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De Remes Alain 2006 Power Index

De Remes Alain 2006 Power Index

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Universidad Nacional Autónoma de México University of California Institute for Mexico and the United States

Democratization and Dispersion of Power: New Scenarios In Mexican Federalism Author(s): Alain De Remes Reviewed work(s): Source: Mexican Studies/Estudios Mexicanos, Vol. 22, No. 1 (Winter 2006), pp. 175-204 Published by: University of California Press on behalf of the University of California Institute for Mexico and the United States and the Universidad Nacional Autónoma de México Stable URL: http://www.jstor.org/stable/10.1525/msem.2006.22.1.175 . Accessed: 04/05/2012 12:38
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Democratization and Dispersion of Power: New Scenarios In Mexican Federalism
Alain De Remes*
Oficina de la Presidencia para las Políticas Públicas

Focusing on political bargaining between the national and subnational realms, this article considers how the dispersion of power in different regions of a country may become a crucial factor shaping the rules of democratic governance. First, it analyzes changes in power dispersion of the last two decades in Mexico, highlighting how alternation in power at the national level in 2000 implemented horizontal checks and balances and revived a federal pact. Second, it shows that changes in the rules of the Mexican political system fostered a window of opportunity for new subnational actors to shape the national political agenda on re-engineering of the institutions of Mexican federalism. Enfocándose en la negociación política entre el nivel nacional y el subnacional, este artículo reflexiona sobre cómo la dispersión de poder de diferentes regiones de un país puede convertirse en un factor crucial al modelar las reglas del gobierno democrático. Primero, analiza los cambios en la dispersión del poder en las últimas dos décadas de México, haciendo notar que la alternancia del poder a nivel nacional del 2000 implementó balances y contrapesos, y revivió el federalismo. Segundo, muestra que los cambios en las reglas del sistema político mexicano fomentaron el surgimiento de opciones para que nuevos actores subnacionales moldearan la agenda política nacional rediseñando las instituciones del federalismo mexicano.

*The author thanks Todd Eisenstadt, Rafael Aguirre, Armando Palacios, Francisco Sarmiento, Melissa Ovalle, Diego de la Mora, Helios Becerril and Isaac Arteaga for their help and useful comments and Mony de Swaan and Juan Molinar for allowing the use of their Indice de Concentración de Poder. While the author is a Mexican public official, the views expressed here are strictly his own, and do not reflect the positions of any public agency.

Mexican Studies/Estudios Mexicanos Vol. 22, Issue 1, Winter 2006, pages 175–204. ISSN 0742-9797 electronic ISSN 1533-8320. ©2006 by The Regents of the University of California. All rights reserved. Please direct all requests for permission to photocopy or reproduce article content through the University of California Press’s Rights and Permissions website, at www.ucpress.edu/journals/rights.htm.

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A significant portion of the literature on transitions to democracy overlooks the fact that the advent and consolidation of democracy in a country with a protracted and incremental transition may be the end result of political bargaining between national and subnational levels of government. By focusing on the subnational realm, it is possible to unravel how the dispersion of power in different regions of a country can be a crucial factor in shaping the rules of governance and the practice of democratization. This article is divided into two sections. In the first, I briefly analyze how power has been dispersed in Mexico over the last two decades. I highlight how alternation in power at the national level in 2000 not only helped to foster a horizontal system of checks and balances between purportedly co-equal branches of government (executive, legislative and judicial branches), but also reinforced vertical accountability, among the national government, state governments, and municipalities, reviving a federal pact which had been dormant for more than seven decades. I also illustrate how this new dispersion of power is causing important changes in the behavior of the Mexican political system. Among the most important transformations are new patterns of recruitment and mobility for political elites—open primaries, responsiveness to the local electorate, and a longer time span for local politicians to advance their careers. The second part of this article argues that dispersion of power and changes in the rules of the Mexican political system fostered a window of opportunity for new subnational actors seeking to shape the national political agenda on a range of issues which have brought a new impetus to a long-needed re-engineering of the institutions of Mexican federalism. The advent of the Conferencia Nacional de Gobernadores (CONAGO) signaled a dramatic change in the political and economic relations between the federation and the states. This later section of the article concludes by analyzing the main themes of the federalism agenda that emerged from the creation of this and related organizations and evaluates some of the opportunities and challenges emerging from the 2004 Convención Nacional Hacendaria. Measuring Alternation and Dispersion of Power in Mexico’s Democratic Transition The main characteristic of the Mexican democratic transition is that national-level democracy arrived only after a protracted and incremental process of electoral reforms that began in 1977 and ended in 1996. This democratic transition was mostly conducted election by election, rather than through any overarching pacts. The dominant Partido Revolucionario Institucional (PRI) did not vanish from the political scene, despite

As a result. I use Molinar and De Swaan’s Indice de Concentración de Poder (ICP). Democratization and Dispersion of Power 177 Figure 1. measuring the degree of decentralization of political and economic resources from the executive branch. dispersion of power at the national level began in 1986. As shown in Figure 1.De Remes. 2000 b) After 2000 federal election. losing the 2000 Presidential election. Paper prepared at the Conference of Ibergop “El Gobierno Dividido en México: Riesgos y Oportunidades Mexico May 7. but rather won back some of its lost congressional seats in the mid-term elections of 2003. A complete description of all variables included in this index can be found in Annex 1. Movimientos Graduales Pendulares: Transición democrática y dispersión del poder. In contrast if the ICP reaches 100. 2000 a) Before 2000 federal election. in which zero means that political and economic resources are completely decentralized among different branches and of government at the national and subnational levels. To assess how this incremental transition took place. 2002 CIDE. reform of Article 115 of the Constitution gave more autonomy to municipalities. this means that the party of the presidency has overarching control of all political and economic resources vis-à-vis other branches that compose the national and subnational political system. Indice de Concentración de Poder Source: Mony de Swaan and Juan Molinar Horcasitas. The ICP can vary from 0 to 100. This index is particularly helpful in showing different “steps” in the process of national democratization closely related to two variables: electoral reforms and economic crisis. This can be partially attributed to the fact that in 1983. The calculus for the year 2002 and 2003 was made by the author using the methodology established by De Swaan and Molinar. the local political arena experienced some degree .

the lower chamber of Congress. Molinar 1991). public lighting. In fact it was during Zedillo’s term that for the first time in recent history.45 million (Secretaría del Trabajo y Revisión Social 2005).07 million to 9. and inflation radically diminished their purchasing power while fiscal austerity measures diminished social spending.3 These two ele1.” Financial mismanagement triggered an unprecedented national economic crisis that left at least one million people without work. The third crucial event came in 1997. and the national legislature either amended significantly (as in the case of the pension funds or the financial rescue of the banking system.2 The Partido de la Revolución Democrática (PRD) and. to alternation of power in the state of Baja California in 1989. garbage collection. The constitutional status of the Distrito Federal (Mexico City) is not exactly that of the states: in contrast. Hence. although it did continue on a downward trajectory. despite the PRI’s electoral losses at the subnational level. 2. the power of the chief of government of the Distrito Federal is . the PRI could no longer enact constitutional amendments on its own. such as the property tax. the Indice de Concentración de Poder did not shift dramatically. The party also lost its qualified or two-thirds majority in the Senate. Most important. However. and impoverished the lower and middle classes when interest rates. the workforce went from 10.1 This increase in competitiveness led. local politics became increasingly competitive. after the mid-term election. when the panista candidate Ernesto Ruffo became Mexico’s first opposition governor since before World War II. The number of insured workers in the Instituto Mexicano del Seguro Social is used as a proxy to calculate the number of layoffs. this reform enabled municipalities to collect some local taxes. Between 1994 and 1995. Fondo Bancario de Protección al Ahorro (FOBAPROA) or rejected the presidential proposals (as in the case of the electrical reform). This crucial reform entitled municipal governments to expand their sphere of activities to include administration of water and sewage systems. when for the first time in recent history the PRI was not able to obtain a plurality of seats in the Chamber of Deputies. 3. The second important event affecting the ICP in 1995 and 1996 was the Zedillo administration’s so-called “Error of December 1994. while the PRI began to lose important municipal strongholds in the northern part of the country. especially the Partido Acción Nacional (PAN) capitalized on the discontent fostered by this era of economic hardship. after the 1982 economic crisis. and public recreation facilities. that made it more attractive for opposition parties to seek municipal posts. Furthermore.178 Mexican Studies/Estudios Mexicanos of electoral competitiveness amid an economic crisis. markets and slaughterhouses. for the first time ever. the president sent to Congress several bills related to important structural reforms. Moreover. wage freezes. brought the industrial and banking systems to the verge of collapse. but it also lost that hegemony in Mexico City. in 1997 the PRI not only lost its representative hegemony in Congress. (Mizrahi 1994:137–58. where the PRD won Mexico’s most coveted mayoral election.

