According to Ambrose Bierce, a famous satirical writer of the nineteenth century, alliances are “the union of two thieves who have their hands so deeply inserted in each other’s pockets that they cannot separately plunder a third.” Now that we are in electoral-alliances season, Bierce is worth remembering not only for his wry appreciation of life and wit, but also because of the comedy that characterizes this discussion in our country.
Alliances and coalitions are the bread and butter of parliamentary politics. But in Mexico they have taken amazing dimensions. Here go some thoughts, considerations and opinions:

1.  PAN (Partido Accion Nacional) members are divided on the idea of an alliance with the PRD (Partido Revolucion Democratica) and other parties, particularly the PT (Partido del Trabajo), because they think they belong to a different social class. For its part, the PRD, already fractured into two large blocks, can’t decide what is better: an alliance with its archrival or to continue being in the opposition.

2.    The members of PRI (Partido Revolucionario Institucional) have no doubts: for them the potential alliance between their opponents is “perverse” and “unnatural”, presumably because PAN and PRD do not recognize each other as a legitimate political player (“fascists” say some members of the PRD about PAN; “a danger to the country” say members of PAN about PRD). However, behind the PRI’s stance one can see the concern that a potential alliance, even one that is not altogether saintly, could undermine some of its state strongholds such as Oaxaca, Puebla and Veracruz.

3.    By definition, the aim of an electoral alliance is to defeat a more powerful opponent. In countries with multiparty systems, especially those characterized by run-offs (such as France where there is a proliferation of parties and candidates before the first round that go on to build alliances and coalitions in order to win in the second round), or parliamentary systems with low thresholds for access to parliament, alliances and coalitions are the daily bread of politics. For over sixty years Holland has not had a government without a coalition because no party has reached an absolute majority: alliances are the element that makes it possible to constitute a government.

4.    The problem with such partnerships in Mexico is that our parties do not perceive each other as equals, as partners in a process of nation building. They see each other more like enemies than as adversaries capable of joining efforts, except when it comes to defeating the PRI. In one word, there is an obvious contradiction between want is fundamental and what is comforting.

5.    It is clear that the agendas of the PAN and PRD are different, because if they were not they would be the same party. The problem is not that their agendas differ but that they don’t inhabit the same planet. If their differences were only about social or economic policy, an alliance could help mend differences and develop common ground, such as is the case in all modern democracies. Their differences on abortion or homosexuality are important in terms of partisan philosophy, but they would not necessarily exclude an electoral alliance in which they all agreed not to address those issues. In any event the issues of social policy that divide them are mostly not relevant outside Mexico City, so the notion of building an electoral coalition for other states cannot be dismissed on such grounds.

6.    Electoral alliances have two stages: one is aimed at elections and another at governing. When two or more parties form a coalition they do so because that is the best way to advance their projects and strengthen their electoral and political position. In our context, the first aim, winning an election, has proven successful in several instances; but when it comes to governing, what has happened is that the party of the candidate who won ends up governing and excludes the rest. The experience in this area is extensive and almost overwhelming: the alliances and coalitions in Mexico are always temporary and limited to the specific goal of winning an election. Is it worth it?

7.    The parties that participated in the winning coalition but did not provide the successful candidate become alienated from the daily exercise of power. Those within the parties who oppose this type of opportunistic alliances argue that someone else always enjoys the benefits. The truth is that if there are several simultaneous elections in which the same parties coalesce and the distribution of nominations is equitable, none should feel are left on the fringes. Much more serious, relevant and interesting are the concerns of those who envision the possibility of failure, even if a coalition seemed formidable and likely to win at the outset of an electoral process. Where are the parties left after a failed election?  If instead of obtaining an overwhelming victory as they had hoped, they end defeated, could this lead to a self fulfilling prophesy that delivers the whole country to the PRI in the presidential elections of 2012?

8.    It is obvious that the only goal shared by the PAN and the PRD in the proposed alliance is to defeat the PRI. There is nothing inherently evil in a coalition that pursues an aim of this nature. It could be argued that at least one of the reasons why democracy has not flourished in Mexico is precisely because of the strength of the pre modern strongholds enjoyed by the PRI in several states, starting with the southeast. Under this line of reasoning, the PRI’s defeat would have the effect of fragmenting power at the state level, just as it has happened at the federal level. In this context the potential benefit of disabling those fiefdoms would seems quite clear. However, it is also understandable that even in the most benign scenario of victory, the costs would not be unimportant. As pyrrhic a victory as the current legislature has had in passing the president’s bills (or almost any bills), all of those passed were due to the existing understandings, whether explicit or implied, between the PRI and PAN, both of which accept the legitimacy of the other. Could the proposed PAN-PRD coalitions endanger the only factor that has allowed the country to be governed over the past few years? This is not an argument meant to reject the idea of these alliances, merely a description of the bigger picture.

9.    What really matters is whether there is a deeper content to the proposed alliances designed to defeat PRI. Defeating PRI might be a desirable goal, but it is not the relevant one from the perspective of the citizenship. Many members of the PAN viscerally reject an alliance with PRD in Oaxaca on the grounds that it would mean bringing into the coalition a series of radical organizations that paralyzed that state three years ago and do not recognize President Calderon. Put in this vein, it would clearly make no sense to proceed. However, what if the real goal were to be deeper? What if an alliance like the proposed one advanced towards bringing all political actors, including these organizations, into the institutional side of politics? The benefits would then be immense.

10. In stark contrast with the nature of coalitions in truly democratic nations, an alliance such as those proposed must be appreciated for what they are: an attempt to change the rules of competition and control within the political system. If they are successful in overthrowing some of the PRI feudal strongholds, they would bring oxygen to the system and also to the modern side of PRI that has been unable to reform the party even if its leaders are unwilling to admit it. However, the only relevant benefit for the citizens would be to start building a common agenda to develop the country. That would really seem “unnatural.”

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Saint Augustine said that time is present in three facets: the present, as we experience it; the past, as present memory, and the future, as present expectation. For President Calderón, time is ever shorter, and what is not already built today cannot be harvested, whether after or during his 6-year term of office. Given the manner the current government has evolved and the complexity of the era in which we live, the President must define himself with full clarity: whether he will employ the time left to him in an attempt for his political party to win the upcoming 2012 election, or to confront the problems beleaguering the country. At this point, it is no longer possible to accomplish both.

