Mexico Under Salinas: Towards a New Record for One Party's Domination?

COUNTRY REPORT Mexico Under Salinas: Towards a New Record for One Party’s Domination?

JOSE LUIS MENDEZ*

Nowadays, the Mexican political regime is one of the oldest regimes in the world. Established in 1929, in a few years it could break the USSR record for a party in power. After an important crisis in 1988, president Salinas managed to get the ship out of the storm with an effective set of macroeconomic policies. In fact, he has been seen internationally as a very effective leader, who achieved what Gorbachev could not: a deep economic reform without a political crisis. He proposed and succeeded in starting a North American Free Trade Agreement and reformed the state structure along the lines of what he calls ”social liberalism.” The prospects for the regime and the party in power look good for the presidential elections of 2994. Nothing however assures that the current policies will really help to solve Mexico’s unemployment and inequality problems. The vertical political and administrative structures are not well suited for that purpose and are a source of political instability. It may be the case that the social-liberal model brings economic growth but does not help in bringing about a better distribution of income and more democracy. In this case, either in 2994 or later, the regime may face dificulties and it may not allow for a pacific political transition. To avoid this, the country will need active social, small business, regional and educational policies, handled by a professional administrative apparatus. It will also need more democratic electoral and policymaking systems plus a working division of powers and federalism. In a country with long authoritarian traditions these are difficult to attain, yet possible objectives.

During the last five years, Mexico has captured the attention of the international community, as a result of President Salinas’ program of reforms. This program has included sweeping initiatives, such as a North American Free Trade Agreement (NAFTA) which began in Jan- uary, 1994.’ Salinas has also introduced an innovative program against extreme poverty, which has attracted the interest of other Latin Amer- ican countries. Salinas seemed to be an effective leader, who achieved what Gorbachev could not: a deep economic reform without a political crisis. Yet Mexico’s reform program and future prospects are in the balance. If Salinas‘s policies succeed, Mexico could set a new record for

* El Colegio de Mexico and Universidad Iberaamericana, Mexico City

Governance: A n lnternational Journal of Policy and Administration. Vol. 7, No. 2, April 1994 (pp. 182-207). 0 1994 Blackwell Publishers, 238 Main Street, Cambridge, MA 02142, USA, and 108 Cowley Road, Oxford, OX4 IJF, UK. ISSN 0952-1895

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a party in power. If they fail, the current regime may face difficulties and may not be able to allow for a pacific political transition. The country, which currently ranks 11th among the OECD economies, may even enter a period of economic and political instability.

The origins of the current Mexican regime go back to 1929, when the winners of the long and bloody Mexican revolution (1910-1917) founded the Partido Revolucionario Institucional (PRI) in order to avoid a self- destructing competition among the revolutionary leaders. As the pre- sumptive heir of the revolution, the PRI has held the presidency, the Congress and all but three state governorships since the 1930s. If the PRI candidate wins the 1994 presidential elections and holds power until 2000, Mexico will be only a few years short of breaking the USSR Communist Party record for a party in power.2

Prior to 1988, no opposition party had been able to pose a real threat to the PRI. However, the federal elections of that year were the most disputed elections in contemporary Mexican history. They were also the most questioned, due to serious irregularities of the electoral process. As several authors have noted (Aguilar 1992, 207; Loaeza 1992a, 33), Salinas started his presidency with the very severe accusation of usurpation.

Despite these charges of fraud, the new president would soon man- age to recover part of the regime's legitimacy. He did so by reinforcing what had been the most solid column of the regime in the past: an "administrative" legitimacy based on a relatively effective management of economic and social policies. In fact, Salinas has formulated and, at least to some extent, implemented a global socio-economic model. He has been able to talk of a "reform of the state" along the lines of what he has called "social liberalism." This model represents Mexico's fourth attempt to reach what has been its main goal for centuries: a "modern," that is, integrated and stable nation (Meyer 1992). Although it may end up backfiring, it is fair to say that, in the present context of a crisis of ideologies and models, this model's design confirms Salinas as a con- ceptually capable and resourceful president.

With regard to the political realm, after 1988 Salinas himself recognized that the era of the "almost one party system" had come to an end. The political challenge for the PRI political class was to go from that system to a dominant party system. However, Salinas moved slowly in this area. Although in 1993 significant changes were made, overall he has implemented a political liberalization rather than deep and global democratization (Loaeza 1992a, 2; ODonnell and Schmitter 1986, 6-14; Middlebrook 1986).

Democratization is neither an easy task nor the only one facing Mex- ico. Considerable sections of the political classes are openly against democratization, while many Mexicans are indifferent. However, as I will explain below, the policymaking failures of the 1980s, the political discontent and mobilization of-1992 and 1993, as well as public opinion

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surveys have shown that it is not wise to postpone taking decisive steps towards such a democratization. Furthermore, although Mexico is a middle sized economy, it still is a developing country with many problems, especially an extreme social, economic and regional heterogeneity. The current political structure is not well suited to sustaining long-term policies that address these problems. Mexico has lacked not only an effective and credible electoral system, but also operative administrative checks and more participatory decision-making structures. In other words, even if someday the state electoral system is improved suffi- ciently, this would only lead to what O’Donnell (1992) has called a “delegative democracy,” a democracy where we could elect a president through unquestionable procedures, but that would provide him with a blank check a democracy can later regret (as the Peruvian and Gua- temalan cases show). We indeed need less questionable election procedures, and President Salinas has made progress toward them. Never- theless, we need to make sure at the same time society is able to limit, monitor and provide inputs to the executive through responsible, well- equipped and independent legislative and judicial powers as well as strong civil organizations. Mexico needs to advance towards representative democracy.

As the next (1994) presidential elections approach, the Salinas reforms face major questions and challenges. Is the Salinas program of reforms failing in the last year of the presidential six-year term, as has happened in the case of the last three presidents? If the reforms do not fail will less-questioned electoral and decision-making practices develop? Fi- nally, will Salinas’s model lead to a more integrated nation? In other words, would it reduce or increase the deep social, economic and regional heterogeneity of the nation? This article presents an overview of the principles of the Mexican regime since its foundation (1929); the causes that shook it in 1988; the Salinas reforms to get the ship out of the storm; an assessment of such reforms; and some possible future perspectives.

THE PRINCIPLES OF THE MEXICAN REGIME

Since 1917, Mexico has formally had many of the elements of a federal and democratic republic. Elections have been held throughout the country for municipal authorities as well as for legislative and executive authorities at the state and national levels. The country has had various states (currently 31) and one federal district, a bicameral congress and a judicial power. Since the 1940s, various opposition parties have been recognized officially. However, when one looks at political practices rather than forms, one sees a regime in which relations between political actors have been based on rather vertical principles, as I indicate.