During the first three years of the Fox administration the ICP continued to decline marginally. Most importantly. In short. the 2000 federal election emerged as the most important catalyst in the deconcentration of power. Alternation of power at the presidential level did not bring President Fox’s party a majority of seats in the lower chamber. the power to “nominate” and remove state governors. competitiveness and alternation of power at the subnational level also contributed to changing most of the unwritten rules of the Mexican political system which had worked for decades.De Remes. the most important meta-constitutional power of the Mexican president was to appoint his successor. and this brought new life to the federal pact. . which reached a threshold slightly below 80 points. once electoral competitiveness became the norm. Most municipalities were also held within the tight grip of governors and had almost no latitude within which to decide how to spend their budgets. The Senate remained under PRI control. Alternation and democratization in Mexico resulted in divided government among the legislative and executive branches of government. two thirds of the state governments continued to be controlled by parties other than Fox’s PAN.7 in 2003. In short.4 Even after these previous changes. the resources of the local government and the public exposure of the mayor make this a highly attractive position for politicians. Indeed. This can be mostly attributed to the excessive concentration of the PAN vote in some regions during the 2003 mid-term election and the loss of the limited by other federal powers on issues like procurement of justice. For further information on this subject see Weldon (1997: 225–58). alternation in power at the presidential level also produced a dispersion of power at the subnational level. Mexico had observed the country’s federal arrangement only in parchment. The traditional meta-constitutional powers of the Mexican president until the Salinas administration were: the possibility of controlling the PRI through the appointment of its leader. For decades. especially those mandating strict party discipline and unconditional gubernatorial allegiance to the national executive. and control of members of his party in Congress. Democratization and Dispersion of Power 179 ments triggered a significant shift in the ICP. complete control over the national bureaucracy. This meant that the traditional meta-constitutional powers of the president began to fade at a slow pace. Decentralized power and local autonomy had not existed due to the lack of electoral competitiveness and an overwhelming priísta hegemony in which all governors behaved as “presidential agents” (Eisenstadt 2004). Nonetheless.400 municipalities remained outside of PAN control. and debt. public security. political alternation at the national level simultaneously produced a divided government and a pattern of scattered power at the subnational level. and more than 65 percent of Mexico’s 2. since a stacked electoral calendar favored those parties other than the president’s to retain power in most state and municipal governments. 4. reaching the threshold of 51.

578. with checks and balances operating at the horizontal (co-equal executive and legislative branches) and vertical (states and municipalities) levels of government.68 Source: IFE. Fox had to face what in practical terms resembled a minority government. In the double process of dispersion of power (vertical and horizontal).9 25 22. regions effectively grew more assertive and less responsive to the will of the central government.6 Vicente Fox (PAN) 2000 Absolute data % 206 46 8 20. it is important to point out that the ICP seems to have stabilized at a level characteristic of democratic federal systems where checks and balances operate horizontally (checks among co-equal branches of government) and vertically (national governments. However.271 86. Table 1 shows that the last two Mexican presidents faced very different power configurations at the commencements of their terms.43 32. Concentration-Dispersion of Power. another way to assess the dispersion of power is to look simultaneously at the national and subnational electoral outcomes and analyze how these results have affected the country’s governance in recent years. states and municipalities).87 91.823. Simultaneously. INAFED.7 65.836. Along with this intensified activity.653 36.573 2.22 90.62 89.187 60 74. Contrarily. but it was still firmly in control of subnational electoral politics.12 12.2 35. Nuevo León governorship to the PRI.767. The party of President Zedillo in 1994 may have been losing ground slowly. Although important scholarly evidence exists that divided or even minority governments are not necessarily prone to deadlock. In addition to the Concentration of Power Index. the legislative arena also experienced dramatic changes as Congress grew more prolific than the national executive in the introduction of bills. Congress began to activate capabilities to obstruct the execu- . dynamics of political confrontation have spread in Mexico along with alternation.527 308 41. INEGI. 1994 and 2000 Ernesto Zedillo (PRI) 1994 Absolute data % Federal Representatives Senators Governors Population governed at the state level Municipalities Population governed at the municipal level 300 95 29 78. and Alain de Remes.180 Mexican Studies/Estudios Mexicanos Table 1.

one of the interesting characteristics of this type of election is that they can effectively contribute to a noticeable shift in the balance of power. the COFIPE reform of 1996 introduced a proportional representation formula in one of the tiers. something extremely unusual throughout the golden years of the hegemonic party system.166 % 47. Concentration-Dispersion of Power.456.51 Source: IFE. . This is shown by the number of presidential vetoes to bills passed in the Congress ( Weldon 1997: 236). as the PRI secured only 48 percent of the seats in the Chamber of Deputies. these elections tend to produce divided government (Shugart 1995). and support for the official party decreased. 1997 and 2003 Population governed by: Ernesto Zedillo (PRI) 1997 Absolute data Federal Representatives Senators Governors Population governed at the state level Municipalities Population governed at the municipal level 238 77 25 64. 12 percent fewer than in 1994.7 As evidenced in Table 2. plurality increased. 7.530.7 34. INAFED. The PRI was reduced from majority party to merely the “largest minority” in the lower chamber. and notwithstanding the presidential control of the legislature through the PRI.6 60. Therefore.864 430 32.129.12 68.018 1.16 78. Democratization and Dispersion of Power 181 Table 2. Second.12 22. and thirty-two seats were distributed according to this principle. The PRI also lost 15 percent of its seats in the Senate.5 48. however. the 2003 mid-term election also triggered 5. and also. there was a certain (yet negligible) degree of opposition between the two powers. the country was recovering from one of its worst economic crises. However. halfway through their sixyear terms.74 Vicente Fox (PAN) 2003 Absolute data 151 46 9 23. 6.433 40.9 28.311.44 59.6 Zedillo had to cope with a decidedly more adverse panorama in 1997. The loss of seats for the PRI in the Senate can be attributed to two factors: First. a position the party had not faced since the early post-revolutionary period (1920–1928) (Nava and Yanez 2003).84 17.De Remes.810 % 30. IFE and Alain de Remes. Even in the golden years of the Ancien Regime. tive agenda. Mid-term contests tend to be overlooked by some scholars.44 35. This is not to say. that Congress had been unconditionally deferent to the president during the last decades.5 Table 2 illustrates the political situation that Ernesto Zedillo and Vicente Fox faced after the mid-term elections.

