2 Harvard International Review Blog » 2009 » February

February 23, 2009

1,003

Filed under: General, Latin America, North America — Jason Lakin @ 9:13 pm

That is how many drug-related homicides there have been so far this year in Mexico, a death rate approximately double that of 2008. If this keeps up, there will be over 10,000 cartel-linked deaths in Mexico in 2009. It is easy to exaggerate the size and shape of the cancer, as American military intelligence did recently when it dubbed Mexico, alongside of Pakistan, a “failed state.” On the other hand, while the comparison with Pakistan is inapt, American intelligence is right to be worried.

To be sure, half of the drug deaths have occurred in just one state in Mexico: Chihuahua. Though it is close to the United States, and particularly important to American anti-narcotics efforts, it is unfair to label all of Mexico as insecure because of a problem that is so heavily concentrated. Yet each week also brings new indications that the cartels are spreading far beyond the border region. Last week, the state of Chiapas, which is all the way on Mexico’s other border (with Guatemala), was forced to clamp down on security after men linked to the Gulf cartel were discovered in the sleepy town of Comitán. This followed closely on the heels of the detention of a pair of alleged drug runners with 60 grenades in the trunk of their car. This past Saturday, a grenade attack on municipal police in Zihuatanejo, Guerrero, hundreds of miles away from Chiapas on Mexico’s southwest coast, also bore the mark of cartel vengeance.

The government now believes that the cartels are moving more aggressively to claim parts of Mexico City as well. The past year and a half has seen five cartel cells dismantled in Mexico City and neighboring Mexico state, a sign of increased criminal activity in the heartland as much as improved government vigilance. Meanwhile, the violence is not confined to Mexico: in recent weeks, in both Honduras and Peru, government officials and international organizations have complained about their inability to contain the growing presence of Mexican cartels, or the associated violence. Closer to home, drug-related kidnappings in Phoenix, Arizona are also on the rise, earning the city a reputation as the “kidnap capital” of the United States. According to the L.A. Times, there were 366 kidnappings-for-ransom in Phoenix in 2008. The spread of cartel influence up and down the Americas is very real.

The radiation of the cartels coincides with another development in the region: the rise of domestic drug demand. In the past, the drug problem has typically been defined as a supply issue in Latin America and a demand issue in the United States. But recently, that picture has begun to morph. Figures from the United Nations International Narcotics Control Board show that domestic cocaine consumption in Mexico doubled between 2002 and 2008. And a new report from Latin America’s Commission on Drugs and Democracy, convened by, among others, former Mexican President Ernesto Zedillo, points out that “the levels of drug consumption continue to grow in Latin America while there is a tendency toward stabilization in North America and Europe.” With this in mind, the Commission calls for a new approach to the scourge: decriminalization of cannabis, and renewed emphasis throughout the hemisphere on prevention and treatment of drug abuse (understood primarily in public health, rather than criminal, terms).

There is nothing to celebrate in the spread of violence or addiction, but there is at least a possibility that these structural changes could herald a hemispheric approach to dealing with drugs. Anything less is counter-productive: most attempts to clamp down on drug production or distribution in one place simply shift the supply, and violence, to neighboring areas. This kind of cost-shifting is unlikely to lead to the destruction of the cartels or to regional security.

President Obama is rumored to be considering Seattle police chief, R. Gil Kerlikowske, for the nation’s unenviable post of drug czar. Kerlikowske is known as a moderate who neither led nor obstructed attempts to move Seattle toward an emphasis on prevention and treatment, rather than criminalization. This could augur a mild shift in America’s stance in the war on drugs. Whoever leads America’s drug wars next should call a hemispheric summit to begin building a coordinated approach. It may be too much to ask for decriminalization in the short term, but perhaps our new drug czar could be someone who, like Kerlikowske, is “not necessarily regarded as having forcefully led those efforts, but he has not gotten in the way of them” either.

February 9, 2009

A Glass Half Full

Filed under: Development, Latin America — Jason Lakin @ 8:59 pm

About a week ago, the International Budget Partnership (IBP) released its 2008 Open Budget Index. The index measures budget transparency in 85 countries around the globe. Governments are ranked from 0 to 100 based on the quality and quantity of budget information they make public. According to the 2008 numbers, the United Kingdom is the most transparent nation in the world, with 88 out of 100 points. The United States is not far behind, also ranked in the top category, “Provide Extensive Information,” with 82 points.

Mexico ranks a 54 on the scale. That qualifies it for the broad middle category on transparency, “Provide Some Information.” Several other Latin American countries also fall in this category: Argentina, Colombia, Costa Rica, and Guatemala. Mexico under-performs Brazil and Peru in the region, however, both of which make it into the “Provide Significant Information” category. The country’s score barely inched up since the last index was released in 2006, when it garnered 50 out of 100 points, also landing it in the “Some Information” category.

The questionnaire used to generate the index is complex, involving nearly 100 questions concerning eight budget-related documents. Are there any general patterns that explain Mexico’s mediocrity on budget transparency? Analysts familiar with Mexico might assume that the index plummets like an anchor in bath water because of the null transparency of most county and state budgets. But the Open Budget Index ranks only the federal budget process, so the veil of secrecy surrounding local budgets does not count against Mexico. One strike against many budgets ranked by IBP is the lack of a so-called “citizens’ budget.” This is a companion volume to the legislation that explains in common language what is actually in the budget. Only 18 countries produce such a document, and Mexico is not one of them. Because the index ranks countries on the availability and quality of a set of budget documents, including the citizens’ budget, Mexico automatically falls on the scale as a result of this omission. Mexico is also penalized in some cases for not including information in its budget that is publicly available elsewhere (e.g., actual revenues from prior years).