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The Electoral System

Since the 1920s, in one way or another elections have been controlled by the federal government, which has always been in PRI hands. Throughout the years, the PRI and the government have been constantly accused of fraudulent electoral practices. It has been difficult to establish the frequency and extent of fraud since the government and the PRI have always dominated the entity that organizes elections. Accusations of fraud have been very widespread. The long history of PRI’s control of elections has severely eroded the credibility of the electoral system. We must recognize, however, that the PRI political class has not been too closed and presidential elections have allowed for some circulation of elites through a significant turnover of top and mid-level personnel every six years. An important and increasing pro- portion of these personnel has had weak links with the PRI (Centeno 1990).

The Parties

Mexico is different from most dominant party regimes in that there has been no parallel party bureaucracy. Since the 1950s, the state bureaucracy has controlled the PRI and the army. Since 1934, presidents have been members of the cabinet prior to their election. The president is the real head of the PRI and the party leader is first of all loyal to him (the last two, for instance, began their periods stating that openly). There are two important opposition parties, the PAN on the right and the PRD on the left. The former suffered a split after it entered into an alliance with the Salinas government, which has adopted the PAN economic credo and has allowed three PAN governors to reach power (one of them by designation). The PRD, on the other hand, felt the effects of a strong political offensive from the government including repression by local strongmen. In 1991, the left lost many of its 1988 votes. This was due to the more effective macroeconomic and social policies of Salinas. In addition to improving the president’s image, these policies stole some of the PAN and PRD slogans and gave back to the PRI its place as a sort of ideological center. However, the lessened support for the left is also due to its internal divisions and organizational insufficiencies. Moreover, it has been accused of excessive personalism and it is still distrusted by many Mexicans (Woldenberg 1992, 209; Loaeza 1991, 399).

The Legislative and Judicial Branches

The Mexican system is clearly a presidentialist one. The president is elected by popular vote and has extensive military, legislative and ex-


ecutive legal powers. The president names his cabinet, most of which does not pass through any ratification process. He formulates and ini- tiates legislation. In general, congress is very weak.

Since a majority of members of congress and the supreme court have been PRI members or sympathizers, it is difficult to find a case where the legislative or judicial branches have altered the substance of a presidential initiative. Control over mismanagement and corruption (nowadays much lower but still important) takes place at the treasury and the controller general, both of which are cabinet agencies.

The Bureaucracy

As I stated earlier, the president names his cabinet with almost no restrictions and, especially since the 1970s, all ministers are highly dependent on him. There is no extensive civil service. Medium and high level civil servants are often linked together by ”camarillas,” that is, bureaucratic teams where loyalty or personal knowledge of the head of the team is crucial (Bailey 1988, 76). Independently minded advisers are few within the bureaucracy. The president can make changes at will and the revolving door between the private and public sector moves very slowly.

Purcell and Purcell (1977) defined the Mexican policy style as distributive-regulatory. This policy style has three components. First, Mexico has had both statist and Roman law-based institutional traditions. Thus, there is a tendency towards heavy regulation in many policy areas, allowing many civil servants to make exceptions based on the exchange of personal favors. A second tendency is to apply the law or receive services thanks to personal favors or clientelistic links. Finally, populism has been common.

The Social Groups

The state, through the PRI, has had a corporatist control of many unions, both rural and urban. While the state has many legal mechanisms of control, labor is also weak because it is quite fragmented and partially unorganized. The middle classes are to a great extent out of the corporatist system but its few organizations are dispersed and remain small. For the most part, entrepreneurs remain also outside the PRI corporatist system. However, they have to belong by law to certain business chambers, some of which may strongly question public policies but only exceptionally the regime’s legitimacy.

The Governors

Intergovernmental relations are centralized compared with other federal systems. The federal government receives around 80% of total revenue

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and determines its distribution to the states. With a few exceptions, governors are weak figures compared with counterparts in most federal systems.

The Press and the Intelligentsia

The press probably has been more independent than congress or the judicial branch. While most journals and newspapers practice a sort of self-censorship, several intellectuals and journalists have been highly critical of the regime without being threatened or killed (though some have been). The government's response to these critics has been for the most part either to talk to them in order to encourage them to change their minds, simply ignore them or, in some cases, play a monetary rewards-and-penalties game.

All these features have led some academic observers and many party ideologists, especially from the left, to emphasize the degree of presidentialism of the Mexican system. However, such features should not be taken to mean that the Mexican administrative and political system is not a complex one. First, social actors such as some parties, labor, the press, the Catholic Church or the business sector - especially business - have considerable power and the president often has to bargain with them. Second, Mexico is a country of 85 million people and one-fourth the territory of the United States. In order to provide services across the nation, a complex bureaucratic network of local, state and federal civil servants was developed. Even a strong and cen- tralizing president cannot keep a firm hold on each of the points of this multilayered system. In addition, various external actors, such as the US government and the US press, can exert significant influence on presidential policies, though the US government has consistently sup- ported the Mexican regime since at least the 1940s. The complexities of policy formulation and implementation, often overlooked by observers, indicate that the Mexican state is more "politicized (Chalmers 1977; Mendez 1990; 1991) than is usually thought.

THE ECONOMIC AND POLITICAL CRISES OF THE 1980s

While Mexico has a capitalist economy, the number of public enterprises has been significant since the 1930s. During the 1970s these enterprises expanded notoriously. Lacking any checks and balances, President Jose Lopez Portillo (1976-1982) was able to bet on recently discovered oil reserves to borrow heavily from abroad, helped by the then very low interest rates. Portillo started an "ask and spend cycle that led to an economic crash in 1982. In 1981 and 1982 oil prices dropped and capital fled to the US. The government could not service its foreign debt. The peso was devalued. In response to capital flight, Lopez Portillo expro- priated all private banks. These events, together with the discovery of


various cases of rampant corruption, turned an economic crisis into a political one.

