Mexico’s Post-Election Outlook: The Broader Context

Less than one week away from the federal Congressional elections, Mexico’s Institutional Revolutionary Party (PRI) is poised to obtain a relative a majority in the Lower Chamber, capturing between 183-211 of the 500 seats in Congress. The most likely scenario is one where the PRI ends up with a slight advantage of 24-33 more seats than President Calderon’s National Action Party (PAN), while the leftist Democratic Revolutionary Party (PRD) becomes a marginal player in Congress with less than 15% of the seats. How would such a scenario impact legislation during the rest of President Calderon’s term?

For some time now a number of analysts have suggested that the strengthening of the PRI in Congress would imperil Calderon’s reform agenda or prevent structural reforms from being passed. However, this type of speculation is faulty on a number of grounds.

After its momentous defeat in the 2006 Presidential and Congressional elections, the PRI learned that adopting a negative role in Congress (i.e. blocking the government’s initiatives, publicly confronting the Executive) was a key factor behind its demise. But the party rectified. It might not have reinvented itself, as many of its members demanded, but it has rebuilt its discipline and adopted a hands-on, constructive role in Congress.

In the midst of a growing divide between a liberalizing PAN and a nationalistic PRD, the PRI also emerged as a sober opposition and mediator. It is precisely this new behavior that has positioned the PRI atop of the public opinion polls. Hence, adopting a negative stance in Congress is not really an option for a party that wants to recapture the Presidency in 2012.

Upcoming Dynamics

Even considering an alternative scenario where the PAN ends up with a few more seats than the PRI, the reality is that a relative majority of this kind will not give either party an upper hand as both parties will have the same veto power. On the contrary, given the voting record shown in the last couple of years, the new distribution of seats is likely to reinforce cooperation between the two dominant parties. In any scenario, the PRI has more to gain by becoming a reformer rather than blocking reforms.

It is also likely that as a result of its imminent defeat, the PRD will adopt a much more cooperative stance in Congress, which could greatly facilitate consensus. The party’s increased distance from Lopez Obrador is a clear indication of the party’s leadership seeking a new direction. Yet, the leftist party might have to endure more infighting before becoming a constructive political force.

As a trend, I foresee the parties raising their visibility in Congress in the next three years greatly in part to blunt criticism from what polls suggest is an increasingly cynical public. One of the clearest indications that the PAN and the PRI have decided to increase their stakes in the Lower Chamber is the profile of their candidates. This time the PAN has chosen a breed of more experienced politicians and negotiators-as opposed to younger, unproven candidates. In the case of the PRI, leftist nationalists who appeared in past legislatures are largely absent from the ballot.

Of course, this is not to say that things will be rosy in Congress, or that important reforms will be approved at all. The Mexican Congress has proven to be highly inefficient in light of the enormous economic, security, and social challenges that threaten the country. Similarly, the Executive has been slow in presenting initiatives in the economic arena that would not necessarily have faced political opposition, but would have relieved the impact of the global financial crisis.

Thus, looking forward, the main challenge for the new legislature is not confrontation and vetoing between the dominant parties. Rather, it stems from time constrains imposed by the short duration of the Congressional sessions, along with a faulted legislative system that results in parties and legislators having little incentive to pass politically sensitive reforms.

There will be six Congressional sessions in the next three years. In practice, however, three of these sessions will be largely devoted to the discussion of the federal budget, while the last Congressional session will suffer from the cyclical desertion of legislators seeking other elected posts.

It is possible that the upcoming legislature will begin with an overhaul of the Organic Law of Congress that will extend legislative times and make Congress more efficient. Indeed, this would be a great step forward. Other incremental reforms in the political arena should be expected.

But there remains the question of whether the PAN and the PRI will take upon the challenge of passing difficult, overdue reforms to modernize the country’s outdated economic structure. At this time, neither party has been willing to push for urgent reforms (i.e. a comprehensive labor reform that tackles the country’s hiring and firing rigidities) because they are afraid of a political backlash. Similarly, neither party nor the Executive seems to be willing to do what is necessary to diminish the growing influence of powerful and corrupt state union leaders such as Elba Esther Gordillo, who maintain a tight grip on local and institutional resources and have long avoided any accountability.

In the following months, both the PRI and the PAN will have to assess the cost of not passing politically sensitive reforms versus maintaining a deceitful status quo. Not acting forcefully and soon will not only postpone an already distant economic recovery, but it will also increase the possibility of a full-blown economic crisis towards the end of the Calderon Presidency.