In conclusion. The lack of attention to local processes as a catalyst for democratization is pervasive. the sub-national realm is also experiencing divided 8. and the latter 15 percent of the states. steadily bolstering plurality and as Figure 3 and Table 3 demonstrate. the “power sharing” phenomenon is not limited to the national arena. The president’s party lost more than 11 percent of its seats in the lower chamber. its overwhelming supremacy at the regional level has been challenged by the PAN and the PRD. However the paradox of the Mexican process of transition is that old political rules have not been replaced by new ones. as compared with PAN’s gains in the 2000 election. The trends at the subnational level clearly show that competitiveness has increased. Situations of complete hegemony in state legislatures are also quickly fading. In the upper chamber. This result effectively diminished its capacity to block constitutional amendments.8 In addition. Nonetheless. with the former controlling 28 percent. However. The typology for local legislatures is the following one: 1) Hegemonic congress: if a party has at least 60 percent of the seats. controlling 36 percent of the seats. signaling the end of an era of strong governance where presidents always secured majorities in the legislative branch. giving way to a norm of majoritarian or first minority governments. However. the numbers remained unchanged because senators are elected for six-year terms. the PRI still controlled 53 percent of the state governorships. analyzing local politics is useful. Subnational Democratization and New Political Trends Little scholarship on Mexico has used the conditions and prerequisites established by the literature on democratization at the national level to explain the outcome of democratization at subnational levels. There is also a dearth of explanation of how politics at the local level impinge on the pace and form of overall democratization of a country. as the result may illustrate how an increase in electoral competition at the national and local levels may be changing parties’ strategies and the pattern of recruitment and elite settlement. since there has not been an overarching pact between the elites that settles how the system can effectively work under a framework of political plurality. In 2003.182 Mexican Studies/Estudios Mexicanos a further dispersion of power away from the Fox administration. PAN is the second force in the Senate. and may establish a system of checks and balances between the center and the periphery. it is important to stress that the last two Mexican administrations faced a greater dispersion of power. 2) Majoritarian congress: if a party has at least .

Governors by Political Party 1997–2003 government (where the governor’s party is different from the one holding a majority of the unicameral legislature’s seats). and in the near future governors will face more checks from their legistlatures. once the hegemonic grip of single-party rule eroded. such as mechanisms for direct democracy. and Tlaxcala in 2003) have experienced budgetary deadlock under divided government. Today they include many institutional innovations that are not yet present at the federal level. Thus. power sharing also is becoming the norm in local legislatures. and 4) Divided government: when a party other than the governor’s controls the legislature. The dispersion of power between co-equal branches of government at the subnational level has brought interesting phenomena not seen in the national realm. At least three states (Chihuahua in 1996. as was the case in 22 percent of the states by 2003. and more advanced electoral laws (Lujambio 2000). 3) First Minority congress: if a party has the greatest number of seats but does not have 50 percent plus one of the total seats.De Remes. Although it was possible to solve these crises. the states constitute a political laboratory for unprecedented political circumstances. 50 percent plus one of the seats but less than 60 percent. . state constitutions were no longer mere mirrors of the national chart. This also means that governors will have to find ways to create viable legislative coalitions if they are to pass their agendas through more plural legislatures. Democratization and Dispersion of Power 183 Figure 2a. Furthermore. protection of indigenous rights. Governors by Political Party 1989–1996 Figure 2b. Nayarit in 2002.

0% 44.0% 54.5% 63.5% 33.Table 3.0% 43.5% 61.6% 59. Structure of Local Legislatures 2003 Estado Aguascalientes Baja California Baja California Sur Campeche Coahuila de Zaragoza Colima Chiapas Chihuahua Distrito Federal Durango Guanajuato Guerrero Hidalgo Jalisco México Michoacan de Ocampo Morelos Nayarit Nuevo Leon Oaxaca Puebla Queretaro de Arteaga Quintana Roo San Luis Potosí Sinaloa Sonora Tabasco Tamaulipas Tlaxcala Veracruz-Llave Yucatán Zacatecas PAN PRI PRD 10 12 2 13 8 9 5 11 16 8 18 4 4 17 16 5 9 7 11 7 10 12 3 11 12 10 2 7 3 11 12 4 289 12 10 6 18 20 13 24 18 7 13 10 20 18 19 25 17 8 18 26 25 25 10 1 2 11 1 3 2 7 2 37 2 4 17 7 2 16 18 8 2 1 8 2 2 Others 4 1 2 3 4 1 4 2 6 2 4 5 0 2 18 0 5 3 4 2 4 1 4 2 4 0 1 3 4 3 0 3 101 Total 27 25 21 35 35 25 40 33 66 25 36 46 29 40 75 40 30 30 42 42 41 25 25 27 40 33 31 32 32 45 25 30 1128 % 44.9% PRD PRI PRI PRI PRI PRI PRD PRI PAN PRI PRI PRI PRI PRD PAN PRI PRI PRI PRI PAN PRI PRI PRI PRI PRI PRI PRI PRI PAN-PRI PRD Hegemony Absolute Majority First Minority Divided PRI PAN Yes No No No No No Yes No No No No No No Yes Yes No No Yes No No No No No Yes No No No No Yes No No No 15 3 12 2 21 3 21 2 16 12 19 3 14 11 27 4 12 1 10 13 529 209 Hegemony: If the dominant political party at least have 60% seats in local congress.9% 59.3% 45. First Minority: If the dominant political party has less than 50% seats in local congress.0% 60.0% 61.8% 60.5% 62.4% 43.1% 52.0% 60.4% 57. Absolute Majority: If the dominant political party has 50%+1 seats in state congress.0% 50. Source: Local Electoral Institutes.4% 52.3% 46.1% 47. Divided Government: If the most important political party in the local congress is different from the governor’s party.5% 56.1% 52.4% 51.0% 43.4% 48. .0% 30.0% 52.0% 48.0% 48. and Alain De Remes July 2003.6% 51.0% 60.

we should keep in mind that federalism is a two-way street in which the subnational realm is influenced by the national. For example. as Mexico still needs important structural reforms to enhance its economic performance. a factor that may turn into a definitive advantage in a close general election race. Although at the time there was an intra-party dispute over leadership of the PRI. The implementation of open primaries by parties has important consequences for the Mexican political system. This loophole can be used by parties to exceed the campaign-finance ceiling established by the regulatory framework. is that some parties (especially the PRI since 1998 and the PAN in 2004) are beginning to rely on open primaries to choose their candidates for municipal and gubernatorial races. also triggered by more competitive local processes. and today politicians who want to occupy political posts in the regions need strong local ties to improve their prospects. The risks posed by this reality are not negligible. Nomination to become a state’s chief executive depended entirely on what the center wanted. extreme caution must be taken not to let regional agendas overpower national needs. the final vote tally of the 2003 (rejected) fiscal reform clearly shows that PRI legislators from the states of Hidalgo and Veracruz followed the will of their governors. most opposition political groups (meaning political groups not associated with the PRI) inaugurated new patterns of elite mobility and recruitment. another interesting novelty is that some governors are intensely lobbying. Therefore. during the late 1980s and throughout the 1990s. the pattern of political mobility from the center to the periphery is rapidly vanishing. but rather to directives from their respective governors. However. Most opposition governors made their political names locally before becoming governors. Under the hegemonic party system. Democratization and Dispersion of Power 185 However. The party’s governors tend now to have attained a higher local profile than in the past. This pattern also has been followed more recently by the PRI. we can expect that in the near future the influence of regional issues on the federal Congress will certainly increase. most governors had ties with the national government. Indeed. Another interesting characteristic. This process also has the effect of giving more exposure to the winning candidate of the primary.De Remes. They were overtly in favor of this bill. In addition. congressional members from these states were not truly responding to one of the factions. Electoral competitiveness and alternation in power at the local level also have prompted important changes in the recruitment and mobility of politicians. and vice versa. In short. and at times controlling the members of their party in the national Congress. Primaries are generally not regulated by national or subnational electoral laws. Hence. primaries diminish the nomination power of party leaders and . pressuring.