The new president, Miguel de la Madrid Hurtado, took office in December 1982 and in order to obtain new loans signed an adjustment agreement with the IMF. De la Madrid had to bail out some important private firms, which in turn cut personnel across the board. From 1982 to 1988 wages were cut 40% (OCDE 1992,58) and unemployment grew from 7% to 17% (Loaeza 199213, 73). During the first half of his presidency, de la Madrid managed to avoid the deepening of the crisis and regained control of the economy. He put in place anti-corruption, democratization and decentralization programs and improved the administrative organization of the state. De la Madrid reduced the size of the state by cutting personnel3 and by privatizing state owned enterprises. He opened the economy. However, in 1985 de la Madrid began to lose control of the economy, either because of political needs (which demanded putting aside the austerity program), natural disasters (the 1985 earthquake) or declining oil prices. High inflation rates (160% in 1987 and 51.7% in 1988), the crisis of the stockmarket (October 1987), splits in the PRI political class (1988), general discontent with the several years of declining wages and increasing unemployment, and a poorly received PRI candidate combined to form a crisis scenario at the end of the presidential term.

The 1988 elections were no doubt the most disputed and questioned federal elections in the contemporary history of the country. Salinas was declared the winner by the smallest margin in almost 60 years (50.47%), in the midst of a credibility crisis. The PRI lost the two-thirds majority needed to pass constitutional changes. As a result, Salinas began his administration as a very weak president. This fact, among others, pushed him to take quick and spectacular measures. For instance, he put in jail a corrupt member of the old corporatist structure as well as an entrepreneur apparently involved in illegal stockmarket practices. Soon after, he started a program of reforms that put the Mexican economy on a more stable route.

SALINAS REFORMS

To date Salinas has succeeded in two areas. First, he has achieved macroeconomic and budgetary stability. Second, he has been able to start a “Reform of the State” in order to implement a new development model, along the lines of a so-called ”social liberalism.”

Macroeconomic Policies

Salinas reduced the public deficit from around 12% of GDP in 1988 to a 0.5% surplus in 1992 (El Financier0 14/03/93:4). This change is due not to receipts from privatizations but to public expenditure reductions and

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revenue increases. Revenue increases were achieved by fiscal reforms that started in 1987 and eliminated many fiscal exemptions, tightened the control over tax evasion and introduced some new taxes (OCDE 1992, 137).

In 1989-1990 Mexico achieved a significant reorganization and reduc- tion of its foreign debt. The extent to which the debt problem has been solved is subject to discussion (Castafieda 1993, 65), but the 1989 agreement certainly led to lower interest rates and greater capital inflows.

Through the yearly renovation of a formal ”pact” between labor, business and the state (started in 1987) as well as restrictive monetary and wage policies, Salinas reduced inflation from 51.7% in 1988 to 19.7% in 1989, 29.9% in 1990, 18.8% in 1991 and 11.9% in 1992. Currently inflation appears likely to end up below 10% in 1993, though labor organizations question these inflation figures. GDP grew 3.3%, 4.4%, 3.6% and 2.6% during the same years. From 1988 to 1992 real wages in most sectors either grew or stabilized. Salaries in the manufacturing sector grew significantly (5.1%) between 1988 and 1990 (OCDE 1992, 60). Oil exports went down from 80% of total exports in 1982 to 30% in 1991.

The Reform of the State

Salinas has set three goals for the reform of the state. The first is the dismantling of state interventionism in the economy; the second is the substitution of the “owner state’’ by the “promoter state”; and the third is the emergence of the ”solidarity state.” Luis Aguilar (1992, 209) has noted two lines of reasoning behind this reform. One the one hand, Salinas argued that state ownership and excessive interventionism meant mismanagement of enterprises and programs. On the other hand, he argued that an over-extended state was incapable of effectively focusing on its most important objectives, namely its social and nationalist functions.

Dismantling State Interventionism

Salinas dismantled state interventionism in the economy through sub- stantive privatization and deregulation. Although de la Madrid began to privatize state enterprises, he did not go very far. The percentage of the GDP accounted for by the public sector went down only 1.5% from 1983 to 1989 (from 15% to 12.5%) (Aguilar 1992, 200). Salinas privatized most of the big state companies as well as the banks. In this way, the national telephone company (Telefonos de Mexico) and the two major airlines were privatized, among others companies. The national oil company (Petroleos Mexicanos, PEMEX) was not privatized, since it constitutes a traditional nationalist symbol. However, it was reorga- nized. The privatization program from January 1989 to January 1992


generated additional annual income for the state equivalent to a 6.3% of GDP, lower only than that of Great Britain and New Zealand among the OECD countries. Between December 1982 and December 1988 the number of public enterprises decreased from 1155 to 646. In December 1992 there were 217 (Rogozinski and Casas 1993, 24). Public sector investment went from 8% of the GDP in 1982 to 3.6% in 1992 (Meyer 1993, 34).

Salinas broke openly with past traditions in various respects by eliminating market regulations (Levy 1993). First, he changed the long ven- erated #27 constitutional article, allowing the sale, leasing and purchase of ejido land.4 Second, he dramatically reduced price controls (to only a few basic food goods and oil). Third, he eliminated some important restrictions for freight transportation nationwide. Fourth, he reduced foreign investment and financial market restrictions. Fifth, in addition to the elimination by de la Madrid of many fiscal exemptions and subsidies to business (total public subsidies were reduced from 12.8% of GDP in 1983 to 4.1% in 1988) (OCDE 1992, 143), Congress recently passed an anti-trust and a ”standards” law. Sixth, Salinas opened the economy to foreign competition (in 1992 the average tariff was slightly above 10% and there were almost no import licenses) (OCDE 1992). As is well known, in 1991 Salinas started negotiations for a North American Free Trade Agreement (NAFTA), reversing a long tradition of anti-US sentiment. NAFTA seems to have been the result of Salinas’ realization that, without it, Mexico could never obtain the capital inflows needed to finance the burgeoning current account deficit associated with higher growth - let alone infrastructure development and social policy. In 1991 it was clear that the debt deal and the nickel-and-dime privatizations had not been enough. NAFTA and the reprivatization of Mexican banks would attract between $22 and $27 billion over the following 18 months. For some observers, this was Salinas’s greatest success (Cas- tafieda 1993, 61). After the approval of parallel agreements on the environment, labor standards and safeguards in November 1993, everything was set for the agreement to start in January 1994.

The Promoter State

A second aspect of Salinas’ state reform is the switch from the ”owner state’’ to the ”promoter state.” This has meant limiting state industrial programs basically to specific industries (e.g. automotive), exports, productivity, as well as small and medium enterprises (which presumably create most of the new jobs). In this way, for instance, the main development bank, Nacional Financiera, was reoriented toward small businesses - which can now get lower interest loans. Moreover, several regional banks have also been oriented in the same direction. The small business program has been broadly publicized. There has also been a

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National Agreement for Raising Productivity and Quality (1992) and another for the Modernization of Education (1993). Salinas has also improved the credit flow to the countryside with a new ”pro-countryside” program.

