The Missing Reform: Strengthening the Rule of Law in Mexico EDITED BY VIRIDIANA RÍOS AND DUNCAN WOOD The Missing Reform: Strengthening the Rule of Law in Mexico EDITED BY VIRIDIANA RÍOS AND DUNCAN WOOD Producing a book like this is always a team effort and, in addition to the individual chapter authors, we would especially like to thank the Mexico Institute and Wilson Center team who gave so many hours to edit, design, and produce this book. In particular, we would like to mention Angela Robertson, Kathy Butterfield, and Lucy Conger for their dedication as well as their professional skill. Woodrow Wilson International Center for Scholars. One Woodrow Wilson Plaza 1300 Pennsylvania Avenue NW, Washington, DC 20004-3027 www.wilsoncenter.org Woodrow Wilson International Center for Scholars ISBN 978-1-938027-76-5 Table of Contents ACKNOWLEDGEMENTS INTRODUCTION / 1 SECTION 1 / 18 Corruption / 18 The Justice System / 44 Democracy and Rule of Law / 78 Business Community / 102 Public Opinion / 124 Media and the Press / 152 SECTION 2 / 182 Education / 182 Transparency / 188 Competition / 196 Crime Prevention / 202 Civil Society / 208 Congress and Political Parties / 214 Energy / 224 Land Tenure / 232 Anticorruption Legislation / 240 Police Forces / 246 Acknowledgements This book collects the intelligence, commitment, and support of many. It comprises the research, ideas and hopes of one of the most talented pools of Mexican professionals who day-to-day, in different spheres, work to strengthen rule of law in their own country. Collaborating with them has been among the highest honors of my career. I cannot thank them enough for believing in this project. Their genuine enthusiasm and interest in taking part in it was my motivation over the many long nights it took to put it together. I thank all of them for contrib- uting to dissect Mexico’s rule of law issues with a book that distills your personal views, motivations, and vulnerabilities. Thank you for giving me the delightful opportunity to learn and do. Alejandra, thank you for being the David against the many Goliaths. Your work is an endless source of inspiration to me. Alejandro, it was you who taught me what public opinion was when I was 20. Thank you for continuing that work. Alexandra, young and brave people like you make Mexico a better coun- try every day. Thank you for the hope I feel every time I talk to you. Carlos, thank you for the many afternoons in Cambridge, where I under- stood what electoral politics really is. I am grateful for your friendship and support. Daniel, I am confident the future of Mexican journalism is safe if people like you remain vigilant. Animal Político is proof of it. For your daily work, thank you. David (Calderón), your capacity to expose the truths hidden by blinding ideology is admirable. Thank you for turning facts into effective actions. David (Shirk), thank you for teaching me that innovation requires frequent failure. It was with you that, as a young graduate student, I learned that not failing just meant not challenging myself enough. Dwight, your clever and polished ideas are fascinating. Your curiosity is a treasure I celebrate. Eduardo, thank you for patiently and scrupulously building brilliant teams. And thank you for the life lessons I learned that afternoon at that Wash- ington, DC coffee shop. Enrique, thank you for venturing. Success is about taking it, the moment it shows up. Felix, you will always be my professor and mentor. Thank you for advising me to attend graduate school (rather than joining the resistance). Since I took your advice, life has been an amazing journey. Luis (de la Calle), thank you for the complicity and the shoulders to stand on. It has been delightful to work together. Luis (Rubio), thank you for collaborating with serenity and generosity. Your calm is paragon. Manuel, thank you for teaching me to hunt for the untold feedback, culti- vate awareness, and be attentive to the indirect signs. Your friendship is something to cherish. Matt, thank you for writing passionately, orderly and concretely. Your chapter is a lesson of elegance. Thanks also to Duncan Wood, my co-editor. It feels like yesterday that this book was an idea we shared at the Mexico Institute. Thank you for your support, advice, and honest feedback. Thank you also to Andrew Selee, Christopher Wilson, Eric Olson, Angela Robertson, and Andrea Tanco. It is because of you that Washington always feels like home. Very special thanks to Mylene Cano. The professionalism and intelligence of Mylene are a superb weapon. Her support as a research assistant was truly outstanding. Finally, Aaron With, thank you for the song, the many smiles, and the delightful first year that we shared while this project came alive. F The Missing Reform: Strengthening The Rule Of Law In Mexico BY VIRIDIANA RÍOS he approval of the package of widely praised structural reforms has not had the effect that observers and policy makers were