David Shemano wrote:
Mr. Huato -- the following is a recent article in the Los Angeles Times entitled: "The Bite of Corruption: Kickbacks, embezzlement and bribery are a way of life in Mexico, stunting the economy and poisoning the public trust. Some regions are cleaning up, but the capital remains a quagmire." http://www.latimes.com/business/la-fi-mordida6aug06,1,1753381.story
Thanks. I wouldn't give a lot of credence to these comparisons between different locations. By definition, corruption is hard to measure. I'm not saying this only because the comparisons in the article tend to disfavor Mexico City (ran by the left) and give good ratings to Querétaro (a state ran by a philo-fascist). The PRD (the main leftist party) has its own problems with corruption, but -- if what bubbles up in the press is any guide -- it's at a different in order of magnitude compared to the corruption involving the PAN or the PRI. That's my impression. There have been corruption scandals erupting around López Obrador, but they have not been able to show any direct association between him and the people caught. AMLO has argued that these were attempts to set him up. López Obrador may have mishandled these cases, but I doubt he was involved. Luis Mandoki, the filmmaker, has published a video documentary on these scandals, interviewing a lot of serious people, and the conclusion is that there was a plot to frame AMLO. Of course, you can say that Mandoki is partisan, because he's overtly supporting AMLO.
From your perspective, how important is the pervasive corruption among the many problems facing Mexico? And if you think it is an important problem, how would Obrador make any difference?
It's crucial. But the usual definition, misuse of public power for private benefit, encompasses too broad an array of practices. IMO, the worst cases of corruption involve the misuse of the federal government at its highest levels to shape legislation (e.g. taxation) and policies (and their selective execution) in a way convenient to big-money special interests. That's not what you'd gather from the LA Times piece or even from the usual views of standard economists, where the usual focus is on the myriad of small acts of corruption that pervert economic incentives in the usual micro frame of mind. The latter is often used to advocate privatization, liberalization, "de-regulation," and stuff like that, when -- at least in Mexico's case these policies have been the largest sources of corruption. Tel-Mex privatization made Carlos Slim one of the richest men in the world. Bank re-privatization led to FOBAPROA, a scheme used to prop up the banks after they collapsed in 1995 by turning their private debt into public debt, and leading to subsequent juicy deals like Roberto Hernández's sale of Banamex to Citi -- for whose proceeds Mr. Hernández paid no taxes in Mexico. All for the sake of "economic efficiency." To be a bit more specific, his experience as Mexico City mayor convinced AMLO that he could get plenty of funding for his social programs and public investment plans just by enforcing the tax code and closing a few large loopholes. Another big source of money would come from tightening the control over PEMEX. I think he has a very good idea of exactly where the money is sucked out of the fisc. I'm not saying petty corruption doesn't matter, but I think that its effects tend to be exaggerated. One of these days I'm going to write on my blog about the exaggerated importance that conventional economists give to the issue of efficiency. In grad school, students spend over 3/4 of their time and effort in dealing with efficiency, as if it all were a matter of finding clean-cut opportunities for Pareto improvements. Clearly, the real, interesting, contentious issue is equity! Julio
