The Political Impact of NAFTA on the Mexican Transition to Democracy, 1988-2000

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The Political Impact of NAFTA on the Mexican Transition to Democracy, 1988-2000 - Mara Steffan


By focusing on NAFTA as an intervening variable in the Mexican transition to democracy, this paper explores the interplay and the sequencing of economic liberalization and political opening that occurred in Mexico between 1988 and 2000. More precisely, its goal is to evaluate whether neo-liberalism in Mexico has steered a process of democratic transition or, conversely, if the consolidated features of the political system have remained practically unchanged despite the speed of the impressive market reforms that Mexico has experienced. As the analysis will highlight, the Salinas administration (1988-1994) adapted the ruling coalition and state-society relations to the imperatives of neo-liberalism, thus making the free-trade agreement politically viable. The result was political paralysis rather than a positive political opening. By contrast, economic liberalism under Zedillo (1994-2000) triggered an ongoing process of political liberalization, mainly by reducing the power of the presidency and by partially removing the past authoritarian legacies of Mexico. However, this paper argues that Mexico still falls short of a full-fledged democracy. The path toward democratization, although well on its way, remains uncertain and complex given the current reality of the country.


Since the early 1980s, Latin American countries have been undergoing an unprecedented economic restructuring that has eroded the traditional model of import-substitution industrialization (ISI) and paved the way for crucial political changes in the region, leading to a dual transition. On the one hand, the imperatives of market reforms have replaced the state-centred pattern of economic development, while, on the other hand, democratic rules and political opening have become perfect substitutes for authoritarianism, thus emerging as the only game in town.

This dual transition toward economic liberalization and political democratization is a challenging subject of comparative political-economic enquiry, for the interaction between domestic context and international constraints affects the timing of these developments. According to the modernization theory of development, for instance, extensive market reforms under authoritarian rule may gradually promote a chain of deep social changes that are likely to increase the demand for democratic accountability and political representation. Economic liberalization would thus trigger democracy. Democratization before economic opening, on the other hand, may significantly delay or limit the pace of market reform, because democratic governments may lack the ability to implement necessary but unpopular economic reforms. Over time, the failure to cope with pressing economic problems may undermine their ability to govern. In this case, an authoritarian leadership would better meet the challenge of economic liberalization by repressing popular discontent, while preserving social order and strengthening the position of key social groups in order to ensure support for market reforms.

Assessing the sequencing of political opening and economic liberalization is a very compelling issue, given the history of Mexico. Since the mid-1980s, in the wake of the debt crisis that afflicted most Latin American economies, the country embarked on a tough program of structural economic stabilization, together with an impressive movement toward economic opening and the adoption of market-friendly policies, following the Washington Consensus. On 1 January 1994, the North American Free Trade Agreement (NAFTA) signed by Mexico, the United States and Canada marked the highest point of this process and the second wave of market reforms in Mexico.

The relationship between Mexico and NAFTA has fueled hotly contested debates over the true economic dimension of the agreement, and the evaluation of possible benefits or unfavorable consequences for the Mexican economy is still a topic of research. However, this paper aims to analyze the political aspects of the issue by discussing the impact of neo- liberalism on the Mexican political system. Given that Mexico launched its liberalization strategy in the mid-1980s, before NAFTA was even on the negotiating table, the analysis here focuses on NAFTA as an intervening variable that interacts with long-term defining features of Mexican politics. By comparing the political response of the Salinas (1988- 1994) and the Zedillo (1994-2000) administrations, this study investigates how the ongoing process of economic liberalization has influenced both the governing coalition and the state-society relationship. Specifically, the purpose of this paper is to evaluate whether economic liberalization in Mexico has gone hand-in-hand with political opening, thus triggering a process of democratic transition, or if, conversely, the consolidated features of the political system have remained basically unchanged. While admitting that certain political changes may not be considered as the sole product of neo-liberal reforms, the Mexican case is rather an example of how economic determinants do affect political outcomes, given the incredible breadth and speed of market reforms in this country.

The Salinas Presidency: Economic Restructuring, Presidentialism and Coalition Change

The 1988 election represented a political debacle for the Partido Revolucionario Institutional (PRI) and the new president, Carlos Salinas. The traditional ruling party in Mexico, the PRI, lost its two-thirds majority in the Chamber of Deputies, while Salinas received only slightly more than 50 percent of the votes.[1] As a consequence, Salinas had to implement a political strategy to restore both the power of the presidency and the popular support for his party, without provoking far-reaching changes to the system as a whole. Economic restructuring was still a priority; thus, Salinas also had to manipulate the political system to accommodate the neo-liberal agenda and generate support in civil society for economic liberalization.