This is decision time. The time to think, plan, and sow has gone by. Although the presidential term comprises solely 6 years, the political dynamic is not divided into two halves. At its initiation, a government has time to set forth its plans, to place them on track, and to trust that it will be able to harvest these before the end of the term. After the mid-point, which in political terms is marked by the federal elections, the country enters into electioneering dynamic in which everything is defined in terms of the next presidential contest. Each and every theme in Mexico is measured and appraised in light of its potential impact on the approaching joust.

Throughout history, Mexican presidents have done what they could in their first three years in office, and thereafter have devoted themselves to prepare for their succession. During the PRI era, this implied positioning their chips in competent arenas, negotiating with the diverse interest groups, and attempting to drive their preferred candidate. They engaged in the latter by means of innumerable mechanisms: programs with dedicatory and implicit support, transferences, and subsidies for the projects or themes that would benefit the specific individual and similar others. The sole example of the PAN era, Vicente Fox, displayed deficient learning from the PRI system: President Fox supposed that only by his desiring it, everything would come together for the benefit of his anointed one. But, as we well know, the candidate in another’s court won. Due to his way of acting, as President and as Ex-president, Fox was left with the two assets with which he began: his charisma, and the defeat of the PRI. His presidency not only credited nothing to his merits, but also subtracted from these.

President Calderón has had to deal with a much more complex period. From its precipitative initiation to the international crisis, his government has bounced back and forth. Incapable of delegating authority to competent people, it has solely accomplished what its extremely narrow margin of control permits. All of this has earned him relatively low popularity, great disapproval in key sectors, groups, and persons, and very few achievements upon which to secure his personal and political future. Because of his personality, Calderón tends to exclude rather than to include, to alienate rather than to co-opt. His critics may be very ignorant, but they are not always wrong.

He is now caught in the clutches of time. We are at 20 months of defining the presidential candidates and at 1½ years of the next election. The President must define whether he will maintain course, which could well translate into a defeat for the PAN, potentially at the hands of the PRI, or whether he will redefine his project. If he opts to follow the traditional logic—to devote himself to ensuring the election of his favored candidate— he will abdicate all possibility of advancing any reform agenda and achievement for the country. A defeat by the PAN would nearly be ensured. If, on the other hand, he redefines his project, he will be presented with the opportunity of making a difference that would place him on a new personal platform at the end of his term. This is not a minor dilemma. The theme is political, but also personal, i.e., how he wishes to be perceived by history: as a president who, whoever wins, left a better country, or as one who resolutely persisted in a failed project.

Although there is nothing definitive in politics—Yogi Berra, the famous baseball player, is quoted as observing “It ain’t over ’til it’s over”—current tendencies do not favor the governmental party. The wear-and-tear is patent; conflicts at the interior of the PAN are rising; young people have lost faith, and more importantly, there is not much that the current government has at hand that would allow us to suppose that it will glean something relevant in the next 30 months. What was not sown in timely fashion can no longer translate into political or electoral benefits.

This circumstance will force the president to measure his own strengths and possibilities. To devote himself to driving a potential successor would constitute a mainly risky venture, and it would even be possible to argue that it would contribute to the candidate’s defeat. The experience of Calderón himself is relevant here: a good part of the credibility that led him to win the 2006 election was concerned precisely with the fact that he was legitimately able to situate himself as independent of Fox. The worst of all worlds for Calderón would be that in which he persists in nominating and in making his candidate the winner of the election, only to end in defeat and permanent ostracism himself. It would be better for him to pledge his future to something transforming that, ironically, could be salubrious for his party.

The alternative would be to imitate the manner in which Ernesto Zedillo conducted himself during the second half of his presidential mandate. Instead of devoting himself to the PRI political grid or fervently espousing a determined candidate, Zedillo opted for a great electoral reform, in which he assumed himself to be Head of State, and not a PRIista. This distinction was key to the success of the 1996 reform, which led to the successive electoral and political transformations experienced by the country. Zedillo was able to accomplish this because he decided that the country was more important than the PRI, and this allowed him to negotiate with PRI party members with an endowment of freedom and credibility that no individual committed to a short-term electoral result could confer upon him.

The theme for Calderón would not be electoral in ilk, but the dilemma is exactly the same. His alternative lies in being solely one more PANista come to naught and perdition, or in becoming a Head of State who drives political and financial reforms that permit him to bequeath a transforming, generational legacy that anchors the future of the country to a new stage of opportunity. The problem is that both things cannot be done, because he would not possess the credibility necessary to achieve robust negotiation of the radical changes that the country requires in the political-institutional dimension, as well as in that of income and expenditure. Both are transcendental matters of power that do not coalesce well with short-term party partisan interest. It is decision time.

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In one of the great battles of history, at Cannae in southern Italy, Hannibal the Carthaginian general almost defeated the most powerful and disciplined army in history, the Roman legion. His army, stationed a few days from Rome, could have easily gone on to conquer the city, but Hannibal hesitated. At that, Maharbal, his best general and cavalry commander said: “Hannibal, you know how to achieve victory but you do not know how to use it.” In recent months, the same holds true for President Calderon.

The country is at an impasse that calls for decisive action. Yet our political establishment is paralyzed. Those in charge of deciding and acting are not doing so. Those who are responsible, given our system of separation of powers, of assessing and ratifying or changing the proposals put forth by the executive are going to great lengths to criticize what exists without providing any alternative susceptible of unlocking the current gridlock. The milieu we live in is full of great ideas and suggestions that none of those that are in a position of authority are prepared to push forward. Myths dominate and interests and privileges are the glue that keeps them together. No country can function like this.

A complex time for our economy such as this, both national and global,  a time in which opportunities and threats to the country’s development are being forged,  all we get from our politicians is constant bickering over the budget and the tax snafu that consumed the Legislature for months during last year. While the country needs answers geared towards the future, the perspective of our political leaders is rooted in the past: on what the country was but can no longer be.

Even though large resources were spent (e.g. at the beginning of this decade the governors consumed more than one hundred billion dollars of additional revenue due to high oil prices), very little of this has had a positive impact on the growth rate of the economy as a whole. Instead of investing in the future, our politicians -government and opposition, but most especially the governors- consumed our resources with unusual gluttony. They spend and waste, and the only aggrandizement they can show for is their own self image (and sometimes not even that). They have used government resources to promote themselves and not to improve people’s livelihoods.

