Why do they fail?

share on:

Mexican governments have been talking about reforms for decades. The issue has become a mantra: without reforms, they say, it is impossible to achieve high growth rates. Act Two, from the eighties on, a not inconsequential number of reforms have been proposed, the majority of which have had benign effects. In objective terms, the country has been transformed during these years and many things have improved in impacting fashion. However, two paradoxical things have taken place: on the one hand, the mantra of the reforms remains alive and well and is the source of controversy and permanent political conflict. On the other hand, no one seems to be satisfied with the results.
David Konzevik, an exceptional observer of this changing world, years ago developed a thesis on the “Revolution of Expectations”, with which he explains that, in a globalized world, it doesn’t matter how much the reality has improved if the perception –the latter understood as the comparison people make with what happens in other latitudes- is that much is lacking to catch up with the others. From this relativity, states Konsevik, emanate many of the problems of governance and stability of emerging countries. The thesis explains the side of expectations and perceptions, thus of a key source of conflict. What this leaves for analysis is why reforms, supposedly conceived of and designed to improve the reality and render possible a favorable comparison with other nations, do not fulfill their mission.
The answer doubtlessly lies in the basic problem of reforms: to be successful, reforms entail affecting interests, precisely those that benefit from the status quo. If one accepts the notion that to reform implies affecting interests, then the conflict that lies behind the reforms –in fiscal as well as in labor, energy or education- contains very little of the ideological and a great deal of the substantive. Ideology and discourse are instruments to appeal to people’s emotions, garnering supporters and creating a sensation of chaos and epic conflagration. What are relevant are the interests.
Many of the reforms that come to be formally proposed are already impaired by many limitations. In the eighties, the main problem was the inherent contradiction in the reform project: the government wanted to reactivate the economy but didn’t want to undermine the structure of PRIist interests. This rationale entailed evident consequences: the economy advanced on some fronts but continued to be immobilized on others. The relevant question is whether something changed between then and now. In that era the government understood the need for reform, but its ulterior motive was to maintain power. Now that there have been two processes of alternation of parties in government, it is reasonable to ask whether the rationale has changed. One possibility is that, given that the PRI never had to reform itself, the logic continues intact. Another would indicate that it is precisely to preserve the power in a competitive political environment, that the government has all of the incentives to reform properly and fleet-footedly. Time will tell which of these possibilities proved to be the right one.
In their public dimension, reforms have two moments of dispute and much of their limited achievement is explained by the excessive concentration of debate in the first of these. The initial dispute is always in Congress, for it is there that the content of what is proposed to be reformed is debated. It is there that the defense and attack are concentrated –as well as the eye of the analysts and politicians- and where the special interests and those promoting the reforms butt heads. However, beyond the disputes, history shows that, however diluted, many of the proposed reforms are ultimately adopted but the reality practically doesn’t change. The question is why.
The answer lies at the second moment of the reforms: what’s really transcending about a reform is its process of implementation. We all know that in Mexico there’s an enormous gap between the letter of the law and the reality; in the matter of reforms the relevant moment is when a law (a given reform) has to be made effective. The execution of what is proposed for reform is where the true test of the capacity of transformation lies, for it is there, in real life, where the special interests and those charged with turning the reform into reality confront each other. It is at this second moment where, in many cases, Mexico has failed miserably.
Some of the failures are directly concerned with the way the reform itself was decided upon and there is no better example than that of the privatizations, in which the criterion was fiscal revenue and not industrial organization, that is, the manner in which the respective market would function after the transfer is carried out of the privatized entity to a private entrepreneur. Others fail due to their poor or incomplete implementation. For example, some international companies affirm that, in the case of deep-water oil, the law is sufficient for them to be able to compete for a contract, but also that they anticipate an enormous political conflict the day that a bidding process for a contract were to be announced. That is, the law has been reformed but not so the reality,
However conflictive the approval process of a reform, the crucial moment is that of implementation. A reform of the educational system implies a change in the relationship of the government with over one million teachers and the entire structure of union leadership as well as the bureaucracy. Reforming PEMEX would imply, first turning PEMEX into a company rather than the bureaucratic-political entity that grants favors, corruption and slush funds. A reform in any of these ambits implies a political operation of tremendous scope and risks. The point is that the execution of a reform process is much more complex than the debate at the legislative level that precedes it. It is here that the reform touches ground: where it triumphs or fails. Where it achieves a positive result or a mediocre one.
In his great history on the end of the Roman Empire, Edward Gibbon wrote that, for change, “a heart to resolve, a head to contrive, and a hand to execute” are required. What Gibbon knew in the XVIII Century continues to be valid today: a reform is irrelevant if not administered to perfection and this demands a great capacity of political operation. This capacity is inherent in the present government. What remains to be seen is the quality of the reforms that it ends promoting and its willingness for affecting the beneficiaries of the status quo, many of these close to the heart of the PRI.

share on:
Luis Rubio

Luis Rubio

He is a contributing editor of Reforma and his analyses and opinions often appear in major newspapers and journals in Mexico, the US and Europe (New York Times, Wall Street Journal, Financial Times, International Herald Tribune, Los Angeles Times, Washington Post, National Public Radio).