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Recent Administrations and Key Policy Debates

Mexico’s democratic transition has been complex. The Fox presidency (2000–2006), as the first non-PRI government since the 1920s, did not resolve many of the country’s deep political, economic and social challenges, as many had hoped. Nor, opinion polls suggest, has the current administration of Felipe Calderón (2006–present) succeeded in doing so. Nonetheless, important steps have been taken. In the middle of the 2009 recession, voters handed a resounding victory to the PRI in the mid-term elections, which gave them a virtual majority in the lower house (in coalition with the small Green Party) and a chance to influence policy significantly over the next few years.

The Fox Administration:

President Fox faced a divided political landscape where the formerly all-powerful PRI and the left-of-center PRD dominated Congress and ran most state and local governments. Although Fox maintained very high popularity throughout his six-year term, he was unable to make many inroads in policy that required congressional approval. His hopes to pass a major tax reform that would raise Mexico’s public sector revenue floundered in his first year, and he had little success in efforts to reform the energy sector, overhaul the public pension system, change labor laws, or implement a new regime for indigenous rights.

His one major legislative reform was a transparency law to allow citizens’ access to most public documents (similar to the U.S. Freedom of Information Act), a significant achievement after decades of one party rule. He also succeeded in increasing federal social programs gradually, especially the cash-transfer program Oportunidades, which doubled its coverage to almost one in four Mexican households by the end of his term and has served as model for social projects in places such as Brazil, El Salvador, Sri Lanka, and even New York City.

The Calderón Administration:

The current administration of Felipe Calderón (2006–present), also from the PAN, has proved more successful than its predecessor in passing reforms through Congress, yet has received strong criticism for devastating economic and security problems that have beset the country. Calderón, a 42-year old former Congressman, Fox’s energy secretary, and a party leader, won a highly contested election by just over a half percentage point in official returns.

The second place candidate, former Mexico City mayor Andrés Manuel López Obrador of the PRD, has claimed that fraud prevented him from winning the election, and he has refused to recognize the current government, though most elected officials of his party work closely with the federal government. The PRI suffered a devastating defeat, winning just over a fifth of the votes in the presidential count, but bounced back to win the mid-term elections.

The primary emphasis of Calderón’s administration has been fighting organized crime, which he has identified as a major threat to the integrity of the state. During his term, several other major policy issues have also come to the fore, including:

Fiscal reform:

 In 2007, Calderón won approval of a pension reform plan for government workers which limited the long-term burden for taxpayers of pension plans. His 2009 proposal to raise Mexico’s value added tax by two percent was changed by the Congress into one that raises taxes by one percent and taxes high-earning indiv-iduals and corporations at a higher rate.

Mexico collects only 10% of GDP in taxes,3 one of the lowest rates in the hemisphere. While most political leaders agree that the government will have to raise additional revenue in order to reduce poverty, improve education, and address crime, the political will has been difficult to summon, particul-arly in an economic recession.4

Rule of law:

In 2008, Congress passed a major constitutional reform to establish the presumption of innocence, mandate public, oral trials for criminal cases, implement alternative dispute resolution for lesser crimes and civil matters, and overhaul the system of public defenders. Several states had already started on these reforms before the federal legislation, and all are expected to comply by 2016. Progress has been fairly slow on these changes at the federal level, but several states are moving quickly through their own initiatives.

Congress passed a second reform in 2008 mandating changes in country’s police forces, including standardizing reporting requirements on crime, creating a national police database, and developing a standard career path for police officers. The government has developed an increasingly professional federal police force of roughly 35,000 officers, including investigators and CSIs, and is investing significant resources in the country’s largest state and municipal forces in hopes of achieving similar levels of professionalization. These efforts have to compete with significant existing deficiencies and the corrupting influence of organized crime.

Energy reform:

Mexico is the world’s sixth larg-est producer of oil but its existing reserves are dropping quickly and the state-run oil company has limited capacity in deep-water exploration, where most of Mexico’s oil reserves lie. A 2008 energy reform improved Pemex’s administration and account-ability, but to maintain competitiveness in energy, Mexico will need to find ways to promote more effective exploration, extraction, and refining of oil and gas. There is an ongoing debate on whether to allow private investment with risk contracts in some sectors of the oil industry.

On October 10, 2009, Calderón abruptly closed the electricity provider Luz y Fuerza del Centro (LyFC), the public company that provided electricity to Mexico City and three surrounding states. The government and its supporters pointed to the overwhelming inefficiencies, unreliable service, and financial losses of the company, requiring $1.9 billion a year in subsidies. Critics have countered that this appeared to be an attack on a union, the Sindicato Mexicano de Electricistas, that sup-ported Calderón’s competitor in the 2006 presidential election, Andrés Manuel López Obrador. The services previously provided by LyFC are now covered by the Federal Electricity Commission, a government company that supplies electricity in the rest of the country.8

Political reform:

 In the fall of 2009, President Calderon announced a list of ten reforms that he wanted Congress to approve within a year, with special focus on re-election for mayors and members of Congress, reducing the number of seats in both the Chamber of Deputies and the Senate, and creating new mechanisms for allowing independent candidates and citizen-led legislative initiatives. The proposals are considered by most experts to be innovative initiatives. Prospects for passage remain unclear.

Competition policy:

In April 2010, President Felipe Calderon announced a ten-point plan to overhaul competition laws, seeking to strengthen competition among companies by levying stiffer fines on firms that act as monopolies and jail terms of up to ten years on their managers. The proposal, viewed as a positive step by many analysts, passed the lower house but stalled in the Senate.

Both the private sector and labor are dominated by monopolies and oligopolies left over from the period of one party rule. This is perhaps most evident in television where there are only two private stations (Televisa and TV Azteca) and in tele-phones, where a single company (Telmex) controls almost all of the market. In 2006, the Mexican Congress passed a law to reg-ulate radio and television that appeared to consolidate the control of the two private networks; however, a 2007 Supreme Court decision overturned some elements of this law, and new legislation is still pending.

The Political Future

Mexico today faces many challenges. Most political actors agree on the nature of these challenges, but differ on the right solutions to address them or the priority they should be given. In the past two administrations, the PAN has been the leadership, with different factions exerting more influence than others at different times. This may be changing.

Mexico’s next presidential election is in 2012, and the lead-up suggests it will be an interesting race. The presidential contest in 2006 was primarily between the PAN and the PRD, and the congressional and municipal elections largely followed suit. In elections since that date, the PRI has reemerged as a viable force and the PRD has lost much of its support. The PAN is also less popular, but not by as much. However, with a charismatic candidate or a powerful lead issue, any of the main parties may find that it can be viable and win the next presidential election.

The PRI, now playing within a democratic system, has benefitted from citizens’ frustrations with the economic recession and the perception of insecurity. Anecdotal evidence suggests that some voters remember more stability under the PRI and have voted accordingly. Opinion polls for January through May of 2010 suggested that 39 percent of voters would choose the PRI. The PAN trailed at 17 percent and the PRD at all balance of power (see chart, page 11), at least a couple of conclusions could be drawn. First, the PRI proved itself powerful yet fallible, winning nine races but failing to sweep the elections. The elections also showed that Mexicans are able to hold the ruling party accountable by voting the incumbent party out of office in six, or half, of the elections.

By Andrew Selee, Christopher Wilson, and Katie Putnam, The United States and Mexico: More than Neighbors, September 2010

Woodrow Wilson International Center for Scholars