The country urgently needs investment, the development of new engines of growth and a strategy that enables both. While the dream of promoting growth through credit and deficit spending is swarming the environment, the truth is that there is no alternative to private investment. Even if it were desirable for the country to go into debt, credit is not available in the amounts that would be needed to jump-start the economy. Moreover, deficit spending would mean more demand which, as we’ve seen over and over in the past decades, would quickly exhaust installed capacity, thus lead to more imports, which in turn would generate a currency crisis. In any case, the government –the current one and all since 1970– has shown a complete inability to generate growth through spending the public purse. Investment will come from the private sector or it won’t come at all.

Investment can come from two sources: from national capital and/or from abroad. The engines of growth can only result from two types of sources: large investment projects promoted by the government for private investors to develop; or those that might result from a new type of association with the new leading sectors of the U.S. economy, those that become successful from the ongoing structural transformation that the U.S. economy today. The strategy to make this possible should include three essential features: a) the open, active and determined promotion of private investment; b) the development of major infrastructure projects that generate domestic sources of demand, especially in the country’s poorest regions; and c) the organization and negotiation of a development agenda with the United States that opens up development opportunities and activates sectors and economic activities to satisfy the demand generated by the American economy. This could include health, education, transportation, technology, energy, and the whole regulatory apparatus required to implement this strategy. The opportunities are there. The question is whether we are willing to turn them into sources of growth, and that depends entirely on us.

As long as this does not happen, until we do not eradicate the myths and sources of permanent distrust and misunderstanding that paralyze us, we will have to limit ourselves to what we have and this, as we know well, does not yield positive results. There is no reason to expect that things will change by themselves, without a fundamental shift in the way our politicians think: ahead and towards the future. An anecdote recounts that when the president visited China he mentioned to the prime minister that our government was very interested in Chinese investment in Mexico. Smiling, and very gently, the prime minister replied: “…they always confuse us, Mr. President, we are Chinese. The kamikaze are Japanese…. ”

Nobody will invest in Mexico while we continue doing all that is needed to repudiate investment. Nobody will take us into account until we know what we want and the politicians succeed in bringing the people behind them. Nobody will see us as more than a lost cause until we are ready to build the scaffolding needed to focus towards development. As the anecdote illustrates, nobody is willing to invest where there are no opportunities, where taxes change daily, where insecurity, both physical and patrimonial, is so high, and where politicians live off the treasury without ever worrying about the country’s development.

If we want to get ourselves out of the rut we are in we must begin to break down the myths that paralyze us. For example, this would entail rethinking the energy issue (including, of course, oil) as a source of opportunity and not as a museum piece at the service of the union and inefficiency. It would also imply the  need to begin privatizing government-held assets that do not contribute to national development. Above all, we have to acknowledge our own paralysis and the fact that it is not the fault of one person, as important as he or she may be, but of all the political interests that are more concerned about protecting privileges than making ours a viable country.

The start of a new year is always a good time to reflect and zero in our batteries, and this would be a good place to start.

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One of the things that impresses me most of the legislative and political processes in all societies is the inevitable contrast between solving problems, finding solutions and the programs or enforceable laws that result from the tortuous process of negotiation. Typically, at the beginning, the proposal or bill tends to be coherent and directly aimed at the issue being addressed, but once it goes through the negotiation process it ends up being less coherent and, in many cases, often falls short of fixing the problem. Sometimes, when the architects of a project try to anticipate critics or opponents, even their first proposal becomes incoherent, tortuous and too complicated. Perhaps there is no alternative, but I keep asking myself what is the point of alleged solutions that have no chance of solving the problem.

Examples abound: we have the highly commended energy reform that has neither a chance to improve the oil monster’s performance or its productivity. There is also the project for a new refinery without it being obvious that there will be oil to refine or that in any case, it would be a profitable venture.

The same could be said of the proposal to reform the Mexican political institutions that the PRI has brought forward in the Senate, starting with the idea of reducing the number of sits by proportional representation in the lower house of Congress. In a system of popular representation, what should exist is a proximity between the representative and the represented. The reform proposals that are beginning to be discussed in the Senate include the possibility of reelection, which would seem to support that purpose. However, to preserve the system of proportional representation, what is advanced on the one hand is backtracked on the other, even if the total number of members of Congress diminishes. The hybrid that characterizes us (what we have right now is 300 by direct representation deputies and 200 by proportionality) hinders accountability and creates a distance between the citizens and the so called representatives. Unless this is the ultimate goal, it would be better to have a system of pure direct representation with redistricting so that all parties have a reasonable chance of achieving presence in the legislature or, in a less optimal scenario, have a system of full proportionality. If the objective is in fact to find a solution, it would be best to get it right from the beginning.

Many of the proposed solutions do not address the underlying problem. Although the rationale is to strengthen institutional structures (certainly a laudable goal), many of the initiatives assume that there is institutional strength rather than attempt to accomplish precisely that. For example, no one can object the proposal to ratify some key members of the presidential cabinet. However, when our main problem is institutional weakness, this proposal would only further weaken the presidency and, therefore, the country’s governance.

Perhaps the main issue at hand is that there is no full recognition that, following the defeat of the PRI in 2000, the country experienced a radical change in the reality of political power, and there has not been an institutional reorganization that meets the new realities. Once “divorced” from the PRI, the presidency becomes flimsy, not only viewed under our own historical standards, but even compared with other nations similar to ours. In the same vein, the actual structure of power has placed state governors at the center of the system, along with the leaders of the political parties. The initiatives being proposed do not seek more than a further weakening of the presidency without improving its ability to act and to govern.

In a country lacking strong institutions that are credible and respectable (and worse, a country prone to undermining those that come close to this paradigm), the notion of incorporating such figures as the referendum and the revocation of mandate, while both politically correct, entails an almost personalized inscription that can always backfire on the promoters of such initiatives. In any case, the latter are clearly instruments of power and not visionary proposals for institutional strengthening. They assume that all political actors would behave in an honest and institutional fashion in a time of crisis. As citizens, we should be very skeptical of such an approach: after what we have experienced in the past decades, at least from 1994 to the present and without forgetting the year 2006, can anyone construe this is as a valid assumption?