Salinas was able to manage Mexico’s so-called tacit consensus on the deepening of economic liberalization by maintaining the central political structure sufficiently intact to guide the entire process from above.[2] Once in office, he realized that the country’s one-party authoritarian system was not entirely adequate for this task. Some skillful adjustments had to be implemented in order to make market reforms politically viable.

Overall, the traditionally defining features of the Mexican political system— presidentialism, one-party dominance, corporatism and clientelism—continued to be the backbone of Salinas’s new political stance. Yet if economic liberalization was to succeed, these characteristics would have to be redefined and modified. Upon taking office, Salinas faced the immediate challenge of creating and consolidating new bases of political and social support for market reforms and for his government.[3]

The Salinas administration responded to these changing political realities in three principal ways. First, Salinas sought to recalibrate the ruling coalition in support of the issue of a free-trade economy and his neo-liberal program. Second, along the same lines, he tailored the party system so as simultaneously to strengthen the PRI and weaken the opposition parties. Finally, Salinas sought to regain the public’s confidence in the neo-liberal restructuring program by implementing new forms of clientelist ties with such specially-targeted social groups as the marginalized and the poor.

Changes in the Ruling Coalition: the “Neoliberal Duopoly” of State and Business

To begin with, the most significant political change took place in the ruling coalition. How was it possible that the political party that had fostered a model of import substitution economic development since the 1930s suddenly shifted to a market-oriented political economy of international integration in the 1980s? How was the process of trade reform that began during the 1980s and that culminated in the 1994 signing of a preferential trade agreement with the United States and Canada made possible politically?

In most countries, the adoption of neo-liberalism was associated with the rise of a particular political party. By contrast, in Mexico this shift took place inside the PRI itself. The popular discontent with the government’s post-1982 austerity and economic restructuring policies produced unprecedented support for opposition parties in 1998 and caused the PRI’s electoral setback. The popular sectors that traditionally constituted the PRI’s base of mass support—unionized urban and industrial workers, public employees and portions of the urban middle class—were also those who suffered most from the privatization of state-owed enterprises and cuts in government subsidies that occurred during the de la Madrid administration.[4]

Therefore, Salinas could no longer count on organized workers and peasants to support the party and his economic reforms.[5] Rather, he had to look to the private sector. A “fundamental overhaul of the PRI’s political base” took place, since the PRI replaced its previous alliance with import-competing, state-dependent firms and shifted toward an explicit and largely exclusive alliance with big-business elites.[6] By shifting the distribution of power within the coalition toward those economic elites that shared a commitment to market economy and, in addition, by incorporating strategic groups into the state apparatus, Salinas was able to create his ad hoc “neoliberal coalition,” which would be crucial to Mexico’s negotiation on NAFTA with the United States and Canada.[7]

The most important change in the coalition involved the admission of the private sector as a privileged member, although neo-liberalism and NAFTA were state-led initiatives. Yet the private sector became an important ally for Salinas, who relied strongly on his technocratic corps and representatives of the country’s largest companies to foster deep economic opening and restructuring.[8] Thus, under Salinas, the new state-business strategic alliance filled the vacuum left by the dismantling of the Mexican traditional corporatist economic structure, while leading the country toward entry into NAFTA.[9]

Although the Salinas administration made some efforts to fight “labor union gangsterism” and corruption,[10] the position of Mexico’s labor sector was relatively weakened and marginalized. In many industries and regions, authoritarian control of unionized workers continued, as did the corruption of union bosses. In addition, Salinas allowed independent labor movements to exist outside the official ruling coalition, although skeptical voices against the government’s free-trade and NAFTA agenda went unheeded. Neither corporatist nor independent labor was able, or willing, to make any significant impact on the government’s trade policy in 1991 and 1992.[11] The restructuring of the coalition reduced labor’s political influence in the political realm.

Political Parties: the PRI’s Undisputed Hegemony

While the new alignment of the ruling coalition was consolidating its partnership, Salinas realized that he also needed to tailor the political system in order to ensure support for his NAFTA agenda. Thus, the same shift in power and loyalties that took place within the coalition reached the major political parties.