Some might argue that these are relatively marginal transparency issues. Yes, a citizens’ budget is important, but if the budget is readily available, other organizations can “translate” it. Yes, prior year revenues should be in the budget, but as long as they are publicly available elsewhere, the country should not get docked too severely for this omission.

But Mexico also scores low in several other important areas that are less easily explained away. For example, the proposed budget sent to Congress rates poorly on information related to the projected budgetary impact of proposed policy changes. In other words, neither legislators nor the public are given adequate information to predict the budget impact of new programs or changes to existing programs proposed by the president. Furthermore, neither legislators nor the public are consulted by the executive in the creation of the proposed budget. Public hearings on legislation are sometimes held, but information about these public hearings that is actually made public is, according to the report, “null.” A large percentage of the budget is funded through less transparent supplemental requests rather than the regular budget process. The audit process does not formally allow for citizens to make complaints or requests that affect the budget auditing process.

Other flaws in Mexico’s budget process seem to be as much about the limits of Mexican democracy as a lack of transparency. For example, the report finds that legislators face important constraints in amending the president’s proposed budget. The president may also reallocate funds without legislative approval; in 2006, the president reallocated one fifth of the initial budget without approval! These findings speak more to over-centralization of the policy process and a weak legislature than to an opaque budgetary process, but however they are classified, they indicate areas of the budget process in need of reform.

The IBP index has not been around for very long, but Mexico undoubtedly would have scored much lower a decade ago if it had been. Given the country’s past, a score of 54 is hardly shameful, and Mexico is slowly moving in the right direction. But no country should be content with being (just a bit above) average, and Mexico has a way to go before it can be proud of how transparent its budget process has become.

February 2, 2009

Social Distortion

Filed under: Development, General, Latin America — Jason Lakin @ 4:02 pm

This past summer, former President Bill Clinton trumpeted the success of Mexico’s 2003 health reform, which created a government-subsidized insurance program for the poor. He claimed that even the United States could learn something from Mexico’s experience. The international discussion of the program, known as Seguro Popular, or Popular Health Insurance (PHI), marked the second time in recent years that a Mexican social policy experiment was touted as an export product. Mexico’s conditional cash transfer program, PROGRESA (now known as Oportunidades) has received not only the vapid accolades of international celebrities, but the truest form of flattery: widespread, global imitation. Many countries have created their own versions of the program, and they were recently joined by New York City, where Mayor Bloomberg announced in 2006 that a city welfare program, Opportunity NYC, would also be modeled on PROGRESA.

Mexico’s government officials deserve substantial credit for their public policy innovations. Rigorous analysis of both PHI (to be published this year by The Lancet) and PROGRESA (of which there have been many studies; see this page for a summary) shows that these programs have had a measurable impact on poverty. Since many anti-poverty programs around the world are ineffective at meeting their principal goal, this is no mean feat.

And yet the global hype surrounding Mexican social policy often obscures or even distorts the true successes and limitations of these programs. The current approach to poverty reduction in Mexico may be an improvement over the past, and it may be more effective than poverty programs in other countries, but the overall impact of Mexican anti-poverty programs is still marginal.

Take PROGRESA/Oportunidades. The program was specifically designed not only to reduce current poverty, but also inter-generational transmission of poverty. Conceptually, therefore, one goal of the program is to keep poor kids in school by replacing lost wages from child labor with a stipend. Mexican officials generally argue that Oportunidades covers the bottom two deciles of the income distribution in Mexico now, so that basically all of the poor have access to the program. That isn’t quite true: by design, citizens with very limited access to clinics or schools are not eligible for the stipend (you have to send your kids to school/clinic to get the cash). In addition, a recent study found that over 3.5 million poor children in Mexico continue to work. That is approximately 9 percent of the country’s under-18 year olds. Even though Oportunidades effectively reduces poverty, then, either the stipends are not large enough, or the program is not serving all of those who need it.

PHI suffers from similar deficiencies: it addresses a small part of the problem it is designed to address, but leaves major issues unresolved. In a 2006 article in The Lancet, analysts associated with the PHI program referred to it as a “comprehensive reform,” and this view has taken hold in international policy circles, as evidenced by Clinton’s remarks. Yet while PHI probably has improved health care for a part of Mexico’s population, the reform was not comprehensive: it left untouched the providers of nearly half of Mexico’s health services, publicly funded social security institutes. The rationale for this omission was that the insured population covered by social security received adequate care, while those who really needed a new approach to delivery were the uninsured.

There is no question that the worst off in Mexico were those without any kind of insurance coverage. But the social security institutes in Mexico are also in need of serious reform. An article in Mexican daily El Universal today reports that IMSS, the largest of the social security institutes (covering somewhere around 40 million lower middle-class Mexicans), leads the list of government agencies facing formal complaints of human rights violations. The institute is riddled with corruption and provides low quality services only after stonewalling beneficiaries with bureaucratic obstacles.

IMSS, as well as the other social security institutes, are in need of thorough reform of their organizational models. Many of the reforms that they require, such as changing the financial structure so that money is spent on the services patients need most, rather than those bureaucrats most prefer to offer, are the same kinds of reform that were supposed to motivate the PHI reform in the uninsured sector. A truly comprehensive reform would have instituted such changes across the entire Mexican health sector. As it is, these reforms were not attempted in IMSS in 2003. And, as my dissertation demonstrates, they have had limited success even within the PHI program.

Mexico deserves to be in the limelight for its attempts to reduce poverty and improve health. But we cannot learn much from these experiments if we ignore the context in which they have been attempted. Mexico’s economy and its health system exclude large numbers of citizens from quality jobs or quality health care that would allow them to live comfortably. Neither PROGRESA/Oportunidades nor PHI has fundamentally altered this reality. Both have marginally improved the lives of the poor. Both are entirely inadequate.