Mexico's Fourth Transformation gets serious
But it won't make things worse, just make it harder to get better
In 2019, we tried to get a large solar power station built in Mexico. We failed. We did not fail because we couldn’t assemble a good parcel. We didn’t fail because we could not line up buyers for our power at competitive prices. We did not fail because we failed to get the various environmental, social, and technical studies finished. We did not fail because we could not line up engineering, procurement, and construction or get financing. All that, we got done.
No, we failed because the federal government of Mexico didn’t want us to succeed. The bureaucracy simply never got around to approving our final interconnection permit. We heard a whole number of excuses, including the covid pandemic, but when they ran thin it devolved into simple stonewalling. The “independent” grid operator and energy commission were not operating at all independently of the AMLO administration.
What were we gonna do? Sue? Hahahahahahahaha!1 The idea of suing the federal government in Mexican courts was too risible to consider seriously.
In short, independent government agencies held up a routine approval for specious reasons and killed a multi-million-dollar project because the President wanted to kill it. (It wasn’t personal; all solar developers faced the same problems.)
And that, at the end of the day, is why neither the just-passed judicial reforms nor the soon-to-be-passed regulatory reforms worry me all that much. Mexico has long had good institutions on paper. In practice, not so much.2 And even when the practice meets the promise on the paper — who can resist a good alliteration? — it as often as not merely enables obstruction.3 The reforms are bad. But they likely won’t make much worse.4
Establishing judicial elections
Congress just passed a constitutional amendment with the requisite two-thirds majority in both houses. It now needs a majority of the state legislatures, but that will be a formality. And that is normal. I cannot stress more strongly how often and easily Mexico amends its Constitution, even though on paper it looks only slightly less difficult than it is in the USA.
What did the reform do? Short version: it made most judgeships, including the Supreme Court, into elected positions. Just like those dictatorial hellholes of Illinois, Alabama, Illinois, Louisiana, New Mexico, North Carolina, Pennsylvania, and Ohio.5 But the Mexican system won’t be openly partisan, so we should also include states that hold nonpartisan judicial elections: Arkansas, Georgia, Idaho, Kentucky, Minnesota, Mississippi, Montana, Nevada, North Dakota, Oregon, Washington, West Virginia, and Wisconsin. That is 21 of the 50 united states … and if we wanna get expansive, we can add Guam and the Commonwealth of the Northern Marianas Islands (CNMI).
None of these are exactly undemocratic one-party polities, although recent governments in Wisconsin and North Carolina tried pretty hard, and Illinois is kind of a mess.
In Mexico, potential candidates will have to be selected by either the president, congress, or the existing judiciary. Each branch will select a long list of candidates. The candidates need to have law degrees, at least. A lottery picks candidates from each list for the ballot and then it goes up to election.
There are a few other wrinkles. The body that disciplines judges will also be elected. The Supreme Court will be cut from 11 to 9 (and be elected to staggered 12-year terms). In addition, right now the Supreme Court has subcommittees. Those would be eliminated and all decisions moved to the plenary session, as in the United States.
Finally, and importantly, judicial salaries would be cut drastically — no judge would be allowed to earn more than the President of the United Mexican States.
Creating a unitary presidency
The United States has a long history of establishing regulatory agencies with executive power, but which are independent of the President.6 There is an ongoing controversy over the constitutionality of these agencies. The argument is that since Article 2 of the Constitution vests “the executive power” in the President, and so the President should have direct control over all these agencies. But considering as the First Congress of the United States established an independent commission, the idea that the Constitution created a unitary presidency is not, shall we say, uncontested.7
A proposed amendment to Mexico’s constitution would eliminate the independent agencies and transfer their functions to the regular ministries, under more-or-less direct Presidential control. So the competition commission would go the Department of Economics, the telecoms regulator would go to the Department of Education (what? don’t ask me, I don’t know and it doesn’t matter), the energy commissions would go to the Department of Energy. The National Guard (a sort of national police force) would to the Department of National Defense.
It’s the U.S. equivalent of transferring the functions of FERC, the FTC, the NRC, and the TVA to the Commerce and Treasury Departments. The agencies would still have all their powers, but their heads could be fired and replaced by the President at any time for any reason. (The U.S. has no equivalent of the Mexican National Guard.)
The reform would also abolish the Transparency Institute and transfer its functions to the Department of Public Administration. As with the National Guard, the U.S. has no equivalent of the Transparency Institute to transfer.
There are also some proposed energy reforms here, which would have the upshot of privileging generation from the state-owned Federal Electricity Commission (CFE, pronounced “say-fay”) over private generation, even when the latter is cheaper. It could even be interpreted to ban private investment in electricity generation, although that strikes me as a stretch.
Changing the electoral system
Two big changes here. First, the National Electoral Institute (INE) will be turned into the National Institute of Elections and Consultations (INEC) and be elected rather than appointed. (Candidates will be nominated using the same nonpartisan procedure as judges.)
Second, Congress will now be entirely elected using geographical districts and first-past-the-post elections, as in the United States, United Kingdom, Australian Commonwealth, and whatever Canada calls its federal government.8 The lower house would be cut to 200 members and the Senate would now consist of just two Senators per state.
