surroundings and that could affect us and oblige us to rethink what is important for our development. These are reflections on facts and tendencies whose sole common denominator is the depth and rapidity of the change that is taking place.

• The generalized perception is that we are overwhelmed by BRICs, the complex of countries identified by an investment bank as the most probable nations to achieve high growth rates in the coming years, i.e., Brazil; Russia; China, and India. However, as Macario Schettino aptly notes, the Mexican per-capita Gross internal product (GDP) is higher than that of three of these nations (the fourth, Russia), despite that our economy has grown much more slowly than these. This resolves nothing, but it obliges us to put our stagnation into perspective, which is certainly more mental than physical or economic.
• It is in vogue to see Brazil as the country that “did it”. However, it must be understood that while there is much that is enviable in the economic dynamic that it has acquired, the reasons for Brazil’s success are very concrete and its forthcoming risks are very real. In Brazil, several reforms have been carried out, and the Brazilians have been much more intelligent than we in some themes, for example, in the manner in which they privatized their telecommunications. But the main source of recent Brazilian success does not rest upon great reforms, but rather, on the clearsightedness and continuity of its leadership. The Brazilians have had two very distinct presidents in the last 15 years, but only one development strategy. Cardoso carried out reforms, the majority of which were less ambitious than ours, and Lula afforded them continuity. It is difficult to imagine two leaders so contrasting in ideology or in personality, but the success of their country resides in the intelligence that they had to do what was imperative, so that the second of them would be able to continue the project of the first, whether or not it would imply breaking the second’s campaign promises. Brazil has many outstanding industrial assets, including airplanes and machinery, but its recent exporting success lies in the apparently insatiable Chinese demand for raw material and foodstuffs. One question that is not at all irrelevant is what would happen on changing the tendencies in a country that has generated all of this demand for Brazilian goods?
• In the popular imaginary, China has become the world power -or threat- of the future. Within this context, it is interesting to listen to what is being said by Chinese Premier Wen Jia-bao, who has been unusually frank in warning of the risks of an economic collapse. Not long ago, he noted that “the greatest problem in the Chinese economy is that its growth is unstable, unbalanced, uncoordinated, and unsustainable”. More recently, a periodical quoted him as opposing new investment projects because there was an excess of investments that were creating a bubble and because the overwhelming majority of the stimulus package that his government organized has been used to subsidize banks and government enterprises, which cannot have another effect but to continue inflating the bubble. Although China has currency reserves upward of two trillion dollars, it cannot utilize these to solve the debt problem of its enterprises and banks because this would impede financing its buyers (essentially the U.S.). At the same time, China’s exports have diminished because its main client, the U.S., has been importing much less than before. To go from being a fundamentally exporting nation toward its internal market will have to occur in the next years, but it is not obvious that China will achieve this without mishaps. Recent evidence suggests that it will be very difficult for China to continue growing at the rhythm of the most recent decades, which would affect the rest of the world.
• The U.S. economy is changing swiftly. While some of its old industrial sectors languish, other recuperate, but what is most significant is the exceptional growth of activities that could become major indicators of its future growth, above all in matters of biotechnology, communications and other areas, such an innovation and technological development, in which the economic situation represents no restriction.

Perhaps the strangest thing in this entire scenario is the fact that we appear to be content with the panorama that encircles us, or, at least, resigned to our sluggishness. The political as well as the economic change taking place in our principal business partner, the U.S., (and in our main competitor, China) has enormous consequences for us and opens immense opportunities that no one appears to be contemplating. For example, the ever more quarrelsome nature of its trading strategies has been translated into conflicts and compensatory taxes on Chinese and Brazilian products that we probably could replace. The same is true in the area of health, an issue that has consumed more than one year of political debate in the U.S. and in which we could perhaps be part of the solution by offering U.S.-accredited health services at a lower cost. Despite this, we possess no strategy to seize the opportunities or, at least, to attempt to take advantage of them.

One way to overestimate our difficulties -as well as overestimating our partners and competitors- is to underestimate our assets. The Mexican economy has not grown considerably in per-capita terms during the last two decades, but the financial stability that has been achieved has enormous advantages, above all if we compare it with the crisis situation that other nations around us are experiencing and those that follow these will. Although we appear to be incapable of reaching it, the sources of success of other nations appear to be much more attainable than is commonly believed: with a few legislative and executive fixes, each within its own confines, Mexico could procure the initiation of a great transformation process. Brazil has shown that the most important thing for achieving this is to have convincing leadership, one with greater convictions than interests.

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“The devil is in the details” counsels an old refrain. In the case of the political reforms that are being debated at present in the public forum, something very peculiar has taken place: from a rotund negative for reform, we have proceeded to the logic that what is important is to approve a reform, any reform at all, independent of its content. As if it were a process of mass production, what is relevant is that Congress get the job done, not that the agenda contribute to improving the life of Mexicans, or, at the very least, to facilitating decision-making in the political system. This sounds more like an effort to satisfy the chorus than an attempt to transform and improve the system of government that we have.