However. However. the PRI candidate who lost the governorship of Nuevo León in 1997. and are less concerned about fostering political ties with the center. the states where governors have a “striking local profile” (in other words. While in 2003 participation at the national level was the lowest of the last four elections (42 percent). and losing an election is no longer the end of a political career. One trend has become increasingly important for gubernatorial contests. as politics becomes more locally focused. . As demonstrated by Mizrahi (1999). voter turnout also increases. This could produce future national macroeconomic management problems. governors whose political careers are based entirely in the periphery) possessed substantially higher imbalances. the importance of stressing local independence vis-à-vis the center has political and economic consequences. we may conclude that people are beginning to show more interest in elections that are not based on national issues. and in Guanajuato (1991–1997) with Vicente Fox. the framing of the following local electoral campaign tends to concentrate on local. Thus. In short. On that occasion he won the governorship. The 2003 midterm elections offer an example. states with concurrent federal elections reached a 54 percent turnout.” as they may even have chances to compete as frontrunner candidates in the next election. Thus. Local politics are increasingly important to voters. Once electoral competitiveness at the subnational level has been established as the norm. 12 points above the national average. the time span for local politicians to advance their careers also increases. According to Velázquez. as manifested in new research on state budget deficits in Mexico. and they also tend to increase the cost and duration of campaigns. but who was again nominated in 2002. since they have to respond more actively to the needs of their electorates (Velázquez 2000). Another noteworthy pattern is that losing gubernatorial candidates in close races are no longer considered “lame ducks. as the subnational electoral level becomes more competitive. Furthermore. primaries also have been criticized. since they open the window for “outsiders” to win party nominations. rather than national issues. People have more incentives to vote when local issues directly affecting their lives are at stake. This strategy was previously used by the PAN in Chihuahua (1986–1992) with Francisco Barrio. state and municipal governments respond better to the needs of their constituencies.186 Mexican Studies/Estudios Mexicanos give more voice to the electorate to choose their preferred candidates. Once alternation of power occurs. This was the case of Natividad González Paras. Chihuahua helps illustrate when and why good administrative performance is important. performance of the state incumbent governor may become the most critical factor in retrospective evaluations by voters.

Important new actors in Mexico’s “centrifugal opening” are seeking to consolidate electoral gains and ensure that these gains also translate into pluralistic governance. formed less than a year 9. the strategies. ANAGO (Asociación Nacional de Gobernadores). and results are contingent. longer time horizons for local politicians to advance their careers. has encouraged them to seek increasing flows of revenue to the states. responsiveness towards the local electorate. Unlike the era of PRI domination. two organizations created since 2000. “home rule. federalism is being re-ignited through electoral competition and a consequent new political dynamic in the local realm.” and taxation authority. in turn. the new actors—organizations of elected officials—are trying to counter the traditionally executive-heavy and centralized authority. Open primaries. and particularly in seeking increased revenue flows from the federal government to the states.De Remes.9 The following analysis considers an ongoing process where the agenda. and a more prominent place for regional issues on the national political agenda are all positive balances on the ledger of the new subnational democratization process. Among the important changes have been those in patterns of recruitment and mobility which were unthinkable under a single party regime. The origins of CONAGO must be traced to a previous organization. . that have been extremely active in promoting federalism. The increasingly pluralistic makeup of subnational electoral politics has prompted a clamor for greater resource shares and greater roles in decision-making. Democratization and Dispersion of Power 187 To conclude. on the negative side. when Mexico looked like a centralized system rather than a federation. and hence the conclusions offered are tentative. Revenue flows are understood as the amount of resources that the federal government transfers to the states. as I shall describe in the next section. The second part of this paper describes the origins and development of CONAGO and the Conferencia Nacional de Municipios de México (CONAMM). This. and potential risks exist that extreme local political competition could trigger national macroeconomic imbalances. However. New Subnational Actors Seek to Consolidate Electoral Gains Dispersion of power at the national and subnational levels has been capitalized upon by new actors seeking to mold the national political agenda. party discipline has weakened. either after they were originally collected in the state or as new allocations. support and cooperation with the president to implement his national mandate have diminished.

188 Mexican Studies/Estudios Mexicanos before the 2000 election by the PRD governors of Nayarit. relations between President and governors were not going to be easy to manage. CONAGO was designed as a permanent institutional space for dia10. the PRD. they have attended most meetings as observers. and to release all prisoners convicted of federal crimes. as the governor of Tlaxcala threatened to devolve the failing state educational system under his control back to the federal government if the Fox administration did not offer more resources. However. since most governors elected through a coalition of several parties sooner or later pick one of the parties and adhere to it. after leading an unprecedented coalition among the PAN. the PRD-governed ANAGO member states also threatened to devolve health care back to the federal government. and because he wanted to build an encompassing base of citizen support which cut across different partisan lines. the Fox administration and the local ANAGO governors were able to solve their differences through an additional transfer of resources from the federal governments to these states. This is a rather unusual strategy. As the dispute escalated. Furthermore. Once the PRD and PRI governors decided to combine their efforts— on the education issue—and form the Conferencia Nacional de Gobernadores. Nonetheless. in 2002 ANAGO became more dynamic and confrontational. five from the PRD. to form CONAGO. pardoning their sentences in state prisons. it was out of the question to release the prisoners since they had already been convicted. most of the agenda and activities of ANAGO were taken over by CONAGO. Initially. and one independent)11 met in Cancún.10 Eventually. Pablo Salazar took office as governor of Chiapas in December 2000. and thus. Pablo Salazar declared his independence from the organizations that supported him in the election. to petition for a similar deal. but they have the power to transfer these prisoners to Federal precincts or jails. such as José Murat from Oaxaca and Melquiades Morales from Puebla. In July 2002. . Quintana Roo. the PAN governors decided not to participate in the new forum. 11. This action prompted other governors from the PRI. the former organization is still in place and serves as a coordinating mechanism for PRD state executives. The governors threatened to devolve all the prisoners purging their sentence for federal crimes in state prisons to the Federal Government. The two skirmishes sent clear signals that the governors were building a space to unite and voice their concerns. twenty-three governors (seventeen from the PRI. and five other parties. Governors do not have the power to release prisoners convicted for federal crimes. However. shortly after taking office. and Tlaxcala. Mexico City (the Federal District). The ANAGO’s motivation was to create a forum to consider decentralizing resources and functions of the national government and to improve delivery of state-based services such as health care and education. In fact. This alliance was instrumental in defeating the PRI in one of its traditional strongholds. However. Zacatecas.

. This issue must not be disregarded. With the alternation of the national executive. debate. their complete allegiance to the president was simply not necessary. see Hernández (2000). For several reasons. CONAGO also has given assurances to the central government that it does not wish to withdraw from the federal pact.12 This centralization of the political system created incentives for each governor to bargain with the president over transfers of additional resources for his/her state on an individual basis rather than through a collective interest group. The group also seeks to increase state government resources and to enhance their capacity to respond to community demands. For the aforementioned reasons. The organization has emphasized several times that its main objective is to strengthen the states so they might contribute more effectively to national development. the relations of Ernesto Zedillo with the PRI (governors included). and the majority of governors. especially if the president came from a different party. Finally. it is notable that. and of the PRI itself. Once the governors began to build their careers locally. started to wane as the electoral conditions turned more competitive all over the country. on the other. most governors acted as “agents” of the president and offered little resistance to orders from the national government. an organization such as CONAGO was unthinkable under a one-party regime. For further information. but rather seeks to promote a new decentralization process that strengthens all levels of governments. the president had “metaconstitutional” powers allowing him to nominate and remove governors at will. Second. In short. the old rules of commu12. The electoral defeats of the PRI strained its relations with the president throughout that sexenio (1994–2000). on the one hand. during the golden years of the priísta hegemony all governors were members of the PRI. since the president had complete control of his party and his congressional delegation. and negotiation aimed at equilibrating the power between the national and state governments.De Remes. Democratization and Dispersion of Power 189 logue. the creation of a national association of governors cannot be dissociated from an increase in electoral competition and plurality and with alternation in power at the national and subnational levels. Although Carlos Salinas managed to concentrate control over the political leaders of his party (mainly through his persona). and these were exercised frequently during the Salinas administration. The deference of the governors. party discipline was extremely strong and almost impossible to break. aside from its declared official goals. and although episodes of intra-party competition among different factions of the PRI did occur (Hernández 2000. First. CONAGO served another implicit purpose in the new context of Mexican politics: helping to bridge the suddenly increased distance between the president. were not easy at all. As long as the president could pull the strings of the PRI. Langston 2002).