At heart, the problem is not the specific proposals or the prospect that in fact realistic and reasonable solutions are put forth. The problem lies in the fact that the frame of reference continues being the struggle for power and not the construction of a new political system, a system that turns the development of the country as a whole into a viable option. We are talking about an introspective and interested vision rather than a broad and ambitious approach of a generation of politicians thinking about the future.

Many of the proposals contained in the draft entitled “the eight Rs of the PRI” touch the core issues, but the approach taken is not meant to build a modern country, but to distribute power in the here and now, along with various specific retaliation schemes against concrete political enemies. Framed like this, the project is not conducive to strengthening the political system or the transformation of the country.

What is wrong is the approach and the apparent ulterior motive, not the concept itself: focused in a different way, the same concepts, or many of them, could become transformational.

For example, one could think not in weakening the presidency but in building a new presidential institution with the attributes that a modern country requires and with a view towards achieving effectiveness in government together with a system of checks and balances. Along the same lines, one could revise relations among the three powers of government, define areas of responsibility, and create institutional, and effective, dispute-settlement mechanisms. The use of money, one of the most contentious issues in recent years, could be framed within a new institutional context where an autonomous entity reviews the budget and creates mechanisms to make the executive (at all levels of government) accountable. The autonomous and independent entities also require upgrading, but with the aim to strengthen them as sources of balance, not as sources of submission.

In other words, the same core project could become a development factor if only these projects focused on building a trans-generational approach. The beginning of the year is a good time to start.

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Nobody can ignore the social inequality that Mexico suffers nor scorn the human cost that it represents or the huge missed opportunity that its sheer existence entails. Inequality goes hand in hand with poverty but it is not the same: they coexist and are the result of structural and historical circumstances. Although it is impossible to change history, the experience around the world is that there are means to combat poverty and to mitigate, if not quite eliminate, the causes of inequality. In fact in recent decades, poverty has diminished by more than 80% around the world. Although something similar has also taken place in Mexico, it is quite obvious that its absolute dimensions are still enormous.

From an analytical standpoint, there are two ways of conceptualizing the problem of poverty and inequality: one is blaming the problem on history and the other is building mechanisms that can in fact reduce it. Both approaches were clearly exemplified in the 2006 elections. In that race it was clear that the country has a contradictory perception of the way in which these ailments have to be addressed. Some take a moral perspective and seek to solve their qualms with historical complaints (along the way attacking the foundations and wisdom of the economic policy that has been pursued in recent years), while others seek ways to correct problems, reduce social costs and attack the more severe manifestations of poverty and inequality.

What is clear of the last several years is that poverty can be reduced, but the obstacles are formidable, not because government policies have been unsuccessful but because the number of obstacles to their implementation are enormous. While it is possible to imagine different ways to tackle social ailments like poverty and inequality, there are proven mechanisms that allow us to discern between quackery (such as increasing public spending or imposing trade restrictions) and appropriate policies to address the problem (including macroeconomic stability and a targeted social policy).

Education is by far the most important mechanism to combat inequality. The experience in this area is overwhelming and quite obvious: children from poorer and disadvantaged families lag behind and have no access to good teachers, the educational programs are not the right ones and what is often called “education” is not much more than a veiled mechanism aimed at controlling people and preserving a system of subordination. All we need to do is compare the overwhelming differences between rural and urban, and public and private, education to recognize a source of abysmal inequality. Many countries face serious problems of inequality; the difference between those that are developed or actually moving in that direction and those that are still relatively poor and backward is that the former have created educational mechanisms so that any child, regardless of social or economic background, has the same chance of making it in life.

The issue is not just Mexican. In his recent book, “The bottom billion,” Paul Collier analyzes what has happened in the world lately. A professor of economics at Oxford, Collier studies the evolution of poverty and inequality in and concludes that a group of countries that endorsed globalization achieved dramatic reductions in poverty. These countries implemented mechanisms aimed at increasing access to education, extending the reach of the most modern infrastructure and procuring equalization of opportunities, an improvement that benefited more than 80% of the world population. The question Collier asks is why the remaining billion people have not improved in any way. His focus is on sub-Saharan African nations, but his analysis can be extrapolated to other nations suffering from similar problems.

According to Collier, the central problem in nations where poverty persists is the political struggle between reformers and corrupt leaders and bosses: where the latter win poverty increases. His analysis shows that the causes of failure in these nations becomes evident in the form of development traps, myths built to protect vested interests and, often, a strong dependence on natural resources. A bit like Lopez Velarde (a Mexican poet of the 19^th century), Collier argues that natural resources tend to distort a nation’s economy and facilitate the longevity of bad governments. A bad government may consist of just that (corrupt officials), but sometimes it has to do with all the factors involved in preserving the status quo that hinders a direct attack at the root causes of poverty.

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Despite his orthodox economic approach, Collier’s book has the great courage of defying both Tyrian and Trojan. For the economically unorthodox he argues that their solutions (stop paying the debt, engage in high public-spending programs, or link inflation with growth) are counterproductive and potentially catastrophic. Any Mexican who was aware at least of the 1995 crisis could not doubt the veracity of this assertion. But Collier also chastises the orthodox: for him, trade, despite its huge overall benefits, is unlikely to benefit the poorest, whose commercial skills are limited. That does not mean, he goes on, that trade should be constrained; rather, his point is that there is a need to seek other means to attack poverty.

Education is particularly prominent among the proposals that Collier advances. An effective government must be able to break the hindrances –social, cultural and political- to ensure that the poor have the same opportunities as the rest of society. The author also proposes a much more aggressive intervention for the poorest nations, including the imposition of European Union sanctions (including direct intervention) to guaranty that measures are implemented against corruption and respect for property rights

One conclusion that is inescapable from this book is that there are no easy ways out for poverty and inequality, but that success in combating these evils is not impossible because the strategies for achieving this are known and available to anyone truly willing to seek them out.  Poverty exists because of political interests that benefit from the status quo. The devil’s holy scriptures of Lopez Velarde end up meeting with Lampedusa (who argued that everything much change so that everything remains the same) to create a corrupt system designed so that nothing changes.