Initially, a partial realignment of forces took place within parties of the center and the left. Following the 1988 election, Salinas and the PRI were charged with electoral fraud and corruption. The president had to seek both to preserve power and to increase the competitiveness and legitimacy of the party and electoral system.[12] First, the Salinas administration attempted to open up party decision-making procedures and to improve the quality of PRI candidates.[13] Second, in 1991 the PRI reformers managed to reorganize the party’s sectoral alignment by merging the labor and peasant sectors and thus adopting a “territorial structure for an envisioned party of citizens.”[14] Moreover, Salinas implemented significant electoral reforms in 1990, 1993 and 1994, all aiming at regulating inter-party competition, increasing opposition party representation in the Congress and holding fair elections that avoided fraud.[15]

Despite these structural adjustments, the PRI managed to maintain its unchallenged position vis-à-vis the main opposition parties, namely the Partido de Acción Nacional (PAN) and the Partido de la Revolución Democratica (PRD). Salinas forged a de facto alliance with the PAN, since he was able to espouse the economic free-trade philosophy of his main adversary on the right. As a result, some sectors of the business community, usually supporters of the PAN, actually gravitated toward the PRI. Moreover, this alliance allowed Salinas to split the opposition and create a congressional majority in support of key legislative initiatives, not least those related to the NAFTA issue.[16] The PRI organization along territorial lines allowed the party to reduce the collective leverage of leftist movements inside the PRI itself, thus making them easier to control.[17] Both these changes were instrumental in the redistribution of power within the coalition.

Electoral reforms fell short of establishing a competitive and democratic political environment. For example, they did not seem likely to eliminate the PRI’s great advantage in campaign financing, nor to allow an independent audit of the national vote.[18] Thus, the PRI resorted to electoral reforms as a way of securing personal advantage for itself. The government’s legitimacy continued to be undermined by low electoral system credibility[19] among the general public and by a lack of consensus on electoral outcomes among parties.

Under Salinas, the PRI was thus able to maintain its prominent position within the system and to mobilize support for the government, which, after 1988, translated into support for the ongoing neo-liberal agenda. The PRI grew stronger while the other parties became incapable of altering the NAFTA campaign in any meaningful way. As Poitras and Robinson stress, the PRI acted as the personification of an “authoritarian rule making itself compatible with economic liberalization.”[20]

Gaining Popular Support from the Poor: the PRONASOL

Restructuring the PRI’s coalition proved instrumental in extracting significant support from the private sector and concessions from labor. Yet the greatest task for Salinas was gaining electoral support from the distressed popular classes, those most hurt by the harsh austerity measures of the 1980s. Only by restoring the public’s confidence could Salinas ensure the political viability of the NAFTA agenda.

The president’s political move was to increase public spending as a way of gaining popular support. In other words, he implemented the Programa Nacional de Solidaridad (PRONASOL) and selectively channeled large state funds to infrastructure, schools and basic services. Also, Salinas attempted to maintain the party’s traditional working- and middle-class support, selectively channeling state funds to the poor via its National Solidarity Program.[21]

As the literature on PRONASOL agrees, this was a “politically astute” presidential program,[22] mainly because funds were spent with the objective of ensuring PRI electoral strength, and it actually worked in this regard. The government often channeled the funds to areas where voters supported the PRD in 1988, thus trying to undermine the opposition’s electoral base.[23] Moreover, resources often went to those organizations that refrained from open opposition to the PRI or the government. Finally, PRONASOL provided funds for community, rather than national, development projects, thus preventing the formation of political alliances advancing demands at a national level.[24]

In rural areas, PRONASOL proved a powerful electoral vehicle, “getting people out to vote for the PRI.”[25] Most observers in fact agree that the program played an important role in the PRI’s improved performance in the 1991 midterm election and became a key factor in the PRI’s 1994 electoral success.[26] With reference to electoral issues, Cornelius shows how PRONASOL facilitated PRI’s management of an increasingly complex society. These highly visible social programs,[27] together with economic improvement, permitted the PRI to substitute “performance legitimacy” for “political legitimacy.”

PRONASOL was by far Salinas’s most successful attempt to transform state-society relations in Mexico. Given the widespread support for the program among popular masses, PRONASOL increased the PRI’s visibility and weakened, or co-opted, its political opposition. Salinas fostered the development of a new “clientelistic incorporation”[28] of social actors into the political discourse, while seriously weakening key political institutions and increasing presidentialism. Within the ruling coalition, the program managed to avoid overt opposition from labor- and peasant-sector populist leaders, for PRONASOL was likely considered a reasonable compensation scheme to counterbalance negative effects triggered by economic liberalization. Generally, as Wise argues, “for the mass of losers…PRONASOL became the PRI’s main palliative.”[29]

Economic Liberalization and Adaptive Authoritarianism

The two-level analysis of the changes in the ruling coalition composition and in state-society relations provided above suggests how Salinas was able to deal with economic reforms without changing the defining features of Mexican authoritarianism. As Poitras and Robinson suggest, authoritarian rule in Mexico proved to be “adaptive in the face of liberal economic imperatives.”[30] All political adjustments worked to lower the perceived political and economic costs of neoliberalism, which, in turn, helps explain why the domestic debate over NAFTA in Mexico was “basically a nonstarter.”[31]