What is important in a reform is the objective that it pursues and the probability that this objective will be achieved with the changes that are carried out. Changing just to change is not only senseless, but is also dangerous because it contributes to continuing to undermine the institutions, and, above all, because it can exert unanticipated effects that are much more damaging than the status quo. Worse yet when voices are few and interests are many.

In the abstract, many of the reforms proposed make absolute sense. But our history is rich in abstract discussions that on coming alight upon a law, a decision or the creation of an institution, frequently do not achieve the objective that these proposed. In the 19th century, many of the debates sustained by monarchists and republicans, liberals and conservatives regarding how the nature of the country desired was to be constructed, in many cases had more to do with the preference for imitating Europe or the U.S., respectively, than with understanding the reality of Mexico and responding to it. In a certain manner, the system that engendered the PRI was the first autochthonous response in more than an entire century of independent life.

The present discussion recalls much of the 19th century: the importance of adopting this or that institutional design because it functions well “there”. In stating this, I do not wish to suggest that Mexico is in any way a unique country, so distinct from the remainder of the human race that it cannot imitate or adapt successful institutions from other latitudes. Instead, my concern resides in the pretension of adopting institutions or institutional designs without adapting these to our reality. In too many cases, the proposals respond not to what works in other latitudes, but rather, to very-short-term electoral and political calculations. When this is the tonic, it would be better to begin by negotiating deep-rooted political agreements among the actors themselves rather than to bring about legislative processes that will never be fulfilled or that, from the out start, will never enjoy full legitimacy.

There are, of course, diverse reform proposals that possess all the sense in the world and that certainly would enjoy broad agreement. For example, who could object that the line of succession be precisely defined, in black and white, in the case of “absolute” absence of the President of the Republic, a theme that, for explicable reasons (more than one President was assassinated to make way for his Vice President…), the Constitution never achieved.

On the other hand, there are proposals that simply have no reason to be. The notion of converting the Public Prosecutor into an autonomous entity not only has no beginning or end conceptually or in the existing reality, but also can even be extremely destructive. The Public Prosecutor must respond to the State authority, whether it be the Executive (as in the case of the Attorney General (PGR) at present), or to the Judiciary, or to both (as in the U.S.), but not to itself. I share the idea that it is fundamental to end the monopoly of penal action in order to professionalize and de-politicize the office of the Public Prosecutor, but that would not be equivalent to leaving it to its leisure. Can someone imagine that would occur with a Chapa-Bezanilla (a former Public Prosecutor that was inspired by his own vendettas) without a boss or control?

Some of the proposed reforms have sense in the abstract, but clash with reality. In a democratic and civilized country, one would expect that the Cabinet would be ratified by the Senate. But Mexico has not reached this stage of development, and ratification could become a negotiation process aimed less at developing a proper check on presidential power than at limiting the president’s powers through the back door. This is the perfect example of the type of reform that is necessary but that is not conceivable until broad and profound agreement has intervened concerning power: how it is distributed; how it is recognized, and how it is legitimized. In the absence of this, the only thing that would be achieved would be heightened paralysis, or the de facto transfer of the executive power to the Senate.

There are reforms that possess no greater purpose than that of satisfying the critics and faultfinders. Reducing the size of the legislative chambers cannot, nor should it, be an objective in itself. It would first be relevant to respond to questions such as whether the type of hybrid that produces the direct and proportional election is adequate for our circumstances, whether a Senate should have a component of proportionality, or whether the present distance between the legislative power and the citizenry contributes to better government. Setting our sights on the numbers implies beginning at the end and obviating the themes at the core: accountability; who nominates -in real life- the candidates; and what is the best way to distribute responsibilities, monies, all of this within a framework of broad legitimacy. None of the proposed reforms advances in this direction.

What is important does not lie in the specifics of the reforms, but rather, in the fact that the rationality that lies behind these is greatly concerned with the short-term political calculations of the relevant actors (calculations that could well include satisfying the critics), and has very little to do with the construction of a better decision-making process, with a fairer and more effective system of government, and above all, in a framework within which the population can develop and enjoy the benefits of their own efforts. None of this appears in the reform proposals.

It is not necessary to regress too far in time to observe the manner in which a reform process set forth in the abstract and without recognition of the day-to-day reality can end in disaster. Many of the economic reforms and privatizations of the 80s and 90s sounded logical and sensible, but the required scaffolding was never constructed: the details for these to be successful. As in the fairy tale Alice in Wonderland, the entire country entered into a process of transformation that, with few exceptions, many extraordinarily positive and important (like NAFTA), did not end well.

As Charles De Gaulle would have said, reforms are too important to be left in the hands of politicians. There are times at which paralysis is not the worst that could be happening.

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