Mexico

   

Policy Performance

#39

Economic Policies

#36
With its new president confronting numerous challenges, Mexico falls into the bottom ranks internationally (rank 36) with regard to economic policies. Its score on this measure has declined by 0.3 points relative to 2014.

Despite a general macroeconomic stability in recent years, GDP growth slowed to near zero in 2019. The country has the lowest tax-to-GDP ratio in the OECD, with tax evasion a problem, and a large informal sector. Low oil prices and uncertainty over the relationship with the U.S. have hampered growth.

The new trade agreement (USMCA) with the U.S. and Canada will require major adjustment, particularly in the critical auto sector. Unemployment rates are low at around 3.5%, but average pay is the OECD’s lowest. A reform strengthening workers’ rights and democratizing workers organizations was initiated as a part of the USMCA.

A tax reform is being developed that will aim at reducing tax evasion, and will tax services delivered by digital platforms. The budget was balanced in 2019, but spending decisions are highly opaque. Dealing with financial inflows from illegal drug-related activities remains a major challenge.

Social Policies

#41
Despite ongoing reforms addressing weaknesses, Mexico takes the lowest place in the SGI 2020 (rank 41) in the area of social policies. Its score on this measure has declined by 0.1 point relative to 2014.

Education outcomes are poor despite relatively significant spending. The new president’s reversals of his predecessor’s education reforms retained key elements, while making education from age zero to three mandatory, and guaranteeing access to higher education. Greater funding is needed to support rising student populations.

Income inequality is very high, with poverty among indigenous and rural populations a serious problem. However, poverty rates have declined in recent years. A food-support program addressing extreme poverty has been very effective. Healthcare quality varies widely. Family policy is minimal. Urban areas are supportive of women’s rights, but poorer women have fewer labor-market opportunities.

The pension system is improving, but faces serious sustainability challenges. Integration policy is virtually nonexistent. Drug cartels are responsible for widespread and brutal crimes. The government has created a civilian-controlled national guard to combat cartels and block transit of illegal immigrants. The high number of disappeared and probably murdered women is a serious problem.

Environmental Policies

#33
Despite a growing awareness of environmental issues, Mexico receives a comparatively low overall ranking (rank 33) with respect to environmental policies. Its score in this area has improved by 0.2 points relative to 2014.

A landmark climate-change law went into effect in 2012, but implementation continues to be slow at the federal-state level. An energy reform has made the renewable-energy sector more stable and competitive. However, the country is the second-biggest emitter of greenhouse gases in Latin America.

Serious environmental problems persist, including the provision of clean water, air pollution in Mexico City, and rural deforestation and erosion. Policy strides have been made particularly in air-quality regulation. However, enforcement is lax, and many companies do not comply with regulations. Environmentalists have criticized the new government’s focus on major infrastructure projects.

The country has been praised internationally for proactive innovation, but domestic environmental policymaking has not kept pace. The importance of the oil industry for the economy has created substantial barriers to credible domestic policy activity.

Democracy

#37

Quality of Democracy

#37
Struggling to contain corrosive organized-crime influences, Mexico falls into the bottom ranks internationally (rank 37) with regard to democracy quality. Its score in this area has declined by 0.8 points relative to 2014.

Elections are highly regulated, but crime-group activities undermine electoral integrity. The media is independent of government, but rampant violence against journalists makes reporting on corruption and collusion dangerous. A non-binding referendum, whose results were taken up by the government, resulted in the rejection of a new Mexico City airport.

The security forces frequently violate civil rights, with courts failing to provide adequate protection. A new ombudsman for human rights has been created, but the opposition has questioned the officeholder’s independence. Violent crime is widespread, with journalists and political candidates frequently murdered. Femicide is an increasingly serious problem.

While overt discrimination varies by region, class lines closely track racial divisions. LGBT rights are receiving increasing protection. Corruption is a serious problem in politics, the judiciary and the police. The court system is ineffective particularly at prosecuting powerful individuals. A judicial reform effort is underway, with some critics worried that it will undermine judicial independence.

Governance

#31

Executive Capacity

#27
Despite its strong presidential system, Mexico falls into the lower-middle ranks (rank 27) in the area of executive capacity. Its score has fallen by 0.8 points relative to its 2014 level.

President López Obrador (AMLO) has an extraordinary level of legitimacy and popularity. Strategic planning and key policy proposals have come from the presidential office rather than from external units or line ministries. This office is staffed with appointees that have the capacity to assess line ministry proposals, and is responsible for interministerial coordination.

RIAs are common and of generally high quality, with the agency responsible recently having received a broader mandate. Ex post evaluations are common. AMLO has personally handled most public communication, eliminating contradictions in government communication. Public consultation has shifted away from traditional business and trade union groups toward the broader civil society.

The new government has a highly ambitious reform agenda, with its first steps promising. Monitoring and controlling the state-owned oil company, the police and military have proved challenging. Insufficient funding, corruption and inefficiency inhibit regulation enforcement and the development of national standards. AMLO has focused almost wholly on domestic priorities, refusing to travel abroad.

Executive Accountability

#33
With a number of accountability concerns, Mexico receives relatively low overall rankings (rank 33) with regard to executive accountability. Its score in this area has declined by 0.3 points relative to 2014.

The presidential and electoral systems have systematically weakened parliament and its members. The audit office is independent, but has little ability to effect change. The current ombudsman is loyal to the president’s party, leading critics to question the office’s independence. Data-protection policies are limited in practice, particularly in remote areas, for poor people and where security issues are involved.

Policy knowledge varies by class and education level. Public support for democracy has fallen precipitously, through the new president enjoys strong public support. Increasing violence has produced significant self-censorship among journalists, particularly on security-related issues. The new government relies on social media to get around an oligopolistic media.

The new government has worked more closely with NGO and social movements than with employers’ associations or trade unions. A number of union leaders are facing corruption charges.
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