Salinas sought Mexican political acquiescence to NAFTA by implementing a defensive model of institutional exclusion, asymmetric information and linkage between liberalization and macroeconomic stabilization that made neo-liberalism politically viable.[32] First, the institutional transformation and the narrow and exclusionary state-business alliance helped to cement the NAFTA agenda. Discussion on the potential effect of neo-liberalism was voluntarily limited in Mexico, a silence that constituted the second pillar of Salinas’s strategy.[33] As Mexico’s signing of NAFTA was approaching, potential losers started complaining about the dangerous impact of free trade, particularly on workers and small industries.[34] But the louder the weaker sectors of labor and business complained, the more the government publicized its plans to provide credit and other economic compensative benefits, while convincing “liberalization’s losers” that their losses were temporary.[35] The third pillar of Salinas’s defensive model was, in fact, his ability to oversell NAFTA by convincing the public of the necessity of the reforms, though these were severe. Microeconomic concerns about sectoral welfare losses were sacrificed in the name of the macroeconomic stability of the economy as a whole.[36]

Neo-liberal reforms under Salinas were accompanied by formal shifts and changes in the country’s political system. This analysis seems to suggest that the speed and the extent of economic liberalization exceeded the scope of political opening. Along the same line of Panizza’s reasoning, in Latin America the “old politics” of corporatism, clientelism and populism perpetuated in a context of the “new economics” of free trade.[37] Salinas’s Mexico was not an exception to the general rule, since neo-liberalism did not involve a fundamental change in doing politics. The reorganization of the ruling coalition around the NAFTA issue and an hegemonic presidency replaced corporatist and populist policies with neo-populist and neo-corporatist ones. Moreover, with the redefinition of the state-society relationship, new patterns of clientelism developed.[38] Mexico was locked in a sort of “political paralysis,”[39] since market reforms under Salinas were instrumental to the survival of “old politics.”

In conclusion, using a comparison with the Soviet Union, by the early 1990s most authors claimed that Mexico was undergoing “Perestroika without Glasnost”—that is, economic liberalization first, political liberalization later.[40]

The Zedillo Presidency: What Kind of Political Change?

Notwithstanding Salinas’s efforts to tailor the political system to neo-liberalism, the clientelist and corporatist arrangements of the administration proved insufficient to deal with Mexico’s problems. As demonstrated in the previous analysis, the political origins of Mexico’s economic opening were actually undemocratic, and Salinas was never able to institutionalize a broad coalition in order to tackle economic and social difficulties.[41]

1994 was defined as “Mexico’s annus horribilis.”[42] On 1 January 1994, the date NAFTA came into effect, the Zapatista guerrilla uprising broke out in Chiapas; the assassinations of the PRI’s presidential candidate and the PRI’s secretary, together with kidnappings and rural violence across the country, followed in March and September; last, but not least, the government mismanaged the economic crisis, which led to the massive devaluation of the peso, which led in turn to the collapse of most banks. By the end of the year, the ruling coalition had lost its ability to iron out social conflicts and to gain complete acquiescence for its economic policy. Important sectors of the Mexican public lost faith in neo-liberalism and, not surprisingly, political opposition mounted and the PRI’s political prominence deteriorated.[43] In addition, the government’s failure to develop a coherent policy to rescue the banking system had extraordinary implications in the political realm.

In the 1997 midterm election, the PRI lost control of the Congress for the first time in seventy years largely because of the economic crisis and the poor attempt to rescue the banks.[44] This electoral setback marked the final demise of the country’s unique political system.

While during the Salinas presidency the NAFTA issue favored the maintenance of the political status quo, Mexican politics in the post-NAFTA era seemed to have coped with neo-liberal transformation, thus triggering a process of political opening and democratic transition. The loss of the PRI majority changed the political dynamics by diminishing presidential power and redefining the role of political actors while allowing for new participants to enter the political scene. However, even though this important adjustment of political power coincided with a change in the nature of the Mexican presidency, as well as in the structure of the political system as a whole, its effects were not felt within the ruling party.

Zedillo’s Political Reforms: a Democratic, but Uncertain, Political Opening

In his inaugural address, Zedillo stated that his agenda would concentrate mainly on political issues, not economic ones: if Salinas had promoted Perestroika, the new president would advance Glasnost.[45] But Zedillo was soon forced to shift his attention toward the economy and to restore stability as well as the accountability of the PRI’s economic policies. Mexico’s economic situation and the danger to the country’s international credibility could no longer be ignored. Far from being able to implement an active economic reform agenda, the administration had to cope not only with the collapse of the exchange rate and accompanying capital flight and loss of foreign reserves, but also with the consequences of a privatization of the financial system that was both poorly conceived and poorly implemented.

