Courtesy Reuters

Mexico at an Impasse

THE EXPECTATIONS REVOLUTIONS

The July 2000 defeat of Mexico's Institutional Revolutionary Party (PRI) after more than 70 years of rule sparked a revolution in expectations. There were celebrations in the streets, glowing editorials in foreign newspapers, and expressions of undiluted optimism in investment and policy circles. Newly elected president Vicente Fox projected a triumphant image of strength and confidence that inflated hopes at home and abroad: private investment would flood in, the rule of law would prevail, the sins of the past would be punished, and the U.S.-Mexico relationship would flower. More profoundly, Mexico would elude its existential condition as an underdeveloped nation.

Three years into Mexico's democratic transition, few of these dreams have been realized. Mexican politics are more democratic but less governable and are suffering from gridlock between the executive and legislative branches. The economy is stable, but growth and competitiveness are lagging as the next generation of reforms -- tax, energy, and labor -- falls prey to partisan bickering in Mexico's Congress. And the friendship between Fox and President George W. Bush has cooled over differences about immigration and policy toward Iraq. Mexico shows no signs of an imminent crisis, but its triple political, economic, and diplomatic impasse is taking a toll. The price of unreasonably high expectations has been premature disillusionment. A breakthrough in at least one area must come fairly soon -- lest Mexico's grand experiment with economic and political liberty fail to fulfill its potential.

UNGOVERNABLE DEMOCRACY

The principal concern of Mexico's political elite today is how to build governing majorities and achieve consensus. After three years of stalemate in Congress, there is debate over whether Mexico's political paralysis is the result of a constitutional structure that makes it inherently ungovernable or of weak leadership on the part of President Fox. The answer to this question is not insignificant. If the logjam is due to weak leadership, the presidential elections of 2006 might resolve the problem. If the logjam, however, is structural in nature, it will

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