Stalin once said that people who place their vote in the ballot box do not decide anything. According to the Soviet dictator, the true decision makers are the ones who count the votes. The reconfiguration of the IFE (Federal Electoral Institute) in the mid-nineties sought to respond to a quasi-Stalinist reality: the hypothetical Mexican democracy conveyed no certainty to the contenders. With the integration of a citizen-led IFE, Mexican democracy began to flourish in the electoral arena. The IFE achieved what seemed impossible: win the confidence of the electorate. But Mexican democracy was not designed for the citizens.

In current Mexican politics, sovereignty lies with political parties. It is there where the current wrongs we are now experiencing were first shaped. Electoral processes did not need repairs or adjustments because they were fulfilling their objective: the campaigns worked, the media abandoned the historical bias that characterized the system for decades (indeed, the election of 2006 was the most equitable of our history), and vote counting was impeccable, as shown by all the assessments done after the election that year. Regardless, in 2007 the parties launched an electoral reform aimed at controlling the IFE, punish the media and regulate even the most modest procedures in electoral matters.

The 2007 reform would have made Stalin proud. The IFE’s autonomy was left astray, while public debate, electoral propaganda and the freedom to express opinions regarding the election would also be severely restricted. The IFE went from being an independent arbitrator to become a mere audit tool. Now, the IFE’s concerns are no longer centered on the fairness of the election but on the content of the political messages, the duration of spots and the imposition of fines and censorship to a growing number of political actors. In fact in another Stalinist outburst, anybody can now be prosecuted for electoral crimes. Many party leaders themselves have begun to worry about the Frankenstein they had created.

In fact, we are only reaping what was sown. The problem is that those who seeded were planning to regain control of the electoral process and maintain limited access to power, i.e., reduce the freedom of both the IFE and the public. And that is the underlying issue: in Mexican democracy the citizen is nothing more than a mere spectator. Instead of being the heart and raison d’être of politics and elections, its role is to legitimize the outcome, not to use the vote as an instrument, influence the way legislators act or decide who their representatives should be.

Seen from another perspective, the successive electoral reforms may have been inadequate, misleading or awkward, but they were attempts to respond to a complex reality: the old presidential system was dying and Mexico was in urgent need of institutions capable of replacing its functions. A strong presidency made it possible to compensate the onslaught of special interests (including what is now, in the post-presidential system, known as “de facto powers”) and kept at bay various potentially risky players (from guerrillas to drug traffickers). With this I don’t mean to suggest that the presidential chair of that time was infallible, benign or just. But in retrospect it seems clear that the inherent strength that accompanied it served as a counterweight to the institutional weakness that was really behind the appearance of strength vis-à-vis the rest of political actors.

In the absence of that old presidency, the country has to start shaping new institutional mechanisms to restore control over criminal organizations, counter the excesses of governors and make everyday politics viable. In short, Mexico’s real vulnerability lies in the fact that the institutions we have are inadequate to the deal with the formidable challenges they face and too weak to enable effective governance. The PRI dreams to return to the presidency but aside from having better skills for political leadership (no small feat), they could only reconstitute the old centralized system of control that they long for through a set of fundamental institutional reforms. In other words, it is not an issue of an individual’s ability.

This is the main issue: gaining control of the IFE is part of a process designed to recentralize power. It is an attempt to go about building the scaffolding of a strong government capable of decisive action. Along these lines, surely some initiatives consistent with this objective will be seen in the coming months and years. What is not obvious is the feasibility of the re-centralization of power.

The electoral reforms that led to the establishment of an autonomous IFE in the 1990s were not the product of the goodness of the PRI’s political system or the generosity of a president, but more or less ambitious responses to a tangible reality. Specifically, the then opposition parties had managed not only discredit the PRI and its presidents, but jeopardize the government in every election. The electoral issue is just one example of the gaps, increasingly more frequent, between the national reality and its institutions. Mexican society (citizens and interest groups) was challenging the PRI’s legitimacy; the pressures exercised by the governors were undermining presidential power; and local and regional conflicts made it increasingly more difficult to control the country.

The substantive point is that the old centralized structure cannot be reconstituted. Just as centralized power in the old Soviet Union was dismantled, the Mexican reality forced the dismantling of the old presidential power. Just like the political parties and the self-serving electoral reform that they passed, in Russia today one can see the restoration of centralized government, not as powerful as the old one, but certainly more than the one witnessed at the end of the Soviet era. Despite the apparent success in those latitudes, the members of the PRI and the PRD that dream with recreating the old system cannot ignore that Putin without oil is like Lopez Portillo in 1982.

Mexico requires institutions that safeguard the country and afford it functionality, not regulation and control mechanisms founded on a rear-view contraption of a not very glorious past. Above all, the country needs means for the citizens to actively work on mechanisms that limit the propensity to abuse that was at the core of the last electoral reform.

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“Flash 18” was the code that a policeman once gave a friend of mine so that nobody would stop her again for having failed to take her car to the twice yearly pollution test. After threatening to take her to the police station, the motorcyclist offered her the traditional alternative: for a small fee he would forgo the traffic ticket and avoid the discomfort, but would also give her a code so that if any other police officer stopped her on that same day, he or she would let her go. The notion that the rule of law can be brought to bear and enforced in a society that already has more laws in the books that nobody can (or will) comply with is utterly absurd. The real question is how in fact this reality could be changed.

The situations of illegality that every ordinary citizen faces on a daily basis are endless. So are the attempts to correct or resolve these problems. For example, in traffic issues, we have had mayors or heads of government that have sought to criminalize any abnormal behavior, as much as those that have forbade their police to impose any fine. The problem that both face is the same and the fact that they have tried opposite solutions shows frustration vis-a-vis reality. In a city where there are no good traffic signs, where in fact it is impossible to comply with all traffic regulations by the very nature of the urban jungle in which we live, the notion of penalizing any violation of the regulation is absurd and lends itself to all sorts of abuse and corruption. The alternative, not to impose any fines, is total surrender:  the authority relinquishing all responsibility.

Some municipalities have opted to negotiate with the anomalies. In Naucalpan, a municipality next to Mexico City, the authorities negotiated with the “viene viene” (the name comes from the words “easy-easy, easy-easy” they use to help people park), men and women who serve a vital function in the absence of spaces for public parking. Local authorities asked them to register and submit to authority. Similarly, the cranes in the service of the city’s government have arrangements with the “franeleros” (called that way for the red flannel they carry to wash cars) of the city. In other words, rather than attempting to enforce the laws and regulations, the very authorities have legalized this modus Vivendi, thus accepting the existence of surreptitious parallel authorities and arrangements. If this is not corruption nothing is. Actions of this nature may solve the immediate problem, but they also imply succumbing, instead of acting as an authority: if you cannot beat, better join them.