Economic reforms brought about change in the political environment, even though politicians were not fully aware of the political implications of the economic structural adjustments demanded by the international lending institutions.[46] Zedillo did foster an ongoing process of political opening in Mexico, but this push toward political liberalism did not come about intentionally. Rather, it was the result of economic imperatives and of the political prescriptions entailed by free trade and economic liberalization.

NAFTA played a major role in this process. The very fact that the government accepted restrictions on its behavior and allowed Mexico to be subject to the continuous scrutiny of the international community meant that the country could now enjoy new political freedoms. Fearing international repercussions, the Mexican government could no longer afford to repress a political movement, as Salinas did in early 1994 with the Zapatistas, nor keep political participation an exclusive and exclusionary game, run unfair and predictable elections or offer loyalty and accountability in exchange for benefits.

In fact, Zedillo deeply transformed the structure of the political system and redefined the presidency and the role of political actors. Among the most significant political developments in post-NAFTA politics has been the decline of presidential authority. The president renounced the extra-constitutional powers and prerogatives that had long given his office enormous power. Indeed, Zedillo abandoned the PRI’s practice of hand-picking the presidential successor (dedazo), thus forcing all other institutions and political actors into a more participative political role.[47] Thus, by reducing presidential power, Zedillo inaugurated a new presidential style and created a broader space for the development of competitive politics.

Moreover, Zedillo distanced himself from the PRI and stressed the importance of holding free and fair elections.[48] As a result, electoral competition grew, and the PRI’s victories were no longer the norm. In particular, the PRI lost its hegemony in local elections, where the PAN was able to appropriate the PRI’s rural votes.[49]

In sum, the decision to open Mexico’s economy and to seek a close association with the United States constrained the authoritarian regime’s manoeuvrability in the second half of the 1990s, making political fraud and repression much more costly and, therefore, less likely. Economic liberalization was thus instrumental in promoting a new political attitude in Mexico, one in which, as reforms extended, the structure of power—and of the president in particular—was reshaped.

However, there is a darker side to Mexico’s openness to the world economy that is worth considering. Each limit on government action is, by its nature, a concession of national sovereignty. This fact might impose increasing constraints on the range of the government’s political viable options. It thus follows that public trust in the Mexican government and its politicians might decrease as reforms unfold, exacerbating popular local resistance and, in turn, repressive authoritarian rule at a sub-national level.

The presidency’s retreat was also a result of the gradual decentralization of power and resources to the regions, which increased the power and independence of several states.[50] Yet this “regionalization of politics,” due partly to the neo-liberalist imperative of deregulation, created important challenges for economic policy coordination at the national level, since regional governors resorted to violence, repression and authoritarian rule to strengthen their positions.[51]

New political actors entered the political arena. The economic adjustments of the Salinas presidency and the political shock of the early 1990s created an electorate that was less loyal to the PRI and opened windows of opportunity not only for opposition parties but also for several social groups not operating through traditional party channels.[52] The Ejercito Zapatista de Liberacion Nacional’s rise in the wake of the Chiapas conflict, the so-called narco-politicians group and the farmer-debtors’ movement became destabilizing forces within Mexican society.[53]

Though direct opposition to NAFTA was muted, civil society was more vocal, protesting in the street at each major round of negotiations. While it may be legitimate to recognize the power of these new forms of locally-based civil mobilization to interact directly with global processes, it is also true that this new resistance could probably also be read as the direct consequence of the rescaling of the role of the Mexican state under neo-liberalism.[54] As the market approach to governance called for an upward centralization of the governmental central authority to the global level in order to accommodate economic interests, privatization and decentralization dynamics gradually opened new opportunities for sub-national and local governments. Rubio underlines this increasingly diverging gap between the national and the sub-national dimension in Mexican politics and society. On the one hand, states, regions and local actors have been trying to assert their right to participate in national politics, as the central government partially withdrew its influence over local politics. On the other hand, the Mexican government, susceptible to international pressures, has been changing in a way that seems unresponsive to a considerable part of its citizens. But if elected governments do not have great freedom of action in their economic and social policy-making, due to powerful external constraints, people may be right to consider popular sovereignty as being significantly restricted by the logic of neo-liberalism. It thus follows that when people feel they cannot make much difference through the traditional instruments of participative democracy, they will look for alternative channels to make their voices heard. The market approach to governance thus restricts, rather than enhances, public participation and community-building.[55]

While the nation’s formal political institutions (the presidency, the congress, political parties and many interest groups) under Zedillo began to experience a profound transformation in terms of political opening, the non-institutional side of Mexican politics did not.[56] Organizations representing land invaders, militant unions that hold a monopoly in such sectors as electricity and oil, violence-prone students, illegal taxi drivers and other participants in the unofficial economy do not rely on elections to express their own preferences or positions, for they can influence the functioning of the state and the economy through illegal and often violent means. Such non-institutional groups threaten to undermine Mexican democracy and the stability of the country as a whole, but they are often protected by political parties (such as the PRI and the PRD), thus making their actions more difficult to identify and to restrain.[57]

One of the main challenges facing Mexico today is whether the country will be able to bring these non-institutional actors into the formal political arena and create new institutions that can accommodate new demands for political responsiveness and accountability.

