México: A Case for the Study of Federal Corporatization

Abstract

With the purpose of projecting México towards the field of international federal comparisons, this text originates from the question: Which factors of federal corporatization are found in the Mexican case? It is important to highlight that the 19^th century signified an era of “radical federalism” for México. By contrast, two later phases of federal corporatization have developed, between 1930 and 2000, and after 2018. The stage from 2000 to 2018 was described as a conjunctural federal resurgence, due to the partisan alternation, the growth of decentralized spending and the discussion of specific policies in horizontal forums. With the resurgence of Mexican corporatization, two factors, with different levels of importance, can be confirmed: 1) the hegemonical party, and 2) the constitutional coding of Intergovernmental Relations. However, the 2000-2018 period threw Urban Development to the national-subnational competition. Equally, the collective and individual initiatives of the subnational governments may be understood as federal safeguards.

 

 Introduction

Federal corporatization is the “conscious anomaly” of some dual peripheric systems. It is the domination of the national government over the subnational ones, exercised through controlled decentralization as a system of Intergovernmental Relations (IGR). Three factors explain corporatization. The constitutional order is the general governmental hierarchy that, for any sectorial particularities, designates national legislation as obliged regulation of IGR and as dispute solving statue. In retrospective, the hegemonical party is the revolutionary and centralizing force which extinguishes the background of social inequity and, prospectively, will build a developmental State to impose a program of socioeconomic accelerated change. Urban development is the project that empowers cities and metropolis due to them being forces of political and economic dynamism. The three factors must be schematized to locate tensions and formulate reform alternatives (Powell, 2015, pp. 305-306).

 

Flows of Federal Corporatization

With such considerations, the purpose of this text is to broaden the study of federal corporatization through the Mexican case, by examining three inherent factors: the hierarchical constitutional order, the hegemonic party and urban development; to establish variants of the phenomenon beyond the South African case (the principal case study of Powell’s work referenced above). It seeks to project Mexico into the field of federal comparisons, by virtue of the fact that it is a federation with a long past in the “conscious anomaly”. Besides this introduction and the conclusions, this text is organized into three other sections that correspond to the Mexican development through the same number of centuries.

 

Source: By the author from Powell, 2015, 305-306.

 

The Radical Federalism of the 19th Century

México was formally constituted as a federation on October 4th, 1824. After the first empire (1821) and the proclamation of the Republic (1823), the mentioned date corresponds to the promulgation of the first Federal Constitution. Thus, a dual system was implemented where the residual formula was short of explicitly defining the competences of the subnational units: 1) assumption of the Federal Republic and enunciation of the federated states (articles 4 and 5), 2) general rules for the subnational components (articles 145 to 156), 3) general organization of powers of the federated parts (articles 157 to 161), and 4) prohibitions to the subnational governments (article 162) (CGC, 1824).

The Federal Constitution of 1824 enunciated 19 states and five territories: “the state of the Chiapas, Chihuahua, Coahuila and Tejas, Durango, Guanaxuato, México, Michoacan, Nuevo Leon, Oaxaca, Puebla de Los Ángeles, Queretaro, San Luís Potosí, Sonora and Sinaloa, Tabasco, Tamaulipas Veracruz, Xalisco, Yucatán, and of the Zacatecas; the territory of the High California, the Low California, Colima and Santa Fe of New México. A constitutional law will determine the character of Tlaxcala[1] (CGC, 1824, p. 77). Humboldt (1827, pp. 277-278), while referring to his “Mexican atlas” (“atlas mejicano”) from 1776, noted that the Mexican political division kept the limits of the intendencies of the New Spain.

Throughout national life, the Mexican federated states have reached the number of 32: Sonora and Sinaloa (1830, their separation led to two states); Guerrero (1849, segregated from the State of Mexico), Colima (1856, became a state from a federal territory), Aguascalientes (1857, segregated from the state of Zacatecas), Campeche (1862, segregated from the state of Yucatán) and Tlaxcala (1857, became a state from a federal territory); Hidalgo and Morelos (1869, were segregated from the State of Mexico); Nayarit (1917), Baja California (1952), Baja California Sur (1974) and Quintana Roo (1974, became states from federal territories); as Mexico City (which was erected as a federal entity by the end of the  1988-2016 political process, after being a Federal District since 1824 following segregation from the State of Mexico). It should be also noted that three states segregated from the Mexican Republic to join to the American Union: Texas (1836), and California and Nuevo México (1848).

