This issue brief examines the signals conveyed by Mexico's 2014 energy reforms, and analyzes the limitations in law, institutional design and policy that may delay, if not derail, the reforms' success.

Under proposed legislation to implement