Can El Presidente Pull It Off?

Monday, July 30, 2001

Vicente Fox’s July 2000 victory in Mexico’s presidential election ended the reign of the world’s longest-ruling party, the Institutional Revolutionary Party (PRI). Fox’s victory at the polls signaled to the Mexican population that peaceful political transitions were possible in Mexico. Fox’s victory also brought with it the hope that he would be able to reform Mexico’s political and economic institutions. Indeed, he campaigned on the basis that he would end corruption in government, restore economic growth, invest in education, end the Chiapas insurgency, and move toward making all of the institutions in society more genuinely democratic.

Fox’s expectations, and those of the Mexican population, were very high. These expectations have, unfortunately, turned out to be far more difficult to meet than either Fox or Mexico’s voters initially thought. In fact, without a series of reforms to the Mexican Constitution that would change the basic electoral rules in Mexico, any future Mexican president may find that his legislative agenda is unobtainable.

The "Perfect" Dictatorship of the Past

From 1929 to 2000 every Mexican president came from the PRI. This feat was accomplished by vote buying, control over the news media, intimidation, and outright fraud. In order to create a semblance of democracy, however, Mexico’s electoral rules specified that two-thirds of senators and members of Congress would represent one-seat districts (voters have one vote, and the candidate with the most votes wins the seat) and one-third would be allocated by proportional representation (parties are allocated seats based on their percentage of the total vote). Proportional representation allowed smaller parties to gain some seats (had all elections been on the basis of one-seat districts, there would have been virtually no opposition representation in Congress). This mix of electoral systems meant that the PRI—despite its overwhelming majorities in the Chamber of Deputies (the lower house) and the Senate—could point to a minority opposition and maintain that Mexico was pluralist and democratic.

One key to the durability of this system was that the PRI controlled a huge patronage machine, at the center of which sat the president. This gave the president tremendous control over the Chamber and the Senate because Mexico’s electoral rules limit legislators to one term in office. Because legislators could not be reelected, they zigzagged between positions in the country’s bloated federal bureaucracy; positions in government-owned businesses (the so-called parastate companies, which spanned hoteling, steel, airlines, railroads, and so on); and governorships and positions in state legislatures and Congress. The ability of PRI politicians to move back and forth among various federal jobs, however, was contingent on the support of the president. In short, the president could easily punish members of his own party if they chose to oppose him.

Fox faces a variety of obstacles. His party does not have a majority in either house of Congress. Neither of his party’s two major competitors is interested in forming a coalition. And he doesn’t control his own party.

This electoral system meant that Mexico’s president had almost limitless authority and discretion. Constitutionally, Mexico has a bicameral legislature that balances the federal executive (much like the United States). As a practical matter, however, the Chamber and the Senate never voted against the president. The result was a "perfect dictatorship": Congress rubber-stamped proposals made by the president, and the president chose his own successor.

The PRI finally saw its power erode in the 1990s because of three fundamental changes in Mexico. First, the PRI lost the ability to produce economic growth. Since 1982 Mexican average incomes have persistently declined. Second, the attempt by President Carlos Salinas (1988–94) to reverse economic decline by opening up the economy weakened the party’s political control. NAFTA, for example, created a new class of businesspeople dependent not on the state’s favors but on their ability to compete internationally. Third, a wave of assassinations, prompted by PRI infighting, and the outbreak of the insurgency in Chiapas led many Mexicans to see the PRI not as a cure for the country’s prior history of endemic political instability but as a source of future disorder and violence.

The result was victory for Fox, who ran on the ticket of the conservative National Action Party (PAN). Because Mexico’s president had reigned as a de facto dictator for so long, the expectation was that Fox would be able to quickly and effectively tackle all of the country’s problems. Unlike his PRI predecessors, however, Fox does not have limitless authority and discretion. He must move legislation through Congress, which is turning out to be very difficult indeed.