ex- Tpecting. It had been estimated that after approval of the reforms Mexico’s economy would grow by 4.9 percent by 2016, about 1.2 per- centage points above the inertial growth projection of 3.7 percent (SHCP 2013). Yet, Mexico grew just above 2 percent in 2016 (Banco de México 2016). The education reform required that all public school teachers be tested to obtain a position, yet in states such as the State of Mexico less than 16 percent of the slots for teachers are subject to testing (Hernán- dez 2016). The Anti-Trust Commission created by the celebrated com- petition reform remains understaffed and poorly funded, with an annual budget of USD$25 million, about 14 percent of the resources allocated to the U.S. Antitrust Division (USDJ 2016, SHCP 2016). Furthermore, 52.4 percent of Mexico’s labor force is still made up of informal sector work- ers, more or less the same proportion as in 2012 (54.8 percent) before the labor reform was implemented (ENOE III-2013, III-2016). The lack of results has been somewhat surprising, given that approval of the structural reforms was taken as an unequivocal sign of fast-moving political and economic development in Mexico. Mexico earned interna- tional acclaim for being capable of achieving, in a couple of years, what other Latin American countries had struggled for decades to do: bring together political parties from across the political spectrum to pass deep THE MISSING REFORM: STRENGTHENING THE RULE OF LAW IN MEXICO 2 structural reforms in several key sectors. The reforms targeted issues such as lack of competition in private enterprise, perverse labor incen- tives inside the education sector, poor energy infrastructure, widespread informality of labor, monopolistic structures in telecommunications, and inadequate transparency regarding spending at the state level (Banco de México 2015). In retrospect, the approval of the reforms proved to be an easy step. Turning structural reforms into reality, moving them from paper to imple- mentation, was where the real work lay. An anti-trust agency was creat- ed as part of the competition reform but the existence of unwritten priv- ileges for some market players have allowed them to ignore its findings and regulations. A labor reform was approved to better incentivize public teachers, but disagreeing on how to measure performance stopped the reform from being implemented in full. The impact of recently approved reforms in energy and telecommunications will remain incomplete as long as insecurity, extortion, and corruption continue to permeate pro- duction processes and competitiveness. This is not the first time in which magnificent reforms on paper have be- come diluted policies. By 2016, Mexico was supposed to have finished implementing a historical transformation of its judicial system, shifting trials from inquisitorial to adversarial procedures. This transformation, approved in 2008, was meant to apply, among other innovations, oral trials, mediation, and mechanisms of alternative justice. As of now, im- plementation is far from a reality since only four out of 32 states were able to fully implement the adversarial judicial system by 2016 (Proyecto Justicia 2016). Implementation of the judicial reform is particularly worrisome as impu- nity, corruption, and other rule of law issues have been systematically identified as the main factors that inhibit the implementation of other structural reforms and also inhibit competitiveness and political and eco- nomic development in general. About 28 percent of the adult population is the victim of a crime every year in Mexico, and 92.8 percent of those crimes are never reported because of lack of trust in the authorities INTRODUCTION 3 (ENVIPE 2016). That is not surprising given that in states like Sinaloa half of the police force fail integrity tests, and nationwide the figure is 10 percent (SENSP 2016). About 12 percent of Mexicans who had contact with authorities were victims of corruption (ENCIG 2015). In fact, Mexico is ranked in the bottom 10 percent of 138 countries in reliability of police services, business costs required for combatting crime and violence, and ethics and corruption in the Global Competitiveness Index. Furthermore, businesspeople consider corruption the most problematic factor for do- ing business in Mexico (WEF 2016). This book explores a new hypothesis as to why the approval of Mexico’s groundbreaking structural reforms has not been able to live up to expec- tations. We argue that the time in which Mexico’s structural lags could be tempered by improving legislation and creating new laws has come to an end. To turn approved structural reforms into tangible benefits for all Mexicans, the country needs to transition to performing a much more complicated task: implement the rule of law. Making sure that rules ap- ply to all and everybody in the same way, independently of income, pow- er, or status, is the most imperative pending task of Mexico.