The Solidarity State

The third aspect of Salinas reform is the emergence of the ”solidarity state.” Since 1989, Salinas has been implementing a ”solidarity program’’ (better know as PRONASOL), which has focused on supporting public works across the country. The program has meant greater efforts and precision in social policy, which went from a more general approach to a focus on the extremely poor. Arguably, PRONASOL indicates a “new social policy” based on four declared principles, including: a respect for local initiatives and organizational structures; the program ”processes initiatives and demands, instead of imposing solutions” (Gonzalez 1993, 190); ”a full and effective” popular participation in the formulation, implementation and evaluation of projects; “solidarity” policy instruments, in which public funds are matched by local contri- butions in work or goods, so ”it is based on a corresponsibility that ends paternalism;” and ”it is based on the transparency, honesty and efficiency in the use of the nation’s funds” (Gonzalez 1992, 190).

Social policy expenditures had been cut during the de la Madrid administration. In 1988 the health, education and welfare expenditures were 5.6% of GDP, compared with the 8.2% average of 1981-1982 (OCDE 1992, 107). Infrastructure, education, health and welfare had notably deteriorated by 1988. Poverty increased. By the end of the 1980s close to 32% of the population were below the official ”poverty line” (Loaeza 1992b, 63). According to official figures, 20% lived in extreme poverty in 1987 (OCDE 1992, 118-122). During this period, illegal im- migration to the US increased significantly; the percentage of people born in Mexico living in the US went from 18 to 24% of all people born outside the US (Lozano 1992,55) (today Mexicans are the second biggest US minority, after blacks).

Salinas was able to reverse the declining trends in social expenditures. Health, education and welfare expenditures as percentage of GDP began an upward trend from 1989 on (1989, 6.0% of GDP, 1990, 6.3%, 1991, 7.4%) (the budgeted percentage for 1992 is 8.2%) (OCDE 1992, 107). By the end of 1993 social expenditures would have grown about 78% in real terms compared to 1988 (Sedesol 1993, 234). The funds for the solidarity program have been increasing from 1.6 billion pesos in 1989 to 6.8 billion in 1992, with real annual increases of 36% (Sedesol 1993, 234). Solidarity was only 8% of total social expenditures in 1991 (most of the other 92% goes to wages and other expenditures for edu-


cation and health), but it was 45.5% of all social investment funds (Gonzalez 1992, 181, 183). Since the expenditures for the program in 1992 (6.8 billion) and the 1993 authorized budget (7.7 billion) were higher than the 1991 funds, we could expect those percentages to be higher in 1992 and 1993. PRONASOL investment went from 0.45% of GDP in 1989 to 1% in 1991 (Sedesol 1993, 234).

By 1991, the PRONASOL had became the most publicized program of the Salinas administration. Slowly it developed a nationwide administrative network, which today includes more than 100,000 local committees, coordinated by the program delegates in each state. Arguably, each committee is elected by the community in order to help it identify and resolve its main problems through collective and ”public-private” mechanisms.

A significant portion of the money distributed to the states is chan- nelled through this program. This, together with the fact that it is one of the most favored programs of the president and led by one of the probable presidential PRI candidates for 1994, has made the solidarity delegates powerful local figures.

Ad minis trat ive Reform

President Salinas’ new vision of the state led to an important administrative reorganization in 1992. The administrative structure he inherited had been the result of the 1977 reform. This reform removed control over expenditures from the Treasury and gave it to a new Secretariat of Programming and Budget, which as a result became the most powerful cabinet agency. The idea was to free expenditures from the fiscal conservatism of the Treasury. Expenditures were supposed to depend on planning rather than on revenue flows and allow for a more devel- opmental oriented state. However, several years later the Budget Sec- retariat was dominated by a group coming from the Treasury. This group used the Secretariat to reach the presidency (both de la Madrid and Salinas were Secretaries of the Budget before becoming the PRI presidential candidates). Nevertheless, by 1992 this Secretariat had lost many of its functions and most of its original rationale, given the new conception of the state as an entity focused on social policy and economic promotion instead of direct ownership (Hernandez 1993). In addition, planning became very general. Therefore, in 1992 the Budget Secretariat was eliminated and control over expenditures was given back to the Treasury. However, a new Secretariat of Social Development was created out of one branch of the Budget Secretariat and was given control over the solidarity program. Thus, it may be a counter-power, at least to some degree, to the now overwhelming power of the Trea- sury. This Secretariat also absorbed the former Secretariat of Urban Development and the Environment. Although it has several urban and

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environmental programs (e. g. a program to encourage the development of middle sized cities), the name of the new Secretariat shows that the priority is now social development. Other import initiatives approved in 1993 were Salinas’ proposal to make the central bank a more auton- omous entity and the creation of a special commission to oversee the implementation of the anti-trust law. Finally, Salinas improved the law against civil servants misconduct.

The Political Changes

Salinas has implemented various changes in the electoral system. In 1990 two important modifications took place. First, with the help of PAN, a governability clause was passed, by which the majority party, even if it wins only 35% of the votes, automatically receives a sufficient number of additional seats to guarantee it a simple majority in congress. Second, an allegedly more independent Federal Electoral Institute and an Electoral Tribunal were created to organize the electoral process. With a more “professional” face, this institute has been attempting to improve the credibility of the electoral system. For instance, it has been distributing a voting photo ID to help avoid fraudulent practices. In the fall of 1993 Congress passed a second political reform, eliminating the governability clause and the (auto) confirmation of electoral results by the PRI-dominated Congress. Electoral results would now be validated by a more independent Electoral Institute and, in case of dispute, by the Electoral Tribunal. This reform also introduced a greater represen- tativeness of the Senate, greater participation of opposition parties in sub-national electoral entities, and a better regulation of campaign fund- ing, among other things.

Salinas has also taken important initiatives in three other related areas. First, in 1992 a broad reform for the different religious denomi- nations was passed. This reform opens the way for possible involve- ment of priests in politics. For example now priests can be elected or hold a public position as long as they abandon their religious status (Rodriguez 1993, 22). However, the reform also helps to better regulate the churches since they have to obtain a formal state authorization to operate.

A second important political initiative was the creation in 1990 of a National Commission for Human Rights. This is a partially independent entity which can make recommendations to governments about mis- handled suits or other irregularities affecting human rights.

A third major political reform of the capital, the Federal District (8 million people), was passed by the House of Representatives in 1993. According to this reform, in a few years the mayor would be chosen by the president from the members of the majoritarian party (now he


can choose anyone he wants). The reform would also strengthen the legislative and local decision-making bodies.