In contrast. in a relatively short period of time. This proportion puts Mexico among the most centralized systems in this respect. was to increase state shares of federally generated revenues from higher petroleum prices. and addressing problems of migration. Most of the developed nations show much lower levels of centralization—for instance. since they have weak fiscal bases on which to collect revenues. This is an especially remarkable achievement in that members have overcome collective action problems unheard of under the priísta presidencies. the poorer and highly populated southern states such as Oaxaca and Chiapas have great and permanent need to receive an inflow of federal transfers. Also. education. and they have not been replaced by other institutional channels. For the first time since opposition governors began to win office in 1989. 94. (CADE. the group’s short-term objective.14 Despite these obstacles. In 1996. 1999). the CONAGO has already logged four important results. The first. Canada: 50 percent.9 percent. and natural disaster response. For instance.3 percent. when each governor relied on personal connections with officials from the center and on individual bargaining skills to obtain a greater share of national transfers and national public infrastructure projects. More specifically. other southern states such as Tabasco and Campeche have expressed a strong preference for retaining a greater amount of locally-generated oil revenues. 14. CONAGO constructed an agenda identifying the most common difficulties governors faced in their daily relations with the central government. the group has become an institutional space for framing the pressing issues of federalism. health care. the CONAGO was able to bring together governors from different political groups and regions. and has become the agenda setter on this subject. Despite its very recent founding. Norway: 79.13 This short-term agenda also has included issues such as coordinating public security between the states and the central government. 13. CONAGO has sought to promote two issues. In only two years. Different needs and a sense of fairness in sharing revenues for each state are elements to illustrate this situation.8 percent. the United States: 66.190 Mexican Studies/Estudios Mexicanos nication and bargaining between the governors and the president were rendered obsolete. CONAGO pushed for a new mechanism for transferring resources to a new agricultural program established in 2003 to improve living standards of peasants and small producers. Mexico is still extremely centralized in revenue generation. The importance of this accomplishment should not be underrated. Over the last year. . Germany: 72. since the challenges faced by each governor in his/her state are quite diverse and so are the governors’preferences as to how decentralization should be carried out or how the fiscal system should be reformed.7 percent of the total revenue was concentrated in the federal government. the more affluent northern states have been pushing for a new taxation system that would allow them to retain a greater portion of the taxes they collect in their polities and which are automatically transferred to the central government.

coherent. The fourth and most important result was the capacity that CONAGO showed to call for the Convención Nacional Hacendaria. the national. However. Fifty-seven years had elapsed since such a comprehensive exercise had last been undertaken in Mexico. which was launched in February 2004. In order to more efficiently use these resources. the federal government created spending limitations. the governors will receive oil revenue surplus resources to support agricultural programs in their states. At this convention. the most pressing necessity was to build a unified. the national. PAFEF seems to allow a great degree of latitude for governors. forcing states to allocate at least 50 percent of this additional income to infrastructure projects. since in 2003. Democratization and Dispersion of Power 191 Second. and reasonably strong fiscal authority for a national economy that was still very fragmented. CONAGO successfully pressured the national government to allocate more resources to a new fund called the PAFEF (Programa de Apoyos para el Fortalecimento de las Entidades Federativas). Notwithstanding the urgency of this purpose—addressed in the proposals for each convention—the accomplishment was postponed for decades. as they are illustrative of the political underpinnings of Mexico’s fiscal structure during the twentieth century. thirteen states did not report in their annual budget accounts how this fund was used. The third important achievement was the involvement of CONAGO in the Agricultural Pact (or Acuerdo Nacional para el Campo—ANC) signed between the national government and the most important peasant organizations. The 2004 Convención Nacional Hacendaria On October 28. because. The misfortunes of some of the early conventions warrant consideration here. and municipal governments tried to redefine crucial aspects of the fiscal and federal pacts. In fact. The main objective of the convention was to set a comprehensive agenda of reforms. In the aftermath of the Mexican Revolution. state and municipal governments as well as the national Congress. some delegates sought to defy regional interests which were well-represented in Congress at that time. established in 2000 to strengthen state finances. which were presented to Congress in September 2004. These new resources came from surplus revenue generated by oil price increases. and few similarities exist between the motivations for the three previous conventions and the most recent one.De Remes. state. even as they followed a centralizing rationale. In the first and second fiscal conventions (1925 and 1933). 2003. legislators were highly responsive to regional bosses and revolutionary warlords in their territories and in the districts that they formally rep- . decided to sign a protocol launching the Convención Nacional Hacendaria.

Given the abundant federal resources at their disposal which had been generated by the oil boom of the 1980s.16 The 2004 convention aimed to build consensus and propose means of reassigning the distribution of resources and responsibilities at each 15. Therefore. in the long run. 240–45). This new fiscal framework introduced the value-added tax (VAT) and gave states the option of signing a non-binding agreement through which they would delegate to the national government what remained of their income collection powers in exchange for greater transfers from the center.15 In 1980. It is important to note two aspects of this process: although decentralization started earlier than the power dispersion described above. Over the last two decades there has been a move to decentralize the Mexican fiscal system. to reallocate resources and responsibilities between the federal and subnational authorities. was indispensable in fortifying a fiscal system that subordinated the regions. This figure results from the division of the expenditure of the states and municipalities by the total primary expenditure of the public sector. For more on these early conventions. 16. This achievement by the national executive was reached one year after the PRI successfully centralized electoral processes under federal jurisdiction (which also helped consolidate PRI hegemony for the next five decades). Díaz-Cayeros and Webb (2000:123–25). 25 percent of total federal revenue was redistributed to the states and municipalities. A unified fiscal system was attained only with the political centralization completed with the rise of the nascent hegemonic party. rather than a shift in responsibilities for collecting taxes. through the official party. the SNCF further weakened the fiscal autonomy of states. since they became even more dependent on transfers from the national government. By 2003. or. it has been mainly driven by this redistribution of power. more precisely. Presidential control over the political system. that figure had grown to 38 percent.192 Mexican Studies/Estudios Mexicanos resented. all the states agreed to enter to the new system. if we only take into account federal income from taxation (excluding grants from oil and other state owned firms). and decentralization has meant the transfer of administrative controls and resources. that same figure grew to 70 percent (Presidencia de la República 2004. However. To give an idea of how administrative decentralization has evolved. see Courchene. the centralization of the fiscal system attained its pinnacle with the enactment of the Sistema Nacional de Coordinación Fiscal (SNCF). The third convention in 1947 did succeed in adopting a centralized fiscal system. . the change is more stark: in 1993 43 percent of this income was transferred to the states and municipalities. However. it is worth mentioning that in 1993. whereas in 2003. the federal legislature either diluted or rejected moves towards centralization of resources and responsibilities.

There is little doubt that a new. the Convención Nacional Hacendaria ended. whose payroll and “perks” are received. They also arranged to include in this package a mecha17. (Merino 2003: 359). This is the reason why one of the greatest challenges for the states—and the national executive and legislative branch—is to strike a new balance between compensatory mechanisms benefiting the poorest states and new incentives to reward those states that make significant local efforts to collect more revenues. currently. This panorama can become even more complicated when interests created among important political actors straddling state lines are considered. every state executive has the incentive to pass the buck on this issue. Agreements and proposals of the convention spanned a wide range of issues: public spending. 17 In August 2004. important disparities among their fiscal revenue bases exist that require the use of redistributive mechanisms. However. Democratization and Dispersion of Power 193 level of government so as to give new.De Remes. income. But the challenges facing reform of the current fiscal structure are great. changes in the current fiscal organization might imply undesirable costs for new subnational governments. inter-governmental work-sharing schemes and cooperation. it became apparent that improving the fiscal system is much more complicated than simply giving up the taxation powers of the central government to local governments. while getting more transfers from the federal government is always desirable. even when overall efficiency gains could be attained. Therefore. As discussions evolved. Also. not all of the states are administratively prepared to impose new taxes or to collect those currently in the hands of the national executive. there was not a complete consensus on how to implement a comprehensive overhaul of the fiscal system that could generate a substantial increase in revenue for the national and local administrations. from a political standpoint. better form to the federal pact. decentralized. the governors and the president agreed that the national executive would send the 2005 annual budget to the lower chamber of Congress with a proposal to allocate 2 percent of the VAT to the states and 1 percent to the municipalities. states. . with more than 350 proposals accepted by unanimity. public patrimony. the federal government collects as high as 97 percent of total taxes collected in the country. Moreover. and the entire national economy. In the end. and accountability and fiscal oversight. First. As mentioned before. Paramount among them are the teachers unions. public debt. via states. fiscal structure could yield significant benefits for municipalities. The convention was a necessary political forum. since each governor knows it is unpopular to increase the tax base or simply levy more duties. even if all of the states were prepared. administrative simplification. from federal funds.

