Confusions and Certitudes

The story goes that as Mark Twain, the great American author, and novelist William Dean Howells stepped outside for a walk one morning a downpour began, and Howells asked Twain “Do you think it will stop?” Twain answered, “It always has”. Governments come and go but the constant in our country appears to be a poor governmental system that, different from rain, doesn’t end naturally. After many years of insufficient and incompetent governments, we now have one that possesses key attributes for it to govern effectively, thus making this an auspicious moment to ask what the function of the government is in the development of the country.
The query is not especially Mexican in nature. Innumerable nations experience problems that we all can recognize as ours, from bureaucratic abuse to the changing nature of legislation. Some countries have begun to advance attempts to confront the problem and there’s much that Mexico could learn from them.
Although the public debate is excessively long-winded in implicit and explicit answers to the question on the government’s responsibilities, the first thing that’s evident is that the function of the government is, above all, to govern. That might seem redundant, but Mexico is a country that has not been governed for quite a while. Beyond the specific actions that, well or poorly, the government –the current and the past ones- satisfies in normal fashion, such as foreign policy, defense, and tax administration, to cite some obvious ones, the function of governing has been practically non-existent in the country for a long time. Examples of this abound: the lousy performance of the economy, the persistent (illegal) entry and transit of migrants, the public insecurity, the violence, the poor use of public monies at all governmental levels, the system of justice and, in particular, the disposition to change the rules of the game every other minute, the same in commercial as in electoral matters, in the fiscal deficit and in taxes. How can a country be expected to function when the legal and regulatory climate changes time and again and with no better reason than the whims of the politicians of the moment?
Some years ago I was walking down a street with enormous traffic in Seoul, the South Korean capital; a wide street, full of trucks and cars. All of a sudden, on reaching a corner of a side street I saw a child -surely no more than three or four- pedal his tiny bicycle onto the great avenue, cross it and turn to incorporate himself into the traffic without even watching. I was thunderstruck at what I had just witnessed and the more I thought about it the more I was impressed by the fact that neither the child nor his parents had the least doubt that all the cars would respect the stop light, that is, the rules of the game, in this case that of the traffic signal. Green light means go, red light means stop. The implication is obvious: there are clear rules that everyone understands and complies with and a government that enforces them, no questions asked, period. There’s no make-believe.
The issue in Mexico is not philosophical. We could debate on whether there should be more government or less government but the first premise has to be that there be a government in form, capable of enforcing the laws and guaranteeing that the rules of the game are complied with. What the Korean child took for granted and, on leaving him alone on a so immensely complicated thoroughfare, his parents had no doubt in assuming as valid, is something that in Mexico simply does not exist. The systematic violation of traffic rules is nothing more than a symptom of an entire way of being. A good government is one that shows leadership, wins over the confidence of the population, rules above all on bureaucratic instances and, as a result, earns credibility in the eyes of taxpayers not only for its competence, but also for its legitimacy in persecuting those who violate the laws, whether these be tax evaders or groups devoted to obstructing circulation in the streets. A good government earns the trust of the citizenry and, with this legitimacy it, well, governs. As Stein Ringen says in an interesting book entitled Nation of Devils: Democratic Leadership and the Problem of Obedience, the government should concern itself less with big legal changes and more with governing well, thus meriting the obedience of the population.
The problem of incertitude about the rules of the game is not new. Twenty years ago the government at the time found a way to resolve this that came to be prodigious: the North American Free Trade Agreement (NAFTA). More than a commercial treaty, the true purpose of NAFTA was to confer certitude on investors because it created a legal and regulatory framework that can’t be modified every time a bureaucrat gets up on the wrong side of the bed. NAFTA achieved resolving the fundamental problem for big businesses, for Mexican and foreign investors alike, that have the scale and the size to be able to utilize the mechanisms of the treaty to reach this certitude, but not so the overwhelming majority of business concerns and small shops that lie in wait for bureaucrats and inspectors because they have no alternative. In a word, a mechanism for certitude was created but, de facto, only for one part of the economy.
Facing a similar situation, the Chinese Government is experimenting with a new Free Trade Zone in Shanghai whose main purpose is to establish a regulatory framework that the government of the city and of the country is committed not to modify, so that investors and entrepreneurs achieve certitude that there is predictability in the rules of the game. A few days ago a Mexican businessman told me that, had he known that the government would modify the fiscal framework as aggressively as has been proposed, his company would not have embarked on a nearly one-billion-dollar investment. It is this type of uncertainty afflicting large and small enterprises in the country to which the Chinese Government is attempting to respond.
The government has an essential function in the development of the country and this transcends sector-specific policies. Its chief responsibility is that of creating a political and economic framework of certainty that satisfies the population, generating trust and predictability for it. The success of the governments of the era of stabilizing development –from 1940–1970- lies in that they never lost clarity of the nature of their function and responsibility. In a democratic society, says Ringen, the citizens “control the governors and they rule us”. It is evident that reforms are required in diverse ambits, but what is most required is a government with clarity of vision and understanding that its main obligation is to govern. This would seem obvious, but it’s something that hasn’t happened in Mexico for at least forty years.