ASSESSMENT OF REFORMS AND POLICIES

Macroeconomic Policies

It is clear that in this realm Salinas has attained necessary and important achievements. The country experienced moderate growth during his five years, compared to the stagnation during most of the 1980s. Infla- tion was indeed controlled, allowing for a more certain economic environment, more productive investment, etc. However, the Salinas model has also encountered problems.

First, the current account deficit increased dramatically. In 1992 it grew 72.7%, to reach 22,800 million US dollars (6% of GDP) (El Finan- ciero, 04/22/93:4). The deficit represents an aspect of the economic dilemma faced by all Mexican presidents in recent decades. It seems that in a developing economy, like the Mexican one, high growth rates are associated with either high inflation rates or significant current account deficits. This is in part due to the traditionally limited commitment from the Mexican private sector to long-term investment.

The government first argued that the deficit was not a problem because all growing economies need to import capital goods to be able to grow more later. Furthermore, foreign capital flows will likely sustain the deficit. However, that government’s stand was questioned by many economists on two grounds. First, by late 1992, 70% of foreign investment was portfolio-oriented and only 30% direct foreign investment. Therefore, most foreign capital can leave at any moment. Even worse, according to CastaAeda (1993, 64) much of the portfolio funds was Mexican capital returning from abroad. In addition, a large portion of the imports is composed of final not capital goods (INEGI 1993, 56; EI Financiero 04/06/93:4; Gbmez 1993; CastaAeda 1993, 64). Thus, most observers, and even the central bank, view the deficit as a critical problem (Weintraub 1993; El Financiero 04/22/1993; Reyes Heroles 1993a, 7). Since inflation persisted and the current account deficit reached extremely high levels in 1992, Salinas decided to slow down the economy. Never- theless, the effects of slower growth rates on the deficit could be can- celed out by the exchange rate policy that is likely to keep the peso overvalued.

Another problem is that, despite the several programs, the government policies have involved serious difficulties for potentially productive medium and small enterprises and for the non-export economy, which represent a significant portion of total employment (Gomez 1993; Abarca and Vazquez 1993; El Financiero, 05/26/92:16). Although this is an area that lends itself to rhetoric by both the state and business chambers, some business organizations have said that the small busi-

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ness program has failed (E l Financiero 09/21/92). In any event, the last annual report of the central bank recognized that many businesses have gone bankrupt or exist on the verge of bankruptcy ( E l Financiero 04/22/ 93). According to Morici (1993, 53), from 1990 to 1992 about 10% of Mexico's 90,000 small and medium-size businesses failed, costing an estimated 100,000 jobs (more than one-sixth of all new jobs created in 1988-1992). In general, credit and the incentives for production have been limited. Moreover, the support for basic and policy research, by the state and especially by business, is extremely low (OCDE 1992, 168). Despite all the programs supporting exports, they have not increased rapidly enough. Indeed there have been very significant efforts. Unfor- tunately it has not been easy for the productivity and education "Na- tional Agreements" to go beyond well thought-out but still, in many ways, wishful statements.

The burden of the adjustment program has fallen mostly on workers. Wages have increased very little compared to what they lost in the 1980s. What seems to have been an increasing labor discontent has been strongly controlled. Workers are being asked to be more productive with more and more "flexible" contracts and still very low salaries.

In short, the macroeconomic reforms still have not involved enough microeconomic benefits for business and workers.

It is clear that a lot remains to be done. Although since 1988 the economy has grown at rates higher than the population growth rate, it still faces important problems. For instance, growth rates have not been very high and have even declined since 1991 (Chile has done much better; actually, from late 1992 there has been a debate concerning whether the Mexican economy is suffering a "deceleration" or a "reces- sion") (E l Financiero 06/04/93). Furthermore, growth has not necessarily been associated with the creation of enough new jobs, not to mention permanent and productive new jobs. While more developed nations today are preoccupied by a supposed trend of late twentieth-century capitalism toward "jobless g r ~ w t h , " ~ Mexico has always faced a large unemployment problem. Although figures about the number of jobs created annually vary, it is a fact that the economy has created fewer than the 800,000 new jobs that are demanded every year. According to one study, only 583,208 new jobs were created in 1988-1992 (E l Finan- ciero 11/30/92). Therefore, the fact that the informal economy has reached around 25% of total employment comes as no surprise (OCDE 1992, 236). Recent unofficial estimates put unemployment above 10% (OCDE 1992,237) and underemployment at 25% (Latin American Special Report 1992, 8; official estimates clearly underestimate these figures). In addition, the economy has been increasingly based on services rather than industry ( E l Financiero 04/12/93:4) and productivity remains low in many areas. Finally, the Mexican economy still is highly dependent on foreign capital and the US economy (between 60% and 70% of both exports and imports have been with that country). Although an open economy


is no doubt good in many respects, a basic goal should be to open the possibilities for Mexican consumers and business to buy and sell high quality products among themselves.

There is still too much concentration of wealth and too many obvious monopolies or quasi-monopolies. It may be true that a nation needs big groups to effectively compete in the today’s globalized and very com- petitive world economy (Salinas 1993: X). However, the economic share of these groups may be too big in Mexico. According to Morici (1993: 52), the 25 largest Mexican firms account for 47% of GDP, as compared to 4.3% in the US. Mexico has had one of the worst distributions of income in the world. In this regard, the anti-trust law is a welcome improvement, but it overlooked obvious and very inefficient monopolies, such as the phone company. In addition, although NAFTA is likely to increase employment overall, the already significant problems facing many small business may increase as NAFTA unfolds. For Morici (1993, 52), over the next several years about 40% of small and medium-size businesses could shut down (although they are likely to grow in other sectors). Moreover, NAFTA may favor the already rich north against the poor south. Thus, we would need strong regional, training, and small business policies to balance the profound economic shifts associated with NAFTA.

With regard to the solidarity program, it is an innovative program and it is indeed targeting needy populations. However, there is no information to assess to what extent politics has affected its focus on the extreme poor. PRONASOL has been constantly accused of pork- barrel politics in favor of the PRI, sometimes with clear evidence (I personally have seen street walls with the Solidarity and the PRI logos fused). Many wonder if the massive and even tiring publicity campaign corresponds with the real dimensions of the program. Today, one finds the Solidarity logo all over the country, even in places where it does not seem to belong. Furthermore, the program began basically with a “compensatory” view and focused on public works, which has had a limited impact on inequality. Recently the program has adopted a more integral vision, based on the idea that overcoming poverty has a lot to do with providing permanent jobs. Thus, the program has been attempting to link infrastructure as well as health and education to productive projects. This approach however took off only a couple of years ago.