The Institutionalization of Uncertainty

According to Dresser, Zedillo was the first Mexican president from the PRI’s ranks willing to sacrifice his party for economic liberalization and to acquiesce to the electoral rise of the opposition. But Zedillo was unable to create a popular consensus for economic adjustments and free trade. Salinas’s strategy of vote-buying through social programs was no longer adopted: Zedillo denied public compensation schemes to liberalization’s losers, thus deepening regional cleavages and inequalities, eroding government credibility and increasing public disaffection with NAFTA.[58]

Salinas was able “to keep democracy off the NAFTA negotiating table.”[59] He actually depoliticized free-trade negotiations and ensured the political viability of his neo-liberal agenda through a skillful redefinition of the ruling coalition and state-society relations. In contrast, under Zedillo the same silent integration into NAFTA did not occur. Despite the emergence of a new vibrant and active political arena and the “explosion of political action,”[60] the new president proved unable to substitute the components of the previous authoritarian system with stronger and credible democratic institutions.

Certainly, Zedillo fostered Mexico’s transition toward a more pluralistic, participative and inclusive democratic system. But transition is, by definition, an ongoing process that includes uncertain and unpredictable outcomes. The ratification of NAFTA has influenced the Mexican political system in a way that makes the country more difficult to understand. Under Zedillo, the interplay of NAFTA with the long-term political problems of seven decades of single-party rule resulted in a positive political opening. Yet, paradoxically, as Dresser argues, during the post-NAFTA era Mexico has become a more democratic yet disaggregated, complicated and decentralized country. In the past, Mexico stood out as one of the most predictable countries in terms of political orientation, since the PRI’s electoral victories were the rule. However, since the mid-1990s, Mexico’s political dynamics have been marked by the “institutionalization of uncertainty.”[61] Unresolved guerrilla welfare, poverty and inequality, competitive elections, corruption and drug trafficking will continue to pose serious challenges to any political coalition.

Zedillo made Mexicans understand that a reversal toward authoritarianism would never have happened. His country embarked a transition to democracy coupled with a deeper dedication to economic integration. What Zedillo actually provided was the “hardware of democracy”: a broad political system; a more balanced relation among the executive, the legislature and the judiciary; open electoral competition; decentralization of power; and a more participatory civil society. Yet the country would have had to develop the instruments of the “software of governance” in order to make its commitment to democracy irreversible.[62]


By providing a critical review on the NAFTA impact on the Mexican political system, this paper has concentrated on explaining the sequencing and the interplay of economic and political liberalization during the Salinas and the Zedillo administrations.

The NAFTA issue has entered the analysis as an intervening variable, interacting with the long-term political defining features of the Mexican political system: hyper-presidentialism, one-party rule, corporatist coalition-building and clientelistic state-society relations. Without assuming that democracy is necessarily the outcome of economic liberalization, this study has provided economic reasons for the different political arrangements that occurred in Mexico between 1988 and 2000.

President Salinas adapted the Mexican political system for neo-liberal reform. His redefinition of the ruling coalition, together with the transformation of state-society relations, worked to decrease the perceived political and economic cost of NAFTA, thus making the free-trade agreement politically viable. Therefore, economic liberalization did not result in a process of political opening, but in a paralysis of the Mexican political system along new populist, corporatist and clientelistic lines.

By contrast, economic integration and market reforms under Zedillo triggered an ongoing process of political liberalization. The 1994 political shocks in the wake of Mexico’s entry to NAFTA forced the administration to remove the old authoritarian legacies of the Salinas era. However, party competition, fair elections and a vibrant civil society have been interacting with domestic uprisings and lack of political legitimacy. Thus, Mexico’s path toward democracy has been marked by increasing political uncertainty.

The economic reforms of the 1980s and 1990s brought about a gradual redefinition of the structure of power that progressively liberalized the country’s politics and provided new breath for a tired political system. These changes culminated in the 2000 election of Mexico’s first non-PRI president for more than seven decades, Vicente Fox of the PAN, a development that seemed to signal the full emergence of a Mexican democracy. Whether— and when—the country will reach the status of a full-fledged democracy is still hard to predict. However, one point is clear. Whatever the final outcome, the Mexico that emerged from the 2000 elections will never be the same. Although unruly, Mexican politics has dispersed political power to such an extent that the likelihood of returning to the old model of authoritarian rule has practically disappeared.

