Mexico: the Role of Informal Institutions

PRESIDENT, CONGRESS, AND BUDGET-MAKING IN ARGENTINA AND MEXICO: THE ROLE OF INFORMAL INSTITUTIONS A Dissertation submitted to the Faculty of the Graduate School of Arts and Sciences of Georgetown University in partial fulfillment of the requirements for the degree of Doctor of Philosophy in Government by Lorena Giselle Buzón Pérez, M.A. Washington, DC May 6, 2013 Copyright 2013 by Lorena Giselle Buzón Pérez All Rights Reserved ii PRESIDENT, CONGRESS, AND BUDGET-MAKING IN ARGENTINA AND MEXICO: THE ROLE OF INFORMAL INSTITUTIONS Lorena Giselle Buzón Pérez, M.A. Dissertation Advisor: John Bailey, PhD ABSTRACT Latin American political systems are characterized by powerful presidential institutions vis à vis legislatures. Presidents hold significant power resources to control the budget process, leaving the congress as a mere rubberstamp. This situation is bolstered not only by formal institutional engineering, but also by informally institutionalized mechanisms at the macro (political system) and micro (budget process) levels. Building on the literature on institutions, executive-legislative relations, and budget-making, this dissertation addresses the following question: How have informal institutions influenced presidential control over the allocation of resources in Argentina and Mexico from 1994 to 2006? My core argument is that when political decision makers resort to informal macro institutions (control over nominations and political careers, and clientelism) and micro institutions (delegation of powers, and the tactical use of economic data and revenue estimates for budgetary projections,) this tends to enhance the power of the president and governors vis à vis the legislature in countries with PR electoral rules and low legislative reelection rates, or where there is no immediate iii reelection. This situation is enhanced under an economically favorable context – economic growth, low inflation rates, and a fiscal surplus – and a majority presidential contingent in Congress with high levels of party discipline. In this study, I draw on extensive interviews and analysis of budget data to trace the processes by which presidents, governors, and legislators exercise power in the budget-making arena. I find that divergence in the influence of informal institutions explains why the Mexican budget-making process has become more evenly balanced between the legislature and the presidency, while Argentina has seen budget-making power increasingly concentrated in the hands of the executive. iv ACKNOWLEDGEMENTS These are the last pages I write in what has been a long and intricate process. As every PhD before me surely knows, and as upcoming graduates will surely affirm, a dissertation can scarcely be completed without the support and help of a sympathetic advisor, a well-functioning committee, collaborative colleagues, a caring partner, and understanding family and friends. My case is no exception, as I had the fortune of having all of these. The complexities and challenges of completing a PhD program, and especially the dissertation process, has made these past years highly demanding, personally and professionally. I am thankful to many people and institutions, and I hope I do not forget any of them in the following paragraphs. First, I thank my wonderful advisor, John Bailey. He was not only a patient, unerring guide in academic matters, but also a great person to talk to about other matters of life. In the course of this research project, the stresses and dilemmas of everyday life could have easily become overwhelming, and so for all the long talks, his patience and guidance, I will be always thankful. Kent Weaver and Sergio Berensztein, my other committee members, were also tremendously helpful throughout the process. Their comments, critiques, and suggestions improved this research tremendously. Several institutions funded me during the PhD program: in Mexico, the National Council of Science and Technology (CONACyT) and the Ministry of Education (SEP), and Georgetown University in the US. Along with those, the Center for Research and Teaching in Economics (CIDE) of Mexico City also provided vital support as I spent over a year there as a research fellow. I especially thank Enrique Cabrero, David v Arellano, and Mauricio Merino from CIDE for this invaluable opportunity. I only hope that one day I can repay the investment that all of those institutions made in my education and academic development. I will be always grateful to my colleagues Gabriela Pérez Yarahuán, Rodrigo Velázquez, Martín Lardone, Luis Felipe Mantilla, and Omar del Valle, who at different stages of my investigation shared with me the vast universe of government budgets and helped me untangle the problems that I faced in the research process. I also received a great deal of