Introduction
Historical evidence is clear: countries where individuals and organizations (businesses, unions, governments, NGOs, etc.) operate under the umbrella of a robust rule of law have also achieved high levels of economic development.
The Components of a Strong Rule of Law
Key components of a strong rule of law include:
- A democratic political system
- Effective separation of powers
- Transparency and accountability mechanisms for governance
- Low levels of corruption
- Minimal crime rates, including both personal integrity offenses and property-related crimes
Moreover, private property rights must be clearly defined within the legal framework and protected by an independent and impartial judicial system. Economies should operate with low barriers to entry and exit in markets, fostering competition and a market-based economy.
Mexico’s Historical Struggle with Rule of Law
Historically, Mexico has lacked a robust rule of law in both political and economic realms. Politically, the country experienced nearly seven decades of a closed political system with a dominant party and a facade of democracy. Although division of powers existed nominally, both the legislative and judicial branches were subordinate to the executive branch.
Economically, Mexico developed under an institutional arrangement characterized by poorly defined private property rights, a closed economic system with markets operating far from competitive economic arrangements, subject to high barriers of entry and exit in markets, and the prevalence of monopolistic practices under political power. The distribution system of rents was managed by the government.
This situation gradually changed with Mexico’s adherence to GATT in 1986, unilateral opening in 1988, and the implementation of various free trade agreements. Additionally, competition mechanisms were strengthened through the creation of the Economic Competition Commission in 1992 (granted constitutional autonomy in 2013) and the Federal Telecommunications Commission in 1996 (evolved into an autonomous body as the Federal Telecommunications Institute in 2013). The Federal Access to Public Government Information Institute was established in 2002 (gained constitutional autonomy as INAI in 2015) to ensure accountability and combat corruption.
Recent Regressions Under López and Sheinbaum
Despite these positive developments, recent changes under President López and subsequently President Sheinbaum have reversed many of these advancements, moving Mexico towards an authoritarian regime where democracy is merely a facade.
Political Concerns
- Capturing the INE and TEPJF, granting Morena and allies majority through constitutional violation
- Approval of “constitutional supremacy” in Congress, preventing constitutional reform challenges even if they violate individual rights
- Judicial reform that effectively stripped the Federal Judicial Power of its independence, subordinating it to the Executive Branch
- Proposed amparo reform weakening it as a defense mechanism for individuals and businesses against government actions violating individual rights
- Upcoming political reform eliminating plurinominal deputies and senators, potentially returning to a dominant-party system
Economic Concerns
- Consolidation of monopolistic practices in the energy sector through favorable legal and regulatory measures for Pemex and CFE, discriminating against private businesses and violating the T-MEC
- Dissolution of Cofece and IFT, allowing the government to revert to managing monopolistic rent distribution, leaving consumers unprotected
- Dissolution of INAI, enabling the government to conceal corrupt activities
Key Questions and Answers
- Q: What is the rule of law? A: The rule of law refers to a robust legal framework that ensures fair and just governance, protects individual rights, and fosters economic development through competition and accountability.
- Q: Why is a strong rule of law important for economic development? A: A strong rule of law promotes transparency, accountability, and low corruption levels, which are essential for a thriving economy with competitive markets.
- Q: How has Mexico’s rule of law been affected recently? A: Recent political and economic changes under López and Sheinbaum have weakened Mexico’s rule of law, undermining democratic institutions and reversing progress in fostering a competitive market-based economy.