Mexico has averted the vicious cycles into which other federal states in Latin America—specifically Argentina and Brazil—have fallen. Ambiguous areas in the budgeting and spending process cover a range of issues. health. almost two thirds of Mexico’s states have enacted legislation similar to the federal freedom of information act (The Ley Federal 18. From a more optimistic perspective. Other areas in which the convention met its original expectations were the areas of transparency and accountability and fiscal oversight[RAP1]. according to the proceedings of the convention. . leaving in place the conservative but wise status quo. 19. With this system of incentives. there was consensus. Also. like the need to cede constitutional ground to the fiscal system and to clarify areas where the two levels of local government could act jointly. The economic and social disparities between states and regions in Mexico render unfeasible any move towards an extremely competitive federalism system. almost half of the states still have cumbersome legal frameworks which limit possibilities for transparent oversight of their budgeting and spending processes. on matters advocated by the CONAGO. (Fitch Ratings 2004:1). state governments cannot borrow financial resources from the international market since they are not backed by the national government. However. commerce. this report also mentions that at the state level. environment. while falling short of a comprehensive reorganization of the fiscal system. A Fitch report released in 2004 clearly signals that at the national level. and economic and social development (See Declaratoria Final 2004: 84). Another positive result was that throughout the convention a recognition prevailed that the principle of distributive equity (i. indeed. fiscal policy transparency is still deficient. as in the United States. public security and safety.18 Another positive aspect was that the convention did not bring a proposal for radically altering the schemes under which states can borrow.194 Mexican Studies/Estudios Mexicanos nism in which the Congress would determine taxation amounts on food and medicines in order to offset national income redistributed to states and municipalities through the VAT. from public-servant wages to the use of federal funds earmarked for municipalities. However. these proposals were timid efforts by the CONAGO and the president to push forward a minor reform in areas related to taxation. the imperative of transferring wealth from richer states to poorer ones) is central to the Mexican federal system. Mexico gives information on fiscal and monetary policies that meet international standards of transparency.e. Currently. Under this framework the federal government can use resources allocated for transfers to the states as collateral for their respective debts. establishing predatory tax competition through revenue decentralization.. education. and in line with what CONAGO has been advocating.19 Regarding access to public information. These are. Many states are still lagging behind the federal government in this respect.

this new obligation for the government of the Federal District represents around (U. According to a Fitch Ratings report. and the need to halt or at least diminish the drain of resources from PEMEX. Perhaps one of the most interesting outcomes from the convention was the proposal to eliminate the inequitable amount of federal subsidies for education received by the government of Mexico City. Unfortunately. who is still the most popular contender for the presidency in 2006. (Presidencia de la República 2004: 239). Congress was not enthusiastic about the 2004 Convención Nacional Hacendaria. the convention was a good chance to unify criteria on transparency mechanisms for the states and to underscore the importance of the issue. Through this amendment of its constitutional statute. their inertia has 20. 22. While the average for member countries in that organization is 36.) $382 million for the year 2005 (6 percent of its budget). Congress did not turn the convention’s proposal into law. According to official figures. This constitutional amendment passed by a coalition from the PAN and the PRI in the Lower Chamber. 21. in the year 2001 it amounted to 18. during its 2004 period. represents a setback to its major opponent.22 Unfortunately. Mexico’s revenue from taxation (excluding grants) is very low: according to OECD figures.9 percent (Clarke and Capponi 2004: 39). the national legislature was reluctant to delegate or relinquish constitutional powers.20 This issue also revived tensions between the center and the periphery. money from mineral combustibles and their taxation generated 35 percent of federal revenue in 2003. congressional members became more assertive and. one of the most favorable results of the convention was the achievement of a consensus on addressing two problems of public finance in need of a forceful course of action: the growing burden of pensions and social security on finances of local and federal authorities. El Financiero 2004: 8). . Mexico City Mayor Andrés Manuel López Obrador (PRD). As the hegemonic party structure was dismantled and competition in local politics intensified. the government of Mexico City will have to share with the federal government the cost of education under the same scheme that other states do. Historically. in 2003 60. Democratization and Dispersion of Power 195 de Transparencia y Acceso a la Información Gubernamental). In monetary terms. Congress has fallen short of adequately facing these challenges. thus.21 Underlying these two concerns was the enormous task of carrying out a comprehensive fiscal reform to endow the state with more economic resources.8 percent of PEMEX revenue was dedicated to paying taxes (Fitch Ratings 2004b: 2). and even during the first decades of the postrevolutionary regime. Thus.De Remes. as explained below.9 percent of the GDP. the state-owned oil company which provides a third of the federal budget every year. In order to reduce the tax burden of the state-owned firm and stimulate its expansion. Finally.S. since most governors outside Mexico City considered that the capital had always been treated too generously. the convention agreed to impose lower tax rates on new production of oil and gas. and in ratifying the proposals of the convention.

As pointed out by Eleazar (1987). used their prerogatives to define federal expenditures to favor local constituencies at the expense of federal government priorities. These new dynamics showed in the negotiation of the 2005 federal budget. but not the only condition needed to revive the federal pact. the convergence of interests between the CONAGO.) less). Among the most important were the reduction of resources to payment of fiscal debts ($700 milion (U. the distribution of surplus revenue from oil sales and the reapportionment of the 2005 national budget can be explained more accurately by a simple political logic: congressional members favored their governors and constituencies. To an unprecedented extent. the proposal endorsed by CONAGO and the president to transfer 2 percent of the VAT to the states and 1 percent to the municipalities and to implement food and medicine taxes was killed in both chambers in October 2004.S. according to preliminary analyses. on the one hand. Therefore. In summary. and a general cut in administrative payrolls (40 percent less than that proposed by the executive).196 Mexican Studies/Estudios Mexicanos gained strength too. federalism is a complex mechanism requiring a proper balance between self rule and 23. Conclusions Electoral competitiveness is a necessary. the states governed by the PRD and the PRI got the largest share of reallocated resources: differences range from two to four times as much as the amount allocated for the PAN governed states (Reforma 2004). and the national legislature.S. and realigning the political allegiances of local executives to their party. payment of interest on funds to protect banking savings ($60 million (U. can be seen only as a short-term but extremely profitable alliance in which the periphery was able to curb the priorities of the federal government. the Chamber of Deputies. or half the sum proposed by the executive). This clearly shows that the convergence of interests between the national and local executives did not pose a real threat to Congress. the emergence of legislative power has coincided with the expansion and reinforcement of legislators’ abilities to offer local-level patronage. legislators in the lower house. In other words. The opposition parties in the Chamber of Deputies carried out significant reappropriations of the budget for the year 2005. the party leadership remains the most important source of congressional member cohesion. with a direct form of “pork-barrel politics” to advance their own political careers. . effectively dismantling the coalition between the governors and the national executive. on the other.23 While governors can lobby legislators from their states to advance their interests in the Congress. On the other hand. In fact. In fact. national legislators were clever enough to reallocate extensive resources from the national budget to specific infrastructure projects in their states.) less.

