Wednesday
May082013

The Persistence of Institutions in Mexico?  

Last week we pointed out that one hypothesis about why Why Nations Fail was unavailable in Mexican bookshops is that Carlos Slim owns the biggest book retailer in the country.

Now our point about Carlos Slim is not that he is a “bad guy”. Quite the contrary, he’s just behaving like a normal rational person would, responding to incentives and trying to further his interests.

Slim is in fact just the most recent incarnation of a long history of monopolization in Mexico that stretches far back into the colonial period. His monopolization of media is nothing new. Only the monopolizers and the strategies change.

To see this, ask yourself whether our book would have sold better under the long one-party rule of the PRI? Probably not. It certainly would have gone against the interests of the PRI elites — if they had noticed it. Probably it would have gotten even less media coverage.

To see why, let us turn to the most compelling account of the origins of the PRI and the way it worked is the 2008 book Mexico Since 1980 by Stephen Haber, Herbert Klein, Noel Maurer and Kevin Middlebrook. Though this looks like it is a commentary on contemporary Mexico, in fact it is a penetrating model of the political economy of the PRI and how it collapsed to usher in democracy.

The context for the creation of the party is the Mexican Revolution between 1910 and 1919. After the full-blown revolution stopped, intense violence continued. In 1920 the President Venustiano Carranza was overthrown and assassinated. His successors Álvaro Obregón and Plutarco Calles faced major revolts by the military and their own cabinet ministers in 1923, 1927 and 1929, and a civil war between 1926 and 1929, the Cristero War. In 1928 Obregón was assassinated after being re-elected president.

In response to the potential chaos, Calles crafted in 1929 the Revolutionary National Party (the PNR) that would eventually become the PRI in 1946. The PRI was an institution for incorporating and sharing power between the factious and violent elites who were endlessly scheming to overthrow the system. It also used agrarian reform as a way of consolidating peace in the countryside and creating a vast rural patronage machine to make sure it would win elections.

This new party program was implemented by President Lázaro Cárdenas between 1934 and 1940. In 1938 Cárdenas moved to exert control over the media with a simple strategy. He nationalized the production of newsprint which could not be imported. If you wrote something too critical of the PRI, you wouldn’t get any newsprint to publish on, and that was that.

Hence our guess that Why Nations Fail wouldn’t have sold well under the one-party state of the PRI either.

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