What, me worry?
None of these reforms are what I would consider good. They are all terrible. But consider my personal experience. The old institutions did nothing to stop AMLO from kiboshing a nine-digit solar power plant that had the enthusiastic support of the state government.
And my experience is not alone.
Mexican institutions are weak and (with the major exception of the electoral institute) AMLO showed that they were easy to subvert. This is true even of the electoral system. The Constitution is designed to stop one-party from getting the two-thirds majority needed to push through constitutional reforms unilaterally. So AMLO creates coalition with the Labor Party (practically a Morena subsidiary) and the Greens. Voters vote for the coalition but the seats get split up between the parties as per the agreement and voila! Morena gets a 2/3rds majority.
So, sure, moving to first-past-the-post makes it more likely that a minority government will retain power. (Just ask the British! Or more depressingly, the Hungarians.) Absolutely, putting the electoral referees up for popular vote makes little sense. As for electing judges, well, when President Cristina Fernández tried to import judicial elections to Argentina in 2013, I panned it. And my opposition to Senates that give unequal jurisdictions equal weight is very public!
But there are four things to keep in mind.
First, what I said above: institutions weren’t working very well before. And that’s not just the experience of pointy-headed would-be energy entrepreneurs like Leticia Abad and myself. The excellent
has pointed out that myriad everyday Mexicans have awful experiences with Mexican courts. (Go subscribe to right now!)As Gonzalo Monroy pointed out on Twitter, these reforms don’t make Mexico undemocratic, just a bit less liberal.
Second, there are good arguments in favor of all these reforms. Chris Bonneau (University of Pittsburgh) and Melinda Hall (Michigan State) wrote a very entertaining book (review here) in 2009 in favor of judicial elections. And for what it’s worth, so was Woodrow Wilson:
If you can recover for the people the selecting of judges, you will not have to trouble about their recall. Selection is of more radical consequence than election.9
The same applies to the unitary executive. It can increase accountability, since it makes the President responsible for executive actions on her watch. It can improve responsiveness, since the executive will be empowered to cut through bureaucracy. And it can even reduce patronage, since cutting out Congress will reduce the need to horse-trade about officeholders.10
I don’t buy these arguments in the Mexican context. I would oppose similar reforms in the United States, the Kingdom of the Netherlands, or the Argentine Republic.11 But they are valid counterarguments!
Third, investors didn’t do much voting with their feet despite AMLO’s fairly bad policies and Mexico’s weak institutions. If you squint at the below chart, you can maybe see a slight decline in foreign direct investment since 2018 … but not very much. (The World Bank also record FDI outflows — no action there either.) I would argue that Mexico should have seen a giant nearshoring boom that didn’t happen because of AMLO, but you can’t argue that he made things much worse.

Maybe this time will be different, but I really wouldn’t count on it. A major FDI decline in the next few years would prove me wrong.
Finally,
made an excellent argument. Attempts by elites to use undemocratic means to overturn popular reforms have generally not ended well. She quoted Adam Przeworski: “Elections may generate outcomes that a minority finds repulsive. But democrats must be prepared to face defeats, even if their values are at stake.”In short, the reforms are bad, but as I argued back in 2018, Mexico was already pretty badly governed. I didn’t think that AMLO would make things much worse, and I still have that opinion even with the flurry of recent actions.
No, the tragedy is that AMLO has made it even harder than it would have been in ‘18 to make Mexico better. I wish President Sheinbaum the best of luck. At least AMLO is no Plutarco Calles …
We did consider trying to pull in some contacts with the Trump administration to put pressure on the Mexican government, but we dismissed that pretty quickly.
We had one of the best law firms in Mexico. They suggested that it would be impossible to get an amparo to force the government to do something, rather than stop doing something, and that it might be ignored even if we got it. I want to mention them by name, because they were awesome, but a little birdie tells me that I shouldn’t.
An “amparo” — in essence an injunction against actions that violate Constitutional rights — can be fairly easy to get if you have the right connections. But it rarely protects rights and it’s hard for ordinary people to get one. Rather, it’s more likely to be used to obstruct all sorts of otherwise salubrious projects, or get criminals out of jail.
The packing of the Supreme Court and the move to first-past-the-post elections. Those things move Mexico it a step towards Bolivia. The rest does make future improvement less likely but doesn’t make anything worse in the here-and-now.
Also Alabama, , but honestly those states have weaker claims on good government than the ones mentioned in the main text. Although there’s a good case to move Illinois into this footnote.
The Interstate Commerce Commission (est. 1887) is the most famous.
The link goes to Christine Chabot, “Is the Federal Reser al Reserve Constitutional? An Originalist Argument for Independent Agencies,” Notre Dame Law Review (2020).
We’re not supposed to call it the “Dominion” anymore, but there is no name for it other than “the federal government” in lowercase. Or just “Canada,” which I find annoying, because dammit a country is more than just the state that governs it! The state should have a different name that the country.
Quoted in Glaeser and Shleifer, “The Rise of the Regulatory State,” JEL (June 2003).
I have a bit more personal moral authority to make pronouncements about those three polities than I do about Mexico. And not just because all three have major political figures known for their stupid hairstyles.