Third, despite the reforms of the legal and financial frameworks, agriculture remains in very bad condition. Wages in this sector plum- meted between 1988 and 1990 (OCDE 1992, 60). In the context of the NAFTA, the future of millions of peasants producing basic grains is worrisome (even if under NAFTA Mexico would have fifteen years to resolve this issue).

Finally, although the communications network has improved significantly since 1988, our phone, road and especially railway systems are deficient.

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Social Policy, Federalism and Administrative Democracy

Contrary to de la Madrid, Salinas has re-centralized revenue flow (making the new Treasury even more powerful) (e.g. in 1989 the value added tax (VAT) was taken away from the states) (Bailey 1992). He has also, for a variety of reasons, asked for the resignation of almost half of the governors. However, it should be mentioned at the same time that the president started an important process of decentralization of basic education. At any rate, it seems clear that in the context of NAFTA several states are likely to demand greater autonomy, especially those with significant economic and administrative capacity, such as Nuevo Leon, Jalisco, Baja California or Chihuahua. Our very old centralist traditions, however, do not facilitate decentralization. There has been already some fights between some states and the federal government over the management of resources and we can expect these conflicts to increase.

PRONASOL faces a dilemma since it has to avoid both the bureau- cratization and incoherence favored by federalism and the rigidities associated with central planning. Given current available information, it is difficult to asses how well the program is addressing this dilemma. Since PRONASOL is administered by a federal secretariat, it has meant a rather centralized social policy, at least in fiscal terms. PRONASOL officers are constantly stressing the fact that many decisions are taken by the communities and that the old paternalistic and distributive policy style has disappeared. Although the PRONASOL committees’ structure could indeed lead to greater participation in some aspects of local policymaking, this has yet to be documented (unfortunately, we cannot expect local authoritarian traditions and a centralism that date back to colonial times to be easily reversed). Furthermore, the matching format of the program has allowed the president to extend the range of the state influence over the local agenda nationwide (Bailey 1992). Despite clientelistic traditions, independent NGOs have been growing in Mexico in recent years. Although they can gain from closer links with the program (in terms of resources and institutionalization), NGOs are also likely to lose part of their autonomy. Hence society’s networks, identity and autonomy could be seriously affected. Finally, through this “War on Poverty” Salinas has been able not only to provide greater legitimacy to his government and the political system, but to open possibilities for a renovation of the PRI. The solidarity committees could some day allow the party to substitute its corporatist structure for one of cadres and citizens.6 In the meantime, it has helped to close the political representation gap.

Political Reform

The political situation is different today from ten years ago, especially because Salinas allowed two PAN governors to win the elections and there are at least two opposition parties with an important presence in


Congress and some states (today, the PAN is an unavoidable political player and governs over 13.5 million Mexicans) (Aguilar Camin 1993, VII). There is now much more electoral competition nationwide. Al- though the PRI remains an internally very disciplined party, today it no longer immediately expels those members who dare voice their own views.

With regard to human rights, while many recommendations of the newly created Commission are not followed, it has served as an important legal ombudsman. Although human rights are still violated in many instances, nowadays such violations are not as widespread as some foreign politicians or journalists believe.

Before mid-1993, many Mexicanists, (see for instance Este Pais April 1993) believed that the Salinas program of political reforms had lagged behind the economic one. The political reform Salinas had promoted basically attempted to increase the credibility of the officially controlled electoral system. In other words, as some authors have said (Loaeza 1992a, 3), these reforms meant a political liberalization not a democratization. In fact, in March the Secretary of the Interior openly said that the government had no intention of surrendering its control over the electoral system (La Jornada 03/1993).

To a great extent, the system’s response to this increasing mobilization had been too ”presidentialist” and pragmatic. It had been the president who personally solved these conflicts. However, he seemed to be only sewing the holes of an increasingly thin blanket. Sometimes calming opposition pressures seemed more important than the strict application of the law. This policy was not very well received neither by the PRI nor by the opposition. Many PRI cardholders did not like it because they did not know what to expect or felt betrayed; the opposition kept saying this policy represented only partial concessions. These concessions in turn reinforced opposition beliefs that power and elections are won not with votes but with pressure on the president, even in those cases where the PRI could have won. As various observers have pointed out (Crespo 1993; Camp 1993; Loaeza 1992, 15,34), these trends would not favor an orderly and legally-based political development.

In short, Salinas’ political moves showed that he lacked a deep or at least well-planned program of political reforms. One possible reason for this is that he did not want to face two extraordinarily difficult challenges at the same time (the political and the economic ones). He may have also expected political discontent to decrease as the economy improved. Elections during 1991 seemed to confirm this view, because the PRI regained some electoral support (it got 61.48% of the vote). However, the significant political mobilization in several states during 1992 and 1993 seems to have taken the president by surprise. Such a mobilization, protests against the political pragmatism, an agreement between PAN and PRD to push for greater democratization and prob-

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ably the unexpected difficulties for the approval of NAFTA in the US led the political elite to pass a second political reform, which once again raised hopes.

It is fair to recognize that, as the PRD presidential candidate Cardenas put it, ”despite its limits, the new electoral law is very restrictive; it conditions the leeway of the government” ( E l Financiero 17-10-93, p. 16). The federal entities now in charge of sanctioning elections are certainly more independent. However, the federal goverment, backed by the PRI and its allies, still seems the strongest player. In addition, it remains to be seen how independent this new electoral system will really be in 1994 and what would happen if for instance the PAN or the PRD wins the presidential election that year. The opposition still has room to question the validity of electoral figures and thus the system may not be able to overcome its credibility deficit in 1994.

According to recent polls, 71% of Mexicans want moderate changes. However, support for more radical changes is high by international standards (16%) (Basanez 1992, 7). In 1987, only 14% of Mexicans believed that a governor has to accept a decision from the center that negatively affects hidher state. Asked if they considered it desirable for other parties to reach power, 47% agreed, 27% disagreed, and 25% did not answer. Moreover, 50% agreed, 20% disagreed, and 30% did not answer when asked if Mexico should move towards a more democratic government, even with some restrictions (Alducin 1991, 207, 212, 216). In the 1990s, only one out of five Mexicans expressed confidence in their government and only 12% respected the political process (Camp 1993, 30, based on World Values Survey 1991). These surveys, together with the recent political discontent and mobilization in states such as Michoacan, Guerrero, San Luis Potosi, Guanajuato, Yucatan, Puebla, etc. clearly show that politically the PRI and the government have for the most part lagged behind society. The real test, however, will come in 1994.