support from Sergio Berensztein, Carlos Bandala, Alfredo del Mazo, Martín Lardone, Eusebio Mujal-León, Sylvia Pérez Campuzano, and Laura Sverdlick, particularly as they introduced me to crucial political actors and experts. The interviews I conducted were essential in putting together the story of how the budget process works. To the interviewees themselves, my express gratitude for the time dedicated to me. Jacob Bathanti, my editor, not only helped in crafting the prose and format of this document, but also contributed useful insights about its substance. I thank him for all of his hard work and for making these pages friendlier for the reader. I could not have finished this process (and I would not have started it) without the continuous and loving emotional support of my friends. Enrique Bravo, Maru Campos, Julián Casal, Nicole David, Omar del Valle, Luis Esquivel, Héctor Faya, Gilberto García, Viviana Giacaman, Venustiano Guerra, Luis Felipe Mantilla, Montserrat Munlloch, Gonzalo Nadal, Cynthia Neumann, Aurelio Nuño, Rolando Ochoa, Teresa Orvañanos, Javier Rojas, Alberto Saracho, Valeria Scorza, Alejandra Serrato, and Rodrigo Velázquez, I will be always grateful to you all for your unweary company during these years. vi Tonatiuh González learned how to live with me even as there were days when, instead of a loving partner, he had an anxious and exhausted PhD-dissertation-writer at home. I thank him immensely for his love and for emotionally supporting me during the last months of this dissertation. My Argentine and Mexican families have also been reassuring at all times, and they gave me the hard push I needed in times of doubt and tiredness, especially my aunts Hilda, Mayté, and Tiz, my grandmother, my dad Héctor, and Marlene. To Wa, with all my love, I am grateful for always believing in me, for giving me so many wonderful years of company, and for giving me the strength to start and finish this project, as so many others. To my dad Federico, who was the first person in the world to call me Doctor, notwithstanding that I had been only recently admitted to the program. Wasita and Marisquis, I dedicate this hard work to your life and your memory. Finally, to Sylvia, my mother, all words are insufficient to thank you for opening so many worlds to me: love, life, books, politics, public service; and for inspiring me and imparting to me a strong sense of values at all times of my life, even when those were inconvenient. To you, mamá, I owe everything. To all of those wonderful people who saw me begin the PhD program but could not see me finish it - Wa, Fede, Héctor, Telmo, Billy, and Martín - who at different times in my life gave me the strength I needed to continue and finally get the job done, thank you, and I will always have you in my heart. In the end, as I conclude these acknowledgements, I can only ask myself: What’s next? vii A Sylvia, Federico, y Wa viii TABLE OF CONTENTS CHAPTER 1. INTRODUCTION ....................................................................................... 1 RELEVANCE OF THE RESEARCH ............................................................................. 8 THE ARGUMENT ....................................................................................................... 12 HYPOTHESES ............................................................................................................. 19 MAIN FINDINGS ........................................................................................................ 23 CONCEPTUAL CLARIFICATIONS, METHODOLOGY, AND RESEARCH DESIGN ........................................................................................................................ 26 CHAPTER 2. CONCEPTS, FRAMEWORK, AND CAUSALITY................................. 31 INTRODUCTION ........................................................................................................ 31 EXECUTIVE-LEGISLATIVE RELATIONS AND POLICY-MAKING ................... 33 THE DEPENDENT VARIABLE: CONTROL OVER THE BUDGET ....................... 37 THE EXPLANATORY VARIABLES: FORMAL AND INFORMAL INSTITUTIONS, ACTORS’ POWER RESOURCES, AND CONTEXTUAL FACTORS..................................................................................................................... 47 Formal and Informal Institutions .............................................................................. 47 Clientelism ............................................................................................................ 50 Control over Nomination of Candidates and Political Careers ............................. 50 Delegation of Powers to the Executive ................................................................. 51 Use of Economic Data for Budgetary Projections ...............................................

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