The federal organization of the Mexican State was interrupted and restored twice during the 19^th century. The Central Republic was established from 1836 to 1847 and the Second Empire between 1864 and 1867. The federal laws that came into force during the same century, the Constitutive and Reform Act of 1847 and the Constitution of 1857, beyond universalizing social rights as individual warranties, did not modify the federal content referred to the first paragraph of the introduction. The 19^th century was characterized by the performance of a “radical federalism”, founded on the strategic and financial unilateralism of the subnational governments and a weak national government (Mendoza y Mendoza, 2022, p. 70).

 

The 20th Century Corporatization

For the 20^th century, the Constitution of 1917 perpetuated in its content the tendency of the precedent law: accentuate civil rights without complementing the federal organization of 1824. The Constitution of 1917 was a turning point by propitiating: a) a national political project which subjugated subnational agendas, b) the financial unilateralism of the national government, and c) the opportunistic constitutional reform in the face of national encroachment. In the thirties, party loyalty urged the federal pro-government deputies, after abdicating their legislative function in favour of the National Executive, to benefit the ever-growing militancy with handouts (Weingast, 2005, p. 129). The President of the Republic became omnipotent and his political party, the Institutional Revolutionary (PRI) became the main mechanism for interest negotiation in the political system (Carrera, 2004, p. 5).

In financial matters, the tax-collecting harmonization was considered feasible only via centralization of the function. On December 28, 1953, the Fiscal Coordination Law between the Federation and the States was enacted. That was the base of a long-winded process: the subnational governments were to transfer their taxation faculties to the national government for it to collect the main taxes and share the income with them. The instruments to concretise these were agreements of adhesion to the National System of Fiscal Coordination, incentivized by growing income schemes (Díaz-Cayeros, 1995, pp. 81-82).

In the seventies, public problems diversified, and the solutions demanded intersectoral and intergovernmental coordination. Then, under central criteria and parallel to the participation, a system of national contributions for diversified local investment emerged. In 1997, the reform of the Fiscal Coordination Act instituted national contributions as a right of the subnational entities, now operated through distribution formulas, distanced from discretional decisions. The need to strengthen national tax-raising propitiated its controlled decentralization. The Fiscal Coordination Act (1978) included the concept of “administrative coordination” for subnational governments to convene the raising of some nationalized taxes.

Derived from the constitutional reform, the coding of IGR instituted two asymmetrical categories of intergovernmental categories. Ten sectoral or special schemes demonstrate strategic coordination with minoritarian participation of subnational officials. These are collegiate bodies focused on national policies, in which the participation of subnational representatives is added to other minorities, such as the national sector, local governments, technical specialists and legislative representation. On their part, a minority of five intergovernmental systems includes subnational representatives under the direction of national officials. In this way, the national regulation of IGR ensures central control through two general formulas of intergovernmental assemblies. The majority prescribes minorities of subnational representatives in practically nationalized sectors. The minority is based solely on control of the presidency.

 

The Relative Federal Resurgence of the 21st Century

The arrival of the National Action Party (PAN) to the Presidency of the Republic, in the year 2000, freed the Mexican political system from central control and dynamized party competition. In said context, the National Governors’ Conference (CONAGO) emerged in 2002, its origin was the opposition struggle of subnational governments after feeling affected by cuts to federal transfers. The achievements of CONAGO are a) the management of new decentralized financial items, as federal reassigned expenditure and distribution of oil surplus; b) the consensus over a new agenda of vertical, and some horizontal, public policies; and c) an agenda to deal with the pandemic of COVID 19 (Mendoza, 2021). The two presidents from PAN (2000-2012) consented to the gradual increase of national transfers until reaching five modalities: 1) participations, 2) contributions, 3) sectoral decentralized expenditure, 4) reassigned federal expenditure, and 5) redistribution of the oil surpluses.

Beyond coordinated spending, in this new stage some subnational governments stood-out due to their strategic capacities. Regarding regional development, logistic platforms for burden shifting had a recent upswing, some were successfully implemented like Guanajuato In-land Harbour and the Tepeji del Rio Railway Port in the state of Hidalgo (Mendoza, 2010, pp. 135-138; Mendoza, 2013, pp. 89-98). Regarding social policy, the government of the State of Jalisco had deployed several compensatory program initiatives potentiated by important efforts of geographical focalization (Mendoza, 2022, p. 39).

On the matter of administrative collaboration, the performance of the Aguascalientes Secretary of Finance was outstanding for achieving deconcentration of fiscal responsibilities via intergovernmental bargaining. It also counted with plans of vertical and horizontal coordination, and business representation had the capacity of coordinating tax-raising activities with the state (Mendoza, 2022, p. 32).