The underlying problem is that these are all partial, temporary solutions, and, more importantly, they go against the possibility of building a society of institutionalized rules that allow every citizen to know where he or she stands and what are their rights and obligations. Workarounds like the aforementioned not only undermine the role of authority, but create an environment of irresponsibility and uncertainty. Some will use this lack of rules to commit abuses (as is the case with the informal economy), while others will not be willing to invest in the absence of security, the uncertainty inherent to the law and regulations, and the absolute unwillingness of the authority to enforce them.

None of these problems is new, but it is no use to assert that they are a colonial legacy. The problem is not where the problems come from, even though it might be interesting to know their origin, but to find ways to eliminate them. For decades, perhaps centuries, the country has been working to try to resolve them without actually doing anything: new laws are approved or new regulations are announced but still nothing happens. The problem is clearly not one of laws but of the unwillingness or inability of respective authorities to enforce them. And often, the laws themselves violate the basic rights of citizens, which is hardly an incentive for the people to see them as legitimate.

Some might say it is a cultural problem (“Mexicans are rebellious by nature”), while others might claim that this is a question of immutable traditions. But there are positive examples of transformation in the country, as seen in the northern state of Chihuahua, a state plagued by crime, that suggest that solutions exist if the problem of lack of continuity in the structures of authority is resolved, together with the lack of agreement on the rules that must be enforced.

The lack of continuity in the structures of authority is perhaps one of our greatest vices, one that is also the source of the weakness of our institutions. A new leader takes office, full of spirit. The first thing he does is to repave all the streets in town, starts to tackle the main issues and sometimes finds a successful way to solve a serious problem (as has occurred intermittently in the case of crime), but then he goes on to seek his fortune elsewhere and leaves everything hanging. The next administration comes full of vigor to fight with the former one and does something completely different. Works are left unfinished, projects have no continuity and the whole cycle starts anew. The worst part is that there is nothing the citizens can do about it.

The other side of the coin is the lack of agreement among those in power that are responsible for making decisions: there is no continuity because there is no agreement or incentive for one to exist. Historically, governments come as a gang dedicated to exploit the spoils and that means they do not want any rules to limit them, and alternation of parties in government has not changed this pattern. Sticking to an institutional structure would involve accepting that there are limits to rapacity and that is anathema in the context of the old political system that, unfortunately, has not disappeared, but that “perfects” itself daily.

The history of legality in various countries and societies is not linked to culture or to the existence of an impressive police and judicial apparatus. Countries that have been able to establish legality as a mechanism to regulate life among citizens and guaranty respect for their rights, are those that have succeeded in making society, but especially the politicians and representatives of the people, accept the legal framework as a valid one. This can be seen both in the theories of Rousseau and Locke, as well as in political agreements like the Moncloa Pacts, whereby all Spanish political parties accepted the existing legal framework as a foundation for future development. What matters is that there is a commitment to adhere to a regulatory framework. The Spanish case illustrates that what is important is not the content but the fact: Spain accepted the existent frameworl because the alternative would have been chaos. Using the Moncloa Pacts as a starting point, Spaniards began to change their laws but from within the institutions that recognized the initial covenants. At heart, what Mexico needs is a great political overhaul that makes it possible to adopt a legal framework to which we will all submit ourselves.

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It is time to legalize the informal sector of the economy. For decades, we have lived in the fictitious world that claims that the real world, the good world, and the statistically relevant world is that of the formal, duly registered economy. Reality however, tells us otherwise. The informal economy is dynamic and employs millions of Mexicans that, in truth, are modern and competitive entrepreneurs, all of them willing to assume risks and satisfy their customers. The informal economy is real and is there for all to see. It is time to see life from a different perspective.

Now that taxes are being discussed, why not change the equation? Why not find the way to really pay the taxes that are already in the books, but not with more sanctions, but with less bureaucracy.

Let’s start with the obvious: formality is a bore, if not bureaucratic death. Formality was designed, if that term can be used, for large companies, those able to manage and process the myriad of requirements and regulations involved in the formal economy. Although costly, a large company can devote a small army of accountants and lawyers to register companies, pay taxes, obtain (and renew!) digital signatures, get deductions back, validate receipts and, God forbid, make sure an invoice is still valid (surely a major cause of tax evasion).

No small or startup business can comply with that string of requirements and monthly payments. The sheer weight of regulation renders it ineffective. Given the situation of having to register with the SAT (Tax Administration Service), the Mexican Institute of Social Security (IMSS) and other federal and local bureaucracies, a person who, by decision or lack of options, chooses self-employment, the next logical step is to opt for informality. Moreover, people that chose to live in the informal sector do not live badly either: he or she has access to health insurance (Seguro Popular), which is cheaper than the IMSS and (amazingly) is designed for those who are not part of the formal economy. If his or her daughter wants a scholarship at the UNAM (the National Autonomous University), informality allows them to argue that their income does not exceed the maximum permissible because there is no way to check. In sum, it would appear that living in the world of informality is like paradise compared to the bureaucratic tangle involved in the alternative.

It might seem that informality is benign and free of cost, but this is obviously not the case. Instead of paying taxes, people living in informality have to bribe inspectors, rely on moneylenders and speculators because they are unable to show proof of their income to have access to bank credits; instead of legal certainty they live in a permanent limbo that prevents them from growing even if they have a promising business; they are always stalked by politicians eager to sell favors, develop dependency relationships of patronage and control the flock. Informality can be hell.

Although there is no consensus among scholars of informality, it seems clear that there are certain prototypical characteristics among those living in the informal economy. There is no doubt that a person in the informal sector is willing to take risks in order to improve his or her financial situation. This element immediately sets them apart from those who choose a secure employment, with the many benefits that come associated, even if that means less potential for development. Assuming that a person consciously chooses informality, she knows she is entering a difficult world where life is earned every day of the week and where there are no paid holidays or social protection. Those that do so hope they will achieve a higher income throughout their life. Empirical evidence suggests that most of those who operate in the informal sector are in fact financially more successful.