Administrative Reform

Strengthening the Treasury and the Central Bank may be positive moves to avoid a fiscal deficit or hold the external debt. However, it is not clear what the consequences will be for long term thinking and planning (Cordera 1992). It seems that Salinas has not given serious consideration to other important issues, such as the professionalization of civil servants or policy evaluation (Pardo 1991).

Developing a professional and more efficient civil service is with no doubt one of the most important challenges deriving from NAFTA. This is basically a commercial agreement with no important supranational entities. Thus, it is very different from the European case. However, it links two more developed nations with a developing one and we can expect it to push towards significant harmonization in some areas (i.e.,


product standards, subsidies, market and environmental regulations, etc.). The parallel agreements on the environment, labor and safeguards, as well as many other areas NAFTA opens to discussion and possible policy harmonization, demand a highly efficient and professional regulatory apparatus. NAFTA also demands very effective educational training, technology, economic promotion and communication systems as well as an independent and effective court system. Many areas of Mexican public administration are very professional, such as the central bank, the Treasury or the Ministry of Trade and Industrial promotion. However, in most policy sectors Mexico has never had a civil service and the administrative apparatuses are very inefficient. Throughout the years, the court system has been highly influenced by political pressures or economic bribes. Administrative structures are extremely weak in many states and most local communities. Changing this situation won’t be easy. For instance, an attempt at developing a civil service during the mid-1980s failed to a great extent because it was thought to give too much power to unions.

Furthermore, it must be added that democracy is not only related to votes. Actually (and unfortunately), Mexicans do not seem to be very enthusiastic about any political party (56% do not favor any of them) (Basaiiez 1992, 6). In addition, 83% of Mexicans think that ”the government should be more open to the public” (Basaiiez 1992, 5). In 1987, 81% and 78% believed the government is a bad manager and dishonest, respectively (Alducin 1991, 188). Therefore, a more independent Con- gress and Judiciary, more participatory and accountable policymaking structures, as well as more professional civil servants are also seriously needed. However, these issues, especially the latter two, do not seem to be among the priorities of the government or (even more distressing) the opposition parties (including the PRD). These parties often seem to act as a different segment of the political elite, that is, professional politicians basically interested in holding power.

President Salinas has scratched the borders of a more participatory policy style in at least three points: the national ”pacts” and ”agreements,” the solidarity committees, and his policies towards the media. However, with regard to the pacts, the executive clearly has a hold on the initiative while social actors have had little influence. The Solidarity committees do not seem to go beyond the discussion of how funds distributed from the center are used locally. Finally, we should recognize that although some officials have been very sensitive to blunt criticisms (especially in the foreign media) and have tried to rebut them and even make them appear as illegitimate or politicized, such criticisms still go on both inside and outside the country.

CONCLUSION

It seems clear that in Mexico a new group of ”techno-politicians” and their ”social-capitalist” model has won the political and ideological bat-

COUNTRY REPORT 201

tle, at least over the old class of politicians that was so decisive up until the 1970s. We are seeing the ascendance of a new group, younger, well educated, with a clearly defined socio-economic model and with apparently no significant political rivals outside or inside the state. Al- though all Mexican presidents have developed their own views, the new PRI candidate, Luis Donald0 Colosio, falls within this "techno- politician" type. He did graduate studies in the US, was president of the PRI and later Secretary of Social Development (although he is different from all previous four candidates in that he has held electoral positions, comes from a northern state and studied in a Mexican private university). His background and NAFTA assure social and macroeconomic policy continuity if he is elected president.

President Salinas' group has put the country on the move at least with regard to the economy. No doubt, some policies of the new "social- monetarism" have brought important benefits. As I said, macro-economic stability has brought about economic growth, built on a somewhat more solid base. Compared to the record of the 1980s, this is no minor achievement. At the same time, the government seems to ac- knowledge that capitalism is not very good at solving the problems of the poor. Therefore, it is trying to pay greater attention to their problems, though this is also motivated by political reasons.

However, as in previous modernization attempts, we still face the challenge of integrating politically and socially a very heterogeneous nation. In other words, of developing 1) a socio-economic model that reduces the strong social, economic and regional disparities and 2) an electoral system with little room for skepticism. A third, somewhat newer challenge, is to open the country to the world while retaining significant policymaking autonomy in many areas and avoiding Mexi- co's conversion into a big assembly plant. The perspectives for the current modernization attempt remain uncertain in these three aspects. Since the latter challenge is more difficult to assess at this moment, I will end with some comments about the first two.

The current open market model may help to increase productivity and GDP growth but it will not necessarily help to solve the unemployment and inequality problems. To the contrary, it may affect negatively many small businesses and peasants as well as the labor intensive non-export economy and the poorest regions of the country. It remains to be seen if the current policies toward monopolies, small business and the poor will be continued and are sufficient to counter- balance, in productive ways, the often inhumane market forces. We also need to see how much minimum wages rise if, as Salinas has proposed, they are linked to productivity increases and taxes are reduced. In short, it remains to be seen if the "social-capitalist" model can overcome its old dilemma (especially difficult in late capitalism) between inequality and growth. However, built-in pressures have often pushed models like this to be more capitalist, or even monopolist, than social. Growth has always been easier to achieve than a more equitable


distribution of income. If that is the case, the authoritarian aspects of the Mexican political system may remain, or even be strengthened. It is worth noting that because all previous modernization attempts have excluded what Bonfil has called ”deep Mexico” (namely, the Mestizo population), they have ended up failing. One such attempt was vio- lently stopped by the 1910 revolution (Meyer 1992).

Macroeconomic policies may be setting the basis for more stable future growth. With NAFTA, we can expect higher growth rates in 1994 (Reyes Heroles 199313, XII). In short, Salinas successfully turned a somewhat despairing environment into a more optimistic one. However, a still highly speculative investment, a capital intensive export oriented economy (increasingly based on mobile assembly plants), threatened labor intensive small businesses, an induced deceleration of the economy to control inflation, and an economy increasingly informal and based on services are all factors that make it difficult to overcome probably the main problem of development, namely, the lack of productive, “formal” and permanent jobs.

In the area of political reform, the regime remains a complex but still in many ways vertical system. The 1993 political reform brought significant electoral changes, but they are still not enough and it remains to be seen how they will affect real electoral practices. Moreover, they do not address the top-down and executive-dominated policy style.

