Federalism

The country has undergone radical changes in its political reality and perhaps there is no area in which this change has been greater than in the relative power of the states and their governors. After decades of subordination to the president, governors have become the owners of public expenditures and the main articulators of political power. In principle, this need not be objectionable, except that this power comes with absolute impunity due to the terrible way in which decentralization was carried out:  money was transferred without any accountability.
The issue is not a minor one. The old presidency dominated all aspects of national public life, this was possible because the president had the party, the PRI, on its side to enforce his orders. Once the PRI ceased to be an instrument of the president, which happened with the election of Vicente Fox, the old system collapsed. The PRI stopped being an instrument of the president, PRI members lost their leader; and (almost) all the previous political mindset became irrelevant.
But the losses of some ended up being gains for others. The power that in the past was held by the presidency migrated to the governors, to party leaders in Congress, and to the parties themselves. Today we have a new reality of power, but the institutions of yesteryear remain the same. The result is a huge imbalance. Power has diversified, but no new mechanisms to exert accountability have been established. Instead of reinforcing the institutions, they have been weakened, to the benefit of a few who get rich without any counterweights.
In other terms, power was decentralized, but not federalized. Power flowed from the presidency to other arenas, particularly the governors, but the growth in power was not accompanied with an equivalent responsibility. Governor’s increased their power and, above all, the fiscal resources at their disposal, but that power did not come with a requirement of transparency or accountability. Governors were suddenly awash in tax revenue without having to explain their origin, justify their destination or respond for their use. Most had no idea how to carry out proper spending to benefit the community.
In some cases, such as education and health, the consequences of this process have been pathetic: though these services were decentralized years ago, the federal government continues being responsible for almost everything. Governors organize gala openings of clinics or give away free school supplies without someone ever defining their attributions or obligations. From their perspective, everything is a photo opportunity and nothing else.
The explanation for all of this is simple: the resources are federal but expenditures are a state affair, creating a rift between the source of the resources and the way they are spent. In a properly balanced system, resources would be levied locally and control mechanisms exist at that level. However, it is much easier and politically profitable for the governors to lobby the federal congress and count of the support of the members of Congress from their state that they themselves appointed and help win with those very resources than to invest in people, be accountable for their actions, or have to explain the origin or use of those resources. In short, governors and mayors do not pay any cost for the resources awarded to them, nor do they have any incentive to promote economic growth. Their only interest is spending for self promotion or personal gain.
The country has been subjected to the decentralization, but not the federalization, of power. The difference is absolute. Decentralization involves the transfer of power and resources from the center to other agencies (to governors and political parties alike), but this change does not involve a change in responsibility. Federalism involves a transfer of power and resources to other actors, but with counterbalancing mechanisms so that governors or other actors are forced to respond to the additional power granted to them so that they have no choice but to account for the use of the resources.
Our current reality entails a permanent imbalance both of power and resources. Worse still, the resources are poorly used and often wasted because that is the incentive that governors and members of Congress have before them. The paradox could not be greater: people torment the president for the slow rate of economic growth (i.e., he is seen as the person or power responsible for it), but the resources and the power to decide reside with the governors and in Congress.
The country needs a new political arrangement that redefines responsibilities, generates sources of balance at the state and municipal level, and creates conditions that will actually allow us to revive the economy. Federalism, understood as the simultaneous transfer of power and responsibility, would entail a redefinition of national politics. For example, instead of lobbying the executive, federalization would mean that governors are accountable for their spending and their actions to their own electorate, and not to an ethereal entity such as the federal Congress. Resources would no longer be federal but would become state (or municipal), and would start depending on the local community for their exercise.
What we have had in recent years is an absurd transfer of resources from the federal government to governors without any form of control. Although there are formal control mechanisms (and sometimes laudable efforts by the office of the general auditor when it tries to evidence the extravagant spending that takes place), it is clear that controls are nonexistent in practice: governors do as they please with the existing resources, as we have witnessed in recent years and saw, in “technicolor”, as the old advertisement went, in the recent elections.
Instead of a Lampedusa type of game that aims at giving the appearance that everything is changing but with the true objective that everything remains the same, the country needs a comprehensive reform in its power structure, one that would bring match power and responsibility.
The essence of federalism lies in attaining a balance. It involves the strengthening of the electorate as a counterbalance factor. It also involves, necessarily, a radical change in the structure of financing public expenditures, where states and municipalities become the source of much of the spending that takes place in their jurisdictions. Centralism in Mexico originated in the source of the resources. If we are to create a stable democracy and a balance of power, we must begin with the essence: the sources of money.