Despite the collective and particular advancements of subnational governments, the constitutional and reglementary frame of IGR has not changed since the 1980s. With the victory of MORENA over the presidency (2018), decentralized sectoral spending was reduced to a minimum and reassigned federal spending was completely annulated, reducing federal transfers to participations and contributions. An overpowering national Project called the Fourth Transformation intends to unify political activity of the new political party and constitutional reform. Members of the legislative branch persist as electoral agents and the President of the Republic, since 2012, has won the faculty of preferent initiative. These inertias question the extinction of Mexican corporatization together with the hegemony of the PRI. It can even be considered as an inherent Mexican characteristic, now as “new corporatization”.

 

Conclusion

Mexican federal corporatization shares, with different intensities and in two separate stages, 1930-2000 and since 2018, two out of the three inherent factors. The hegemonical party has always been the most important factor. Since 2018 an alternative formula with similar strategies came to being: an overpowering national project and the adhesion of majority groups as political patronages. The coding of IGR is a temporarily constant shared due to its late implementation in the previous corporative stage, relative stability during transition, and the current stage. There’s only pressure from the opposition minority to reform the system of federal transfers which affects the projection of subnational governments’ political merit.

Derived from the transitional lapse between the two corporative stages, 2000-2018, urban development is a questionable element in Mexican corporatization due to its projection on to the national-subnational competition. This discrepancy is complemented by CONAGO’s collective initiatives and by individual strategic capacities: regional development, social programs, and administrative collaboration, both as federal safeguards.

[1] Original translation from “el estado de las Chiapas, el de Chihuahua, el de Coahuila y Texas, el de Durango, el de Guanaxuato, el de México, el de Michoacán, el de Nuevo León, el de Oaxaca, el de Puebla de los Angeles, el de Querétaro, el de San Luis Potosí, el de Sonora y Sinaloa, el de Tabasco, el de las Tamaulipas, el de Veracruz, el de Xalisco, el de Yucatán y el de los Zacatecas; el territorio de la alta California, el de la baja California, el de Colima, y el de Santa Fé de Nuevo México. Una ley constitucional fijará el carácter de Tlaxcala”

 

References

Carrera, A. P. (2004). Evolución de las relaciones intergubernamentales en México: la búsqueda de un nuevo arreglo institucional ante una nueva geografía del poder político (1980-2000). CLAD.

Congreso General Constituyente (CGC, 1824). Constitución de 1824. Cámara de Diputados.

Díaz-Cayeros, A. (1995). Desarrollo económico e inequidad regional: hacia un nuevo pacto federal en México. Miguel Ángel Porrúa.

Humboldt, A. (1829). Ensayo político sobre la Nueva España. Casa de Jules Renouard.

Mendoza, J. (2010). El principio de subsidiariedad en la evaluación del federalismo mexicano. IAPEM.

Mendoza, J. (2013). Las capacidades subsidiarias del gobierno estatal y de los ayuntamientos del Estado de Hidalgo en el contexto federal: finanzas públicas, políticas públicas, organización social. INAP.

Mendoza, J. (2021). La Conferencia Nacional de Gobernadores de México: su aportación como salvaguarda federal [forthcoming]. CU UAEM Zumpango.

Mendoza, J. (2022). El principio de subsidiariedad: ayer, hoy y mañana. En Revista Iberoamericana de Relaciones Intergubernamentales, 2, 1-45.

Mendoza, J. & Mendoza J. (2022). Las etapas constitucionales mexicanas a través de sus etapas constitucionales. In M. P. Patiño, M. Olalde & G. Cruz (Ed.), 200 años del pacto federal: significado, actualidad y perspectivas (pp. 65-79). Instituto Belisario Domínguez.

Powell, D. (2015). Constructing and developmental state in South Africa: the corporatization of intergovernmental relations. In J. Poirier, C. Saunders & J. Kincaid (Ed.), Intergovernmental relations in federal systems, comparative structures and dynamics (pp. 305-349). Oxford University Press.

Weingast, B. R. (2005). The Performance and stability of federalism: an institutional perspective. In C. Menard & M. M. Shirley (Ed.), Handbook of new institutional economics (pp. 149-172). Springer

 

Further Reading

Poirier, J. y Saunders, C. (2015). Conclusion: comparative experiences of intergovernmental relations in federal systems. En J. Poirier, C. Saunders, J. Kincaid (Ed.), Intergovernmental relations in federal systems, comparative structures and dynamics (pp. 440-511). Oxford University Press.

Powell, D.; Ntliziywana, P. (2015). ‘South Africa Inc.’: The rise of the developmental state and the corporatization of intergovernmental relations. En F. Palermo, E. Alber. Federalism and decision making (pp. 292-314). Brill Nijhoff.

Schnabel, J. (2020). Managing interdependencies in federal systems. Intergovernmental councils and the making of public policy. Palgrave Macmillan.