Yet the process of building a developed Mexican democracy remains complex. The point is not whether Mexico will succeed in maintaining this positive path toward democratization—in which the final rupture of the traditional link between the presidency and the PRI is the greatest achievement—but whether the country will be able to adapt the entire political system to new changing political realities.

When it comes to democratic experience, Mexico is a relatively young and untried country. Mexico has no experience of formal coalitions, institutionalized party competition, regular and pacific alternation of power and changes of leadership through fair elections or an effective integration of civil society into the political discourse. In order to make its commitment to democracy irreversible, Mexico must replace the old-style institutional political design. The risk of political paralysis is latent if politicians are not willing to dismantle many of the institutions of one-party rule, a period in which political paralysis was necessary for the maintenance of PRI hegemony.

While it is true that the old political system is dead, a new political attitude based on consultation, consensus and the exercise of democratic authority has yet to be created. More needs to be done to bring openness and accountability to all political levels.

The economic reforms of the 1980s and 1990s created, over time, opportunities for the development of a democratic polity that were inconceivable in Mexico only a few years before. But they also posed an extraordinary challenge for the development of a new political system that makes participatory governance, transparency and accountability its main elements. Otherwise, Mexico risks finding itself in limbo, constrained by political innovation on one side and by political inertia on the other.


I wish to thank an anonymous reviewer for her stimulating comments and valuable suggestions.

