The Aftermath of the Berlin Wall—and Mexico’s Missing Lesson

January 3, 2026

Luis Rubio

The fall of the Berlin Wall in 1989 freed the nations of Eastern Europe from the Soviet bloc, to which they had been bound since the end of World War II. That moment created a unique opportunity to observe how each of these “new” nations adapted to an entirely different political, economic, and geopolitical reality. Thirty-five years later, the contrasts could not be starker. Some countries transformed themselves and advanced rapidly; others stalled or fell behind.

Take Poland and Hungary as an example. In 1990, Poland’s per capita GDP (in constant PPP terms) stood at $13,000; by 2023, it had risen to $44,000. Hungary, in the same period, went from $21,400 to $40,700—a notably slower pace of progress. The difference? A combination of clear-headed leadership and sound public policy.

Measured by that yardstick, Mexico has suffered from the opposite mix: poor leadership and bad policies. The consequences of that disastrous combination cannot be but tragic.

Leszek Balcerowicz, the Polish prime minister who led his country’s post-communist reforms, once said that “most problems are the result of a bad politics,” because “even if they are angels in the government—which is not the case—if there is not a counterbalance in the form of proponents of limited government, then there will be a shift toward more statism and, ultimately, into stagnation and crisis.”

France’s experience over the past few years illustrates the nature of this problem, though under very different circumstances. While Mexico’s ruling party has consolidated power and can impose its will in Congress with no constraints, France has seen five prime ministers in just two years—one of which lasted only fourteen hours in office. French political analyst Marc Chevallier* reflects on the roots of this instability. First, he notes, the Fifth Republic—founded in 1958—was designed “to govern, not to deliberate,” and thus only functions properly when a single party controls parliament. Second, “in France compromise is considered a weakness.” And third, the country is “smitten with ideology, one that prefers ideas to reality.” Consequently, says Chevallier, the political class strives to satisfy intellectual elites rather than meet the needs of ordinary citizens—an arrangement he characterizes as an absence of common sense.

Much of what Chevallier describes can also be observed in the behavior of Mexico’s ruling party, Morena. The lack of functioning opposition has allowed it to impose the preferences of the government—or the dominant factions within the party—without restraint. Recent months have shown how this dynamic works in practice: the judicial reform was implemented with “guides” to signal the path of righteousness; the amparo law was gutted; and the revenue law was passed—all without meaningful debate or consideration of their potential consequences. The government’s objectives and intentions are clear enough and presented without embarrassment, but intentions matter far less than outcomes—and those remain to be seen.

The contrast between Peña Nieto’s administration and the “Second Floor” of the Fourth Transformation (4T) is instructive. Peña craved the spotlight, imagining himself as Mexico’s great reformer. President Sheinbaum and her party, by contrast, prefer the shadows and more modest goals. Yet both managed to pass their bills without debate or dissent. The cost of Peña’s approach is now evident: virtually none of his flagship reforms have survived. Why, then, should the current government’s initiatives fare any differently? The absence of open deliberation—rooted in both Mexico’s monopolistic political culture and the erosion of institutional checks and balances—has consequences that will, inevitably, manifest in time.

Part of the problem lies in Morena’s internal contradiction of goals. On one hand, its political-ideological agenda drives it toward measures such as judicial reform and the virtual elimination of the amparo. On the other, its fiscal needs require private investment to generate new sources of public revenue. These aims may not have seemed incompatible back in the 1970s—the formative era for most of Morena’s leadership—but today they are entirely irreconcilable. That tension perhaps explains the voracious approach embedded in the 2026 revenue law: however much the government may wish for greater investment, it implicitly acknowledges that it will not materialize.

As this new year begins, it would be worth the government’s while to ask itself whether its strategy is sustainable—even on its own terms. A project that depends on popular support yet produces benefits only for its nomenklatura, for favored contractors, and for the bureaucracy seems unlikely to yield a stable equilibrium.

* France’s common sense vacuum