State-building, the Modernization of the Legal System, and Institutional Effectiveness in Mexico: Notes on the 2013–2014 Energy Reform
Table of Contents
Author(s)
Héctor Fix-Fierro
Institute for Legal Research, Universidad Nacional Autónoma de México (UNAM) | Centro de Investigación y Docencia Económicas (CIDE)To access the full paper, download the PDF on the left-hand sidebar.
Introduction
This compilation comprises a diverse set of papers regarding the primary issues raised by the Mexican energy reform of 2013–2014. Some of the chapters address technical topics; others refer to more general problems related to social, political, economic, and legal issues—such as public safety and the deterioration of the environment—which represent equal challenges to the success of the reform. Nevertheless, all of them allude, explicitly or otherwise, to the capacity of the Mexican state with its authority and its organizations to oversee the complex operation of the energy reform in order to ensure its positive contribution to the country’s economic growth and sustainable development over the coming decades. The challenge that the energy reform poses for Mexico is, above all, a challenge for its institutions—not only for those directly in charge of regulating the energy sector, but also those who maintain the political and legal fabric of the country. The rule of law is necessary to provide certainty to domestic and foreign economic players, as well as guarantee the conditions of sustainability that are required for the country’s development.
Without addressing the topics of the different chapters in more detail, this introduction aims to examine—in light of Mexico’s historical trajectory as an independent nation—the idea of the “challenge to the institutions,” since this may be considered a common and transversal thread that provides meaning and coherence to the set of papers making up this volume. The thesis is that the construction of the Mexican state is still incomplete, and the prospects for its success depend not only upon the decisions currently taking place on the horizon of world society, but also upon the path that process has taken in the past. Therefore, it is essential to pose the question of institutional effectiveness within Mexico’s historical and evolutionary context.
There is ample literature that addresses the capacities and effectiveness of institutions. This is a subject that concerns international financial organizations, such as the World Bank or the International Monetary Fund, when granting loans and assistance to developing countries, since they trust that the beneficiaries will have the capacity both to carry out the agreed-upon projects and to minimize the risk of losing money due to inefficiency and corruption. However, the leaders of these countries—whether or not they have a genuine interest in the successful development of their nations—are also concerned with knowing whether they will have the necessary materials and human resources, as well as institutional capabilities, at their disposal to face the challenges of a world society. These challenges frequently arise unexpectedly from external sources, which can include natural disasters, economic crises, and epidemics. In other cases, the challenges are associated with changes and reforms that governments choose to adopt voluntarily as part of their internal political program, although these also frequently occur during situations of crisis and under strong internal and external pressures.
Mexico’s situation after 1982 is a good example. Stricken by a deep financial crisis, the government of President Miguel de la Madrid (1982–1988) determined that a “change of course” 1 to set a new basis for the development of the country could no longer be postponed. In economic matters, the new course involved the promotion of growth by incorporating the Mexican economy into the global market through exports and private investments that were mainly of foreign origin. One central piece of this strategy was the North American Free Trade Agreement (NAFTA) that was agreed upon by Mexico, the United States, and Canada and went into in effect on January 1, 1994. In political matters, a gradual democratic opening took place, characterized by the increase of pluralism and alternation between the political parties in power at different levels of government. At the intersection of these two processes lay the need to establish a true rule of law based on respect for legality and human rights.
The “change of course” that started in 1982 and the energy reform of 2013–2014 are a part of this process, which has yet to be completed. Indeed, some goals appear to be further out of reach now than at the start. There is a widespread impression that the gap between the challenges in establishing social harmony by means of civil society rules and the institutional capabilities to resolve such challenges is not only permanent, but will actually increase. Why is this? A part of the answer is offered by the concept of “world society,” which has been elaborated upon by authors such as John W. Meyer and Niklas Luhmann using different theoretical perspectives. According to these scholars, it is not nation-states and their relations with each other that build today’s globalized world beyond their borders; rather, it is the structure and institutionalized culture of world society that define the main requirements and the parameters within which national policies operate, independent of whether the state in question has the capacity to carry out such policies.
In the case of the energy reform of 2013–2014, there is no doubt that to a large degree, its success depends on meeting a global standard of managing and regulating the country’s energy resources in order to attract the capital and investments needed for their efficient exploitation. Mexico certainly does not control the global market, which—like the international prices for oil and gas—may change in a capricious manner. However, what does lie within its power is taking measures that will increase the probability of the reform’s success. The country is not facing the same dramatic situation as in 1982, but although many of the changes implemented since then have resulted in conditions that are advantageous compared with those of other nations, its institutions are fragile—due in part to their relative novelty, and also to the growing complexity of the political and legal environment in which they are developing.
This paper is divided into four sections. First, we will briefly address some relevant theoretical ideas on the topics of the state’s institutional capacity and the effectiveness of the legal system. For this purpose, we will employ a schematic reference of the concept of “world society” as explained by John W. Meyer and others, keeping in mind that a global society is a factor in the functioning of the nation-state, and not just an external or contextual space in which a nation-state is embedded.
The second section provides a summary of the main stages of state-building that have occurred since Mexico’s independence. This construction has been linked with what we may call “modernizing cycles” of the legal system. In order to elucidate the context that surrounded the energy reform of 2013–2014, in this section we will offer a description of the most recent of these cycles, which began in 1982. This cycle is characterized by the creation of new institutions and changes to existing ones, as well as by the growth and increasing complexity of the normative apparatus at both the legislative and judicial levels.
The third section proposes a consideration of some institutional challenges that are posed by the energy reform. Specifically, we first examine the role of the executive branch vis-a-vis other institutions and its unique relationship with the regulatory organizations in the energy sector. Second—taking into account both the legal complexity of the energy reform as well as of the judicial apparatus itself—we examine the unique role that the courts will need to play in the resolution of all kinds of difficult issues that arise during the process of implementing the reform.
The fourth section contains some brief final thoughts. There, we conclude that although the formation of the state, of a culture of legality, and of democratic accountability occurs simultaneously and has yet to be completely achieved—which does generate considerable uncertainty regarding future success—there are also signs that the past transformations have been profound and, to a large extent, irreversible. This conclusion leads us to the moderately optimistic assessment that, although there is a steep learning curve, Mexico has most of the institutional pieces in place that are required to overcome this difficulty. In particular, there are undoubtedly signs that the Mexican ruling class responds not only to its own interests but also to the scrutiny and pressures coming from civil, national, and international society. This fact makes it likely that over the long term, the reform will take an efficient and proper course.
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