Although some think that real democratic practices will come once economic growth and stability are assured, it is also possible that the elite will not consider such practices necessary if the system starts walking again on the cane of the ”administrative legitimacy” and retains the support of the US government. If the opposition remains relatively weak and the economy is fueled by NAFTA, the regime may feel it does not need real changes to celebrate its 80th anniversary and break the USSR record for one party in power.

If policymaking and electoral practices do not really change, the country will enter a dangerous and very uncertain path for at least three reasons. First, we have seen that an excessive presidentialism has en- tailed not only a credibility deficit but costly national tragedies. The root of our permanent end-of-presidential-term crisis has been the fail- ure of the presidents (and many civil servants) to recognize that they are human beings, that they cannot solve everything, and that they commit mistakes. In the last year of their terms in office, recent presidents have tended to develop an ego problem and abuse their excessive power. The problem is that the country pays the bill. Moreover, the current Mexican political and policymaking system is not well suited to sustain long-term policies aimed at significantly reducing the nation’s social, economic, and regional disparities.

Second, being simultaneously a player and the most influential ref- eree (to say the least) in the electoral process cannot be sustained normatively and remains a source of instability. As in 1988, the lack of

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credibility in the system may lead to the accumulation of discontent and to another crisis during the 1994 presidential elections (Crespo 1993), especially in light of an increasingly participatory Mexican society (Loaeza 1992a, 12). Furthermore, in a more open and private capitalist model the consumer is more free to choose, the state has fewer resources for pork-barrel politics, and corporatist labor structures may be weaker. Therefore, some authors have argued that this model may push, even if slowly, towards abandoning the regulatory-distributive policy style and the officially controlled electoral system (Camp 1993, 22; Aguilar 1992, 212; Loaeza 1992a, 31; but also see Hamilton and Kim 1993). With NAFTA Mexico will be watched more closely abroad; civic and governmental groups in the United States and Canada may exert more pressure toward democratization.

Third, many Latin American cases (e.g. Argentina and Chile) do not support the thesis that electoral democratization and neo-liberal programs are necessarily contradictory (Malloy 1989, 332). While there is certainly a risk of leftist or statist parties coming into power, in a representative democracy those parties would likely have a hard time implementing inflationary or deficit-based policies.

In short, not only is it possible to conciliate representative democracy, sound economic policies and governability, but postponing the former because of the latter is a dangerous strategy that can end up backfiring7 Furthermore, Mexico is now facing the challenge of working more and more productively. In a nation where distrust was planted at its very birth,8 the political elite should realize that, instead of a stumbling block, democratization is a necessary step to become the productive and integrated nation we need to be to survive in the world of the 21st century.

Reaching a ”representative” (see page 184) and institutionalized system is no easy task. It requires the political imagination and the coop- eration of many actors and is not solely the president’s or even the government’s responsibility. Although Mexicans are not alone on this, they still distrust and have a limited interest in politics (Alducin 1991, 166). Probably still too many Mexicans hold authoritarian or intolerant views (Alducin 1991, 200; Camp 1993, 30). Various business sectors, some spheres of the catholic church, rural strongmen, some labor and PRI leaders as well as various US political and economic actors are likely to oppose significant changes in the electoral and policymaking structures. Moreover, opposition parties have difficulties aggregating demands and interests. As in many nations, citizens are not completely aware of the difficulties governments face when formulating or implementing programs and tend to have rather politicized views of public administration (although in Mexico it is easy to understand why). These and other obstacles, however, must be seen as challenges rather than arguments for eluding a decisive search for a ”representative” democracy.

The Salinas government probably will avoid the end-of-administra-


tion triumphalism or blindness that has been so costly in the past. To date, and to a great extent thanks to PRONASOL, the president managed to introduce a deep economic reform without a political crisis. Although it involves significant administrative and economic challenges, NAFTA significantly improves the prospects for economic growth. PRONASOL will likely bring political support for the PRI in 1994. All these may provide the necessary leeway for a pacific transition to a system in which opposition parties could indeed be allowed to win more local, state and eventually presidential elections. With NAFTA, a financial surplus that allows for increased social and economic promotion spending, macroeconomic stability and Colosio (a candidate clearly backed by the PRI and with considerable electoral experience), the prospects for 1994 look good for the PRI. However, this does not mean that discontent cannot increase, either because social and economic policies do not effectively attack the unemployment and inequality problems or because, facing good economic prospects, the political class does not correctly weigh and react to the present social call for a working representative system. In short, the Mexican transition will keep walking on a fine line. A political crisis cannot be rule out because the PRI resistance to avoid fraudulent practices and surrender power to the opposition is not likely to disappear easily.

Postade

Hundreds of peasants rebelled and fought the army in the southern state of Chiapas in the first days of 1994. Therefore, the above mentioned risks of the Salinas model and the possibility of a political crisis materialized, turning the 1994 conjuncture rather uncertain.

Notes

1. Although any country can exit the agreement with six months notice, that is unlikely to happen in the short run. NAFTA is basically a commercial agreement very different from the European case. However, it is expected to have significant effects on Mexican economic and even political and administrative structures.

2. Actually, Meyer (1991) has argued that because all presidents from 1917 to 1929 were members of the winning revolutionary fraction, in Mexico one political group has managed to control the state since 1917 (that means 76 years, a longer period of one party rule than in the ex-USSR).

3. By 1988 Mexico had 3.5 million civil servants, which meant 44 per 1000 inhabitants (less than Western Germany, France and Great Britain) (Olmedo 1989).

4. The ejido is a piece of land that, soon after the revolution, began to be given to poor peasants to accomplish one of the objectives of the revolutionary movement. Peasants were not allowed to sell the land, with the idea of avoiding their further impoverishment. However this redistributive policy made land tenure insecure and blocked investment flows to the rural areas. In 1988 ejido land was 52% of total Mexican land (OCDE 1992, 179).

5. Offe (1985) has argued that one of the main cleavages of late twentieth-

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century capitalism is not so much between labor and capital, but between the employed, on the one hand, and the unemployed and underemployed, on the other.

6. Since the 1940s, the PRI has been organized in labor, peasant and popular ”sectors.” Salinas has been trying to organize the party along ”territorial” lines. There is now a sort of territorial sector, which helps to gather local support for the party. However, recent changes in the PRI leadership seem to indicate that the sectors, especially the labor one led by the old strongman Fidel Velazquez, have managed to remain as key actors.

7. The uneasiness of the political elite about maintaining the governability of the country seems exaggerated since most political mobilization since 1982 has occurred through legal channels (Harvey 1993).

8. In a 1991 survey, only 34% said s/he trusted others (Meyer 1993, 54).

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Mexico Under Salinas: Towards a New Record for One Party's Domination?

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