the strengthening of federalism is not always intertwined with the fortification of democracy. but concentrated all relevant political decisions (for the national and regional levels) . ultimately. its principles and operative mechanisms were gradually undermined by continued instability.De Remes. It also requires defining clear responsibilities in some issues and overlapping sovereignties in others. and. its operative mechanisms were never developed: federalism remained dormant under the single-party regime. As explained in this article. Democratization and Dispersion of Power 197 shared rule. True federalism in Mexico was impossible under a hegemonic party system. and it is bringing the federalism to the center of political discussion. A centralist constitution was enacted in 1836. (Stepan 1999). The latter ensured peace. is generating problems 24. federalism can be seen as enabling democracy (because it fosters pluralism and protects minorities) or as constraining it (when a minority has a veto power over the will of the majority through the Senate or local legislatures). past experiences of federalism in Mexico were of little help in establishing contemporary formal institutions and behavioral rules: they belong to different historical contexts and. new balances between local and national authorities in issues related to education. as well. for instance. but also competition and cooperation among different units. In overall terms this is a change for the better. In a nutshell. Unfortunately. safety valves must be created in case of deadlock in the budgeting process. Nevertheless. economic stability and development. among other domestic and external factors. Although a new federal pact was put in place in the Constitution of 1856. The new dispersion of power discussed here implies new spaces for democratic participation. economic and fiscal centralization were deeply rooted in the political system that ruled Mexico for most of the last century. by the political apparatus built by Porfirio Díaz. federalism entails power sharing. they failed to live up to the expectations of democracy under a federal pact. Changing the rules of the fiscal system for the purposes of economic efficiency and reward are not sufficient to build a new federal pact. Still. Throughout all of its independent history. The Constitution of 1824 failed to frame the tensions between the center and the regions that. and use of natural resources. Although the constitutional foundations of the federal pact were not eroded. from a national perspective. Further discussion of a new federal pact would have to take into account. under the current institutional framework. The new political balance.24 There is a worrisome reality to acknowledge. Mexican federalism has been more a frustrated goal than a reality. in every case. stirred upheavals to which federalism finally succumbed. The formal rules of federalism are useful as long as they frame these tensions productively and strike a balance between local and national interests. civil strife. That system inhibited political competition and pluralism. in some respects these are indispensable. redistribution of income. Thus.

The outcome of these bargaining processes will benefit neither the national government nor the federal entities in the long term. The CONAGO’s multi-faceted agenda is a result of the new imperatives of politics at the local level (on recruitment. There were also worthy achievements with respect to allocating resources in areas of local government (infrastructure) and social organization. explained in the first section of this paper. all governors pursue their own legislative objectives with their respective legislative delegation or with their political parties. and dispute settlement. Some preliminary conclusions on the CONAGO and federalism can be drawn. and specifically a majority of congressional members in the lower chamber. instead. . it is clear as well that CONAGO’S federalism agenda was designed around a straw man: the national government. the CONAGO has needed to align its objectives to those of a winning coalition in the Congress. There is a latent contradiction between. accountability). competition. coordination. the political dynamics and constraints that local democratization has generated. on the one hand. This task looks all the more challenging when the role of Congress is taken into account. but the political system that replaced it (based in the hegemonic party system ruled by the president) was very centralized as well. although a balance of the CONAGO with regards to federalin the person of General Díaz. Finally. Now that the fiscal convention is over. at the expense of large portions of the federal government’s budget. The members of the CONAGO achieved genuine progress in identifying and publicizing a way to rationally predict and direct the fiscal implications of the dramatic political changes that suddenly surfaced as a result of alternation in the presidency. Furthermore. disregarded the convention’s proposals and engaged. in order to prevail against the presidency.198 Mexican Studies/Estudios Mexicanos which were unknown in the past and which could well jeopardize efficiency of the fiscal structure and even economic stability. although the CONAGO has proved to be an important forum for voicing common concerns. For these reasons. Thus far. or simply to promote its proposals and turn them into pieces of legislation. in a disorganized fight for resources for their constituencies. The Chamber of Deputies has the last word on at least one issue of the greatest importance for every year’s politics at the local level: the budget. it seems not to be in perfect tune with the need for ad hoc alliances that define everyday issues at the national level. and on the other hand. CONAGO must prove that it has constructed institutional mechanisms that will allow the organization to continue as a permanent forum of debate. However. This contradiction is best exemplified by the way the congress. The Mexican Revolution destroyed this structure. the principles underlying a federal pact (sharing responsibilities and gaining efficiency on the whole).

energy. But. This path of gradual change would need a stronger commitment and effort on the side of local governments to lobby in the Congress for every single reform. there are more reasons for skepticism than optimism about this possibility. would bring on a predatory process at the expense of the national executive’s priorities. Unfortunately for Mexican federalism and for the overall well-being of the state. In this scenario. Although “pork-barreling” is perhaps an inevitable consequence of power dispersion. the new interaction of local and national politics. the CONAGO could continue to be a forum to renew the necessary political will to carry out these transformations. . gradually. the steps taken by CONAGO and the proposals of the Convención Nacional Hacendaria could yield. In this context. In the worst-case scenario. it is possible to take past experience into account and elucidate two opposing scenarios for the future. local governance and accountability. Democratization and Dispersion of Power 199 ism would be preposterous at this moment. In the best-case scenario. institutional changes to strengthen economic efficiency. Unless the urgent structural reforms (fiscal.05CLL)] + ( Ei[(. specifically those referring to Congress. the CONAGO could have a chance to prove its capabilities by pressing its members to exert their influence in Congress in accordance to national—not local—priorities. Annex 1: Methodology of the Indice de Concentración de Poder The methodology to construct the Indice de Concentración de Poder was devised by Mony de Swaan and Juan Molinar (2002) according to the following formula: Yx=F[(. it is important to note that it could put the Mexican economy in an even more fragile situation.5Li)] + (Mi(Pmi) Where: Y=Degree of concentration of political and economic power from the incumbent party for the x year.De Remes. a comprehensive reform of the fiscal system is not in sight at this moment. F= Number of resources allocated to the executive vis-à-vis the legislative and Judiciary Branches as a percentage of the total annual budget.5Gi)+(.5P)+(. Mexico’s economy will be increasingly vulnerable to the contingencies of politics. The structural condition of centralization in tax collection remains. just the same as the very weak fiscal basis of federal and local finances. labor) are enacted shortly.225D)+(. for the reasons explained throughout these pages. P=Dummy variable that signals if the PRI is in control of the presidency.

if not. 2002. . If the party of the president has the bare majority. Gi takes the value of 1. CLL= Control of subnational legislatures. where 0 means absolute dispersion of power while 100 means an absolute concentration of power in the hands of the national executive.200 Mexican Studies/Estudios Mexicanos D=Control of the lower chamber. as well as issues of health. If the party of the president did not reach a majority in this chamber. otherwise 0 Li= Control of local legislature by year. If the governor belongs to the same party of the president. S takes the value of . If the party of the president is in control of more than 16 legislatures. This variable was introduced since constitutional amendments need to be approved by Congress and by at least 50 percent of local legislatures. CLL takes the value of one. S takes the value of 1. D takes the value of . Gi=Control of the governorship by year operationalized as a dummy variable. D is computed as the percentage of seats allocated to the party of the executive. S= Control of the upper chamber (Senate). S is computed as the percentage of seats allocated to the party of the executive. education. Mi= Percentage of resources allocated to municipalities by states (participaciones y aportaciones) Pmi= Percentage of the state population aggregated by municipalities governed by the party of the president. Otherwise L takes the value of the percentage of seats controlled by the party of the president in the local legislature. the volume is 0. If the party of the president did not reach a majority in this chamber. If the party of the president has a qualified majority. and fiscal relations between states and federation. but less than the qualified majority (this is 2/3 of the seats of the lower chamber) needed to pass constitutional amendments. operationalized as a dummy variable. Ei=Percentage of annual resources transferred from the central government to each state (transferencias y participaciones). The Index varies from 0 to 100. Cancun. If the party of the president has the majority in a local Congress L takes the value of 1. July 13.75. but less than the qualified majority (this is 2/3 of the seats of the lower chamber) needed to pass constitutional amendments. If the party of the President has the bare majority.75. Annex 2: CONAGO Meetings From July 2002 to November 2003 CONAGO has met fifteen times: • Constituent assembly. If the party of the President has a qualified majority. Participants discussed principles of federalism. D takes the value of 1. Quintana Roo.