Deadlock

The fundamental problem is threefold. First, Fox’s party does not have a majority in either house of Congress. The PAN holds 46 of 128 seats in the Senate and 207 of 500 seats in the Chamber. Second, neither of its two major competitors is interested in forming a coalition. The PRI, which controls 60 seats in the Senate and 211 in the Chamber, is fighting for its life as a viable party and must regain the presidency in 2006 in order to stay in the game. Its strategy, therefore, is to frustrate Fox’s reforms, so as to delegitimate the PAN in the eyes of Mexican voters. The Party of the Democratic Revolution (PRD), an amalgamation of various left parties, which holds 15 seats in the Senate and 52 in the Chamber, fears that forming a coalition with the PAN will undercut its ability to portray itself as a populist party. In fact, one of Fox’s major proposals is a tax reform that would raise the country’s value-added tax in order to obtain the funds necessary to carry out needed improvements in education and other areas. The PRD cannot, given its populist base, support the tax bill. Third, Fox does not control his own party. Within the PAN he is considered something of an outsider: a charismatic businessman who ran on the PAN ticket for governor of the state of Guanajuato and then for president. In point of fact, his own party opposed the indigenous rights bill that Fox championed in order to end the Chiapas rebellion, ultimately watering down many of its provisions to the point that the final bill was not acceptable to the Zapatista rebels. The rebels have therefore continued their insurgency.

The U.S. economy is not giving Fox any help either. One of Fox’s most important pledges during his presidential campaign was that he was going to make the Mexican economy grow by 7 percent a year. Even under the best of circumstances that would be a heroic task, and Mexico does not currently face the best external circumstances. Thirty-four percent of Mexican GDP is generated by exports (one of the highest export/GDP ratios in the world). Eighty-nine percent of Mexican exports go to the United States. Moreover, 88 percent of these exports are manufactured products, many of which are strongly sensitive to downturns in the U.S. business cycle. For example, 14 percent of Mexican exports are automobiles and automobile parts, products that are extremely sensitive to recessions. In short, the slowing of growth in the United States will almost certainly cause a slowdown in the rate of growth of the Mexican economy. This will inevitably undercut Fox’s campaign promises about jump-starting the economy.

Fox has responded to these problems by using his considerable charisma to pitch his reform agenda directly to the Mexican people. He has been perhaps the most media-conscious president in Mexico’s history, appearing on television and radio with incredible frequency and traveling around the country in a manner unthinkable to previous Mexican presidents. This has made him immensely popular in Mexico, but that does not translate into the ability to influence recalcitrant members of Congress because Fox has no way to turn his popularity into a mechanism to reward legislators who support his proposals and to punish legislators who vote against them. The most powerful weapon a president has—the ability to campaign for a legislator seeking reelection—is not available because there are strict term limits.

Reforming the System

In the long run, steps could be taken to break the deadlock. The first reform would be to end term limits. This would give the president the ability to influence members of Congress because he could campaign for those who support his legislative agenda. The second reform would be to end Mexico’s mixed system of one-seat districts and proportional representation. Eliminating proportional voting would result in third parties dropping out of the game, thus producing an equilibrium in which one of Mexico’s three major parties would no longer exist, raising the probability that the president’s party would also have a majority in Congress.

Electoral reforms of this type would require constitutional amendments, which need a positive vote by two-thirds of Congress. Attaining such a supermajority is not unthinkable. First, every member of Congress in Mexico now has an obvious incentive to end term limits. They cannot be guaranteed a position in the shrinking federal bureaucracy or in vanishing parastate companies when their terms are over. Even if these sources of patronage were not disappearing, there is no longer any guarantee that any one party will always win the presidency. Thus, no president can make a credible commitment of lifetime job security for the party faithful. Second, Mexico’s two largest parties now have the same incentive: to emerge as the majority party in a system of open and free elections. The PRI and the PAN thus should both support a constitutional reform that ends Mexico’s mixed system of allocating seats in the Chamber and the Senate and replaces it with a system of one-seat districts.

Fox has been perhaps the most media-savvy president in Mexico’s history, appearing on television and radio with incredible frequency and traveling around the country in a manner unthinkable to previous Mexican presidents.

Unfortunately, there is no easy solution in the short run to Mexico’s political deadlock. Constitutional reforms do not happen overnight, and Fox has limited time in which to push his legislative agenda. Even if the PAN could gain a majority in the Chamber and the Senate without these reforms, which would be difficult, it will not have the opportunity to do so until 2003, halfway through Fox’s presidency. The end result may be that little of his legislative agenda will be passed.