Notes & References

  1. Judith Teichman, “Neoliberalism and the Transformation of Mexican Authoritarianism,” Mexican Studies/Estudios Mexicanos 13, no. 1 (1997): 139; Carol Wise and Riordan Roett, eds., Post-Stabilization Politics in Latin America: Competition, Transition, Collapse (Washington, DC: Brookings Institutions Press, 2003), 171.
  2. Guy Poitras and Raymond Robinson, “The Politics of NAFTA in Mexico,” Journal of Interamerican Studies and World Affairs 36, no. 1 (1994): 3-4.
  3. Maria Lorena Cook, Kevin J. Middlebrook and Juan Molinar Horcasitas, “The Politics of Economic Restructuring in Mexico: Actors, Sequencing, and Coalition Change,” in Cook, Middlebrook and Horcasitas, eds., The Politics of Economic Restructuring: State-Society Relations and Regime Change in Mexico (San Diego, CA: Center for US-Mexican Studies, University of California, San Diego, 1994), 29; Teichman, 137.
  4. Cook et al., 19.
  5. However, Salinas made some attempts to maintain the party’s traditional working- and middle-class support by selectively channelling public funds to the poor via the National Solidarity Program.
  6. Manuel Pastor and Carol Wise, “The Origins and Sustainability of Mexico’s Free Trade Policy,” International Organization 48, no. 3 (1994): 479; Strom C. Thacker, “NAFTA Coalition and the Political Viability of Neoliberalism in Mexico,” Journal of Interamerican Studies and World Affairs 41, no. 2 (1999): 78. Though the restructured coalition did not exclude any major group that had traditionally enjoyed representation, it tended to favor the interests of a “neoliberal duopoly” (that is, government and business), while reducing the relative weight of the labor and peasant sectors (Poitras and Robinson, 5). The coalition’s formal consultation mechanism, together with the process of NAFTA negotiations, granted large, international firms great influence in the business community and preferential access to government officials (Thacker, 78). On the other hand, workers, peasant and popular sectors were replaced by three main organizations: the Popular Territorial Movement, the National Citizens Front and finally the Worker Campesino Pact (Theichman, 137).
  7. Thacker, 62.
  8. Jolle Demmers, “Neoliberal Reforms and Populist Politics: The PRI in Mexico,” in Jolle Demmers, Jiliberto Fernández and Barbara Hogenboom, eds., Miraculos Methamorphoses: The Neoliberalization of Latin American Populism (London: Zed Books, 2001), 163.
  9. Pastor and Wise, 480. The core of private sector support for free trade was composed of large Mexican manufacturing firms (especially those that could have access to the US market for their exports), medium-sized manufacturers, capital-intensive foreign businesses, domestic suppliers of foreign businesses in Mexico and the international financial community (Poitras and Robinson, 14).
  10. Wayne A. Cornelius, “Mexico’s Delayed Democratization,” Foreign Policy 95 (1994): 56- 57.
  11. Poitras and Robinson, 24. Larger labor associations inside the coalition followed the PRI’s line in favor of free trade, despite the problematic impact that NAFTA might have had on Mexican workers. However, not all of them welcomed the free trade agreement. The opposition of the Worker Campesino Pact, for instance, is a good case in point (Poitras and Robinson, 23).
  12. Cook et al., 24.
  13. Poitras and Robinson, 19.
  14. Cook et al., 24.
  15. Cornelius, 55.
  16. Cook et al., 23; Pastor and Wise, 480.
  17. Poitras and Robinson, 19. This adjustment also responded to PRI electoral concerns. Given the declining capacity of labor and peasant organizations to mobilize their members in support of the PRI candidates, as testified by the 1988 electoral debacle, a territorial structure allowed the party to adapt itself to various urban electorate (Cook et al., 24).
  18. Cornelius, 57-58.
  19. According to Poitras and Robinson, 20, the PRI relied upon “cybernetic fraud” (that is, the use of computers to manipulate voting lists) to win elections.
  20. Poitras and Robinson.
  21. Pastor and Wise, 479.
  22. Poitras and Robinson, 11.
  23. Demmers, 171; Cook et al., 31.
  24. Cook et al., 31.
  25. Teichman, 121.
  26. Cook et al.; Teichman; Poitras and Robinson; Wise and Roett.
  27. Cornelius. In 1993, Salinas introduced a new program oriented toward rural area development, Programa de Apoyo Directos al Campo (PROCAMPO).
  28. Teichman, 140.
  29. Wise and Roett, 173.
  30. Poitras and Robinson, 28.
  31. Carol Wise, ed., The Post-NAFTA Political Economy: Mexico and the Western Hemisphere (University Park, PA: Pennsylvania State University Press, 1998), 13.
  32. Pastor and Wise.
  33. The PAN, moreover, objected to the PRI’s unwillingness either to consult with other sectors of the society on NAFTA or to be more open about the negotiation process in general. Potras and Robinson, 21.
  34. Poitras and Robinson, 15.
  35. Wise and Roett, 173.
  36. Pastor and Wise, 484.
  37. Francisco Panizza, “Beyond ‘Delegative Democracy’: ‘Old Politics’ and ‘New Economics’ in Latin America,” Journal of Latin American Studies 32, no. 3 (2000): 737-63.
  38. Demmers; Poitras and Robinson; Teichman; Wise and Roett.
  39. Peter H. Smith, “The Political Impact of Free Trade on Mexico,” Journal of Interamerican Studies and World Affairs 34, no. 1 (1992): 9.
  40. Smith; Poitras and Robinson; Stephen Fidler, “Mexico: What Kind of Transition?,” International Affairs 72, no. 4 (1996): 713-25; Wise and Roett.
  41. Luis Rubio, “Coping with Political Change,” in Susan Kaufman Purcel and Luis Rubio, eds., Mexico Under Zedillo (London: Lynne Rienner Publishers, 1998), 14.
  42. Wise and Roett, 179.
  43. Teichman; Thacker; Wise and Roett.
  44. The PRI ended up with 238 seats to 125 for the PRD, 118 for the center-right PAN and 19 for the smaller parties. It remained the largest party in the 500-member lower house. Rubio, 10.
  45. Luis Rubio and Susan Kaufman Purcel, eds., Mexico Under Fox (London: Lynne Rienner Publishers, 2004), 42.
  46. The economic package offered to the Mexican government in January 1995 by the United States, the International Monetary Fund and the international financial community facilitated a relative economic recovery and, as the crisis exacerbated, structural reforms and conditionality accompanied the disbursement of loans.
  47. Rubio, 17; Denise Dresser, “Post-NAFTA Politics in Mexico: Uneasy, Uncertain, Unpredictable,” in Carol Wise, ed., The Post-NAFTA Political Economy: Mexico and the Western Hemisphere (University Park, PA: Pennsylvania State University Press, 1998).
  48. Fidler, 721.
  49. Wise and Roett, 185.
  50. Ibid.
  51. Dresser, 226.
  52. Rubio, 20.
  53. Dresser, 1998.
  54. M. Warner and J. Gerbasi, “Rescaling and Reforming the State under NAFTA: Implications for Subantional Authority,” International Journal of Urban and Regional Research 28, no. 4 (2004), pp. 858-63.
  55. Ibid., 859.
  56. Rubio and Purcell.
  57. Rubio and Purcell, 6.
  58. Wise and Roett; Rubio.
  59. Cornelius, 70.
  60. Rubio, 26.
  61. Dresser, 256.
  62. Rubio, 6.
MARA STEFFAN is an M.A. candidate at the Bologna Center, concentrating in western hemisphere/Latin American studies and international economics with a specialization in quantitative methods and economic theory. She previously obtained a master’s degree in international and diplomatic science at the University of Bologna, where she also completed a B.A. in tourism economics.