Speaking of informality often brings to mind the image of a vendor on the street, one of many that sell their wares (from popsicles to meringues), contraband or any type of furniture and objects, as well as food. But informality is infinitely greater, ranging from manufacturers of pirated discs to plumbers, carpenters or distributors of goods next to food vendors at construction sites, those selling juice (some on huge truck racks) and bicycle renters in parks. In addition to all these actors of our everyday national life, there are a number of activities that are prominent in the informal sector. The common denominator is not tax evasion, although it is undoubtedly a universal feature in that world, but the courage, the drive for self-improvement and willingness to take risks. That is, these are the entrepreneurs that Joseph Schumpeter, the great economist of the first half of the twentieth century, might have described.

Formal entrepreneurs tend to despise informal ones, while the latter reject any association with the term “empresario” while, in practice, that is exactly what they are. But the fact that there is this axiological opposition says a lot about our social and political reality. What matters is that everyone can grow and produce for their own benefit as well as that of the country as a whole

The underlying theme is that, on the one hand, formality is not paying off in terms of employment or economic growth while, on the other, informality is hampering the growth of individuals and their businesses and nothing has been done to facilitate their inclusion in the formal economy. In practice, this means that the sector in the economy that could be potentially more dynamic is castrated, while the one that is given full recognition, is not yielding enough growth or the income taxes that the country needs. It’s time to reverse the pyramid and that means understanding and recognizing the dynamics of informality and adjusting the bureaucratic and regulatory paradigm to make it possible for those in the informal economy to cease being there, without annihilating them along the way.

COLOPHON. Far from my nature or purpose is to write an apology on behalf of informality. Obviously, I am not proposing to turning to small, unproductive shops as an alternative to a modern, thriving economy. The objective is no to strengthen or to promote the growth of tiny “changarros”, small, unviable shops, and even less to argur for privileging tax evasion. The opposite: our formal structure not only impedes growth, but makes it impossible to develop a large sector of the economy that, with suitable incentives, could add a exceptional dynamism and value to our economy. With the insertion of the informal sector in the formal economy, in the context of a rational tax structure, perhaps with the 2% that was recently proposed, the Treasury would be the big winner without having to kill the goose that lays the golden eggs. Countries showing the highest rates of economic growth have been able to resolve this mess better than we have and their citizens have better lives.

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Years ago, in a rural area near Calcutta, I watched fascinated a Hindu priest leading a worship ceremony of a cow. The devotee spent hours feeding the animal flower petals and washing its body as if it were a deity. It was a touching scene. In Mexico we have many sacred cows -from oil to no reelection, including a whole range of other issues- but perhaps none has had such a high impact in recent years as the famous “political cost” that politicians invoke when they want to avoid deciding on just about anything.

Political cost has become a virtual deus ex machina, an argument out of nowhere that serves to explain and, above all, to justify just about anything. Because of the alleged political cost, nothing can be reformed or changed. By the magic wand of the alleged political costs, fundamental issues such as the rules governing energy or the urgent need to re conceive tax policy are simply untouchable. Although it is clear that many of the actions, decisions and reforms the country needs entail political costs, it is also true that the term has become an excuse for not doing anything.

Any change or reform inevitably affects people and interests; otherwise there would be no issue. The very idea of reform involves changing the status quo and that, by definition, involves changes in the distribution of costs and benefits. Our problem is that everything is focused on the costs and none is focused on the benefits. The consequence of this attitude is that we are permanently betting on the short term. Instead of carefully evaluating the potential benefits of a particular reform or for legislators and government officials to articulate a communications strategy and develop a stakeholder base for reform and, at the very least, to defend their position and be able to act, everything leads to inaction.

Under that logic, the result cannot be any different from the usual one: the preservation of the status quo which, in our reality, implies ensuring that poverty, privilege and other calamities that characterize the country remain forever. James Freeman Clarke coined the famous phrase that “a politician thinks of the next election — a statesman, of the next generation.” Judging with that yardstick, our politicians have become mere echoes of phrases, negotiators of business interests and careful advocates of the existing order. Instead of investing in a different future -personal, partisan and national- they are staring into the rearview mirror to make sure nobody can ever accuse them of affecting anyone not even touching them even with a rose petal.

Conjuring political cost  as a defense of inaction hides not only an unwillingness to act, but also a deep conservatism that borders on reactionary politics. While that may be understandable in established parties of the right, the phenomenon is also observable in the leftist PRD (Partido de la Revolucion Democrática): in sharp contrast to the modern European left, our PRD members oppose any change with the same vehemence that their peers from other parties. Interesting coincidence: all of them swear by paralysis, no matter the cost it entails.

The case of the VAT is particularly striking. PRI members claim they oppose any change in the value added tax because the changes adopted in 1995 (when the tax was raised from 10% to 15% in the middle of a terrible recession) had resulted in the loss of their legislative majority in 1997 and of the presidency in 2000. It might seem clear that if one drew a direct causal line between the decision made on that tax and the profile of votes, this conclusion might be justified. It is also true that the PAN, in one more of its audacious electoral tricks aimed at the very short term, capitalized on the image of PRI members as they partied after passing that law.

However, if one looks at the big picture, the perspective is much more complex. In 1995, when the VAT was approved, the Mexican economy shrank by almost 7% and inflation surpassed 50%. Moreover, these circumstances took place within an exceptional environment in which, for the first time in history, vast numbers of middle-class families had borrowed to buy houses, cars and various consumer goods. The economic contraction resulted in severe loss of jobs and income for millions of Mexicans, while interest rates exceeded 100%. Countless families who felt the country was finally “turning upward” towards development suddenly saw their dreams shattered. Many of these families lost their homes, many others their car and almost all faced all kinds of family disruption.

Politically, the economic crisis came together with a key conflict within the PRI ranks where traditional politicians reclaimed the leadership of the party, displacing the technocrats that had ruled the country since 1982. Although, in economic terms, the development strategy pursued by the Zedillo administration was very similar to that of its two predecessors, the bitter criticism that it aimed at them brought about a deep internal split that only now, without the technocrats, is beginning to heal.