• Second extraordinary assembly. Colima. Cabo San Lucas. 2002. Members of the conference decided to review with the Secretaría de Hacienda y Crédito Pública. • Sixth ordinary assembly (Second governors’ meeting). Hidalgo. Guanajuato. Chihuahua. 2002. . Tlaxcala. Metepec. Democratization and Dispersion of Power 201 • First ordinary assembly. and established a commission that would serve as a link with Congress and the president to negotiate issues regarding La Reforma del Estado. Morelia. The conference agreed on establishing a permanent dialogue with Congress and national political parties. Members made a statement rejecting the war against Iraq. • Fifth ordinary assembly. September 28. Members discussed strategies to participate in the negotiations of the 2003 federal budget. Estado de México. Atlihuetzia. 2003. Governors presented some of their proposals concerning federalism to the Secretarios of Gobernación and Hacienda y Crédito Público. August 24. 2003. 2002. • Fourth ordinary assembly. March 14. • Third extraordinary assembly (first governors’meeting). The main objective of this meeting was to increase the resources allocated to states and the municipalities in the 2003 federal budget. Veracruz.De Remes. • Third ordinary assembly. • Seventh ordinary assembly (Third governors’meeting). October 16. February 21. December 8. Governors analyzed some aspects that should be included in fiscal reform. Manzanillo. • Second ordinary assembly. Chihuahua. The organization agreed to allocate 50 percent of oil revenue surpluses that they would receive to local infrastructure projects. Members decided to elaborate a project for La Reforma del Estado. the amount of resources that states would receive from revenues generated by oil surpluses. CONAGO decided to establish a closer relationship with the national congress in order to influence the annual budgeting process and amend some fiscal laws. 2002. 2003. Pachuca. Leon. Baja California Sur. November 22. Members discussed the path to materialize political agreements based on federalist principles agreed upon by participants of the Conference. October 28. 2002. April 26. 2002. Boca del Río.

Alberto Díaz-Cayeros and Steven B. Rory and Hielen Capponi (eds. April 8 and 9. Lessons from Mexico. Clarke. 2003. Unanimously. Thomas. Achievements and Challenges of Fiscal Decentralization. 2003. . At this meeting the president and the secretaries of Gobernación and Relaciones Exterior were invited as active participants. La Dependencia Financiera de los Gobiernos Locales en México. Monterrey. 2003. CONAGO discussed the last details before the call for a Convención Nacional Hacendaría. Nuevo León. References: Centro de Análisis y Difusión Económica (CADE). June 5. CADE: Mexico City. Aguascalientes. OECD in Figures: Statistics on the Number Countries. 2004 Mexico City: Talleres Gráficos de México. Paris: OECD. Webb. 1999. “Historical Forces: Geographical and Political”. San Luis Potosí San Luis Potosí. • Tenth ordinary assembly (Sixth governors’meeting).). Aguascalientes. During this meeting. August 20. CONAGO invited CONAMM to participate in the fiscal forum. Coahuila. Giugale and Steven B. Governors decided to analyze the possibility of including federal administrative and fiscal justice tribunals in the workshops of the Convention. The governors belonging to the PAN became adherents of the CONAGO. the twenty-four members who participated in this reunion decided to analyze the convenience to call for a new Convención Nacional Hacendaria. C. Cuatro Cienegas. • Fourth extraordinary assembly. 2003. September 29.202 Mexican Studies/Estudios Mexicanos • Eighth ordinary assembly (Fourth governors’ meeting). Declaratoria Final de la Convención Nacional Hacendaria. 2004. • Ninth ordinary assembly (Fifth governors’ meeting). The members of CONAGO signed the Cuatro Cienegas Protocol which approved the agenda of the convention.: The World Bank. Webb ed. Courchene. as part of La Reforma del Estado. 2003. The conference made the official announcement of the 2004 Convención Nacional Hacendaría. The conference discussed with the Secretaría de Hacienda which legal instruments and principles were used to calculate resources that each state would receive from the revenue generated by the oil price hike. • Eleventh ordinary assembly. 2000. Mexico City. July 30. in Marcelo M. Washington D.

“The Effects of Pluralism in the Legislative Activity: the Mexican Chamber of Deputies. “Revelan sesgo partidista. Secretaría del Trabajo y Previsión Social. Democratization and Dispersion of Power 203 De Swaan. México: CIDAC-Miguel Ángel Porrúa. Ensayos comparados sobre el gobierno local en México. Entre la autonomía y el sometimiento”. Presidencia de la República. “Reforma al artículo 122 reducirá presiones al presupuesto federal.” 26 November 1. Mexico City: Talleres Gráficos de México. México. 11. New York: Cambridge University Press.mx.stps.De Remes. “Federalismo.2: 278–306. Feb): 137–58. Gustavo. Stepan. 1917–2000. 2003. Rogelio. Merino. ———. Courting Democracy in Mexico: Party Strategies and Electoral Institutions. 2002. Yemile. El Tiempo de la Legitimidad. “Movimientos Graduales y Pendulares: Transición Democrática y Dispersión del Poder en México. “La descentralización educativa y las decisiones presupuestales de los estados”. St. Missouri. Louis. Paper presented at the seminary El gobierno dividido en México: Riesgos y Oportunidades. La Reforma. El Financiero. 1994. “Mexico’s Fiscal and Monetary Transparency”. June): 327–43. Eleazar. 2000. 1995. Joy. in Jacqueline Martinez and Alberto Díaz Cayeros eds. 1. 2004a. Organized by CIDE-Ibergrop. “La historia moderna del PRI. Washington University.” 14 October. México.” Paper presented at The International Research Workshop.” paper presented at the conference: El Gobierno Dividido en México: Riesgos y Oportunidades. 2003. Matthew S. los gobernadores y la legislatura nacional”. 2004. www. Molinar. Hernández. Mizrahi. 2004.l 2005). ———. María del Carmen and Jorge Yañez Lopez. Mexico: Cal y Arena. 1999. Fitch Ratings. “Toward a New Comparative Analysis of Democracy and Federalism: Demos Constraining and Demos Enabling Federations”. 8. 1999. Foro Internacional 40. Organized by the Center For New Institutional Social Sciences. 1991. 2004. De la descentralización al federalismo. Tuscaloosa: University of Alabama Press.” in American Political Science Review 89 (II. . 1987. 2005 “Trabajadores a seguradas permanents y eventuales registrados en el IMSS. “The Electoral Cycle and Institutional Sources of Divided Government. Mexico City: Oceano. Alfred.” 24 November. Alonso. Mexico: CIDE. 2002. Shugart. 2004.” Online database cited Oct. February. Nava Polina. Exploring Federalism. Langston. Documento de Trabajo 100. 2000. “Rebels Without a Cause? The Politics of Entrepreneur in Chihuahua” in Latin American Studies 26 (I. Voto Retrospectivo y Desempeño Gubernamental: Las Elecciones en el Estado de Chihuahua. Juan. 2004b. no.gob. Eisenstadt. “Fitch Ratings ratifica calificaciones de grado de inversión de PEMEX. Todd A. Lujambio. Mony and Juan Molinar Horcasitas. Anexo estadístico del Cuarto Informe de Gobierno. Daniel J. El poder Compartido: Un Ensayo sobre la Democratización Mexicana.

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