From this perspective, it is absurd to blame PRI’s electoral disaster in 1997 and 2000 on the increase in the VAT. By the mid 1990’s, the PRI had been losing popular support and its legitimacy was increasingly being questioned. For the average Mexican citizen the economic catastrophe of 1995 was infinitely more expensive and imposing than the increased tax rates. As soon as a structure for electoral fairness was put in place (which happened with the so-called 1996 political reform), the population voted against the party which had done nothing but produce one crisis after another since 1970. In all this, the VAT was nothing more than a minor distraction. But for the PRI, the issue of the VAT as the cause of their loss became a myth, a revealed truth that lives on.

For me the obvious lesson of the second half of the nineties is that the governing party increases its vulnerability every time that its actions (or promises) produce a crisis or when the people believe that a crisis can result. On the issue of government finances the Mexican people long ago learned the lesson that fiscal irresponsibility (that the PRI is once again proposing) is much more costly than an increase in the VAT, especially if the rationale for a tax increase is duly and clearly explained and losers are compensated along the road.

The cost of not undertaking the reforms the country needs is every more costly because its absence prevents the economy from growing at an accelerated pace. The paralysis in the country is due not to the VAT but to the myth of “political cost” that serves as an excuse to protect interests and “sacred cows”, both much more pernicious to voters than the risk inherent in reform.

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A legend, allegedly concocted by Voltaire, tells that Isaac Newton formulated his law of gravity when an apple fell on his head and wondered “why did the apple fall?.” Ipso facto his theory was born. Centuries later, the PAN (Partido Accion Nacional) is bent on defying Newton’s law. Instead of devoting themselves to the complex problems of government and, if they wanted to, to assess their recent failures, the panistas are bent on acting a party permanently in the opposition.

The PAN lost its way on two occasions and for two almost opposite reasons: one for having no strategy and another for its excessive rigidity. The first time happened in 2001 when the new PAN administration had the opportunity to redefine the Mexican political system and lay the foundation for a truly democratic change, but the then president, Vicente Fox, proved unable to understand the magnitude of his own success: the forces that were unleashed by the defeat of the PRI or the changes in structure of power that would take place as a consequence. The second took place this year during the midterm elections where the government and its party were lost in their own prejudices, ignoring the dynamic of an intermediate electoral process. Both promise to be defining moments for the future of the country and of the PAN.

Mexicans of the present generation will never get to understand how was it possible for Fox to squander the golden opportunity created by the 2000 election to dismantle the PRI’s power structure. Upon reaching the presidency, Fox had the chance to negotiate a democratic transition that could transcend the electoral dimension. The moment was not only auspicious, but exquisite for two reasons: as could be seen that night at the Angel, the people, including those who did not vote for the PAN, were all behind the new government, eager to enter a new stage in the country’s history. The other reason was key in terms of timing: PRI members were biting their nails off, terrified of being jailed for corruption charges or for any other reason stored in their collective conscience. They were ready and willing to negotiate almost anything.

We can only dream now about what could have been the content of such a pact, but what is clear is that they could have exchanged the sins of the past for a new future. Fox could have proposed an agreement that would lead to a restructuring of the sources of power in exchange for the legitimacy of those involved and peace for society. How much would have been possible is a matter of fiction at this point, but the missed opportunity was monumental. The PAN government initiated the first non-PRI administration imitating the PRI: instead of changing the government, they mimicked it. Today the PAN is increasingly more alike the PRI but without the skills to govern.

Instead of taking the giant leap, Fox was content to sit in the presidential chair and give Sebastian Guillen, aka Subcomandante Marcos, media control. The PAN, embodied in its president, displayed the great limitation of not having experienced senior managers in their ranks. Nine years later, the PAN continues to display an incredible inability to create them.

If Fox came to power without strategy and vision, the second PAN government, headed by Felipe Calderon, arrived with the opposite attitude: to control everything to the point of excluding everybody other than those personally loyal to the president, regardless of competence. The recent mid-term election is a good example of the consequences of wanting to exert total control. While the PRI articulated a regional strategy for each of the states and districts of the country (because Sonora and its wine orchards is not the same as Oaxaca with its indigenous traditions), the PAN adopted a single national strategy. This made sense in the presidential race where candidates have a national, almost universal presence, but is an absurd strategy when it involves a regional or local dynamic: citizens expect relevant answers to their circumstances. The PRI gave ample promises (and plenty of goods), while the PAN handed criticism to the PRI. The PAN’s loss was its own doing. Looking forward towards 2010 and 2012, there is no reason to believe its performance will be different.

PAN was born as a party of citizens and for the citizenry. Its birth was a reaction to the party of the revolution and an invitation to develop a strong citizenry. Seventy years later, the PAN seems divided, unable to understand power and citizens are deserting it. Their internal feuds, incredibly ideological, are incomprehensible to most voters. Their inability to govern effectively is astonishing. As the recent budget cycle put in evidence, it was the PAN that undermined the president’s bill. Their internecine quarrels as the ruling party, in addition to being expensive and stupid, are striking. What was tolerable nine years ago today has become untenable. There is perhaps no better indicator of the new challenge facing the PAN than the young voters, those that had never voted before: almost none of their votes went to the PAN

The PAN has two options: one is to continue digging its grave in the form of internal bickering, parochial conflicts and rejection of power and their own president; the other is to start building a party of and for power, but from the perspective of its origins: the citizen. The first path, the one it has chosen since assuming office, will inevitably lead to the scaffold. That is the way extremist, and very powerful, groups that conform the party are leading it in a way that is irreconcilable with real politics, the politics of power, where negotiating with all legitimate political forces is a point of departure. Perhaps the young people who in 2009 voted for the Green Party or other options did so because of intense advertising, but it is also possible they did so because they no longer see in the PAN an option capable of governing the country.

The alternative for the PAN is to redefine itself in terms of power: find an arena that allows it to reconcile its original base, the citizen, with the realities of power. Its natural inclination is schizophrenic: on the one hand to repudiate the government while, on the other, negotiating political reforms that imply a betrayal of the citizenship, such as happened in the latest electoral reform and is now being attempted in other political bills. The PAN will never win a presidential election if it remains unable to offer a real choice of power on behalf of the citizenry. Its dilemma is a simple one: the PRI will always be preferable if the PAN strives to be as the PRI but with no ability to govern. The PAN has to show it can govern or it will go back to what appears to satisfy the spirits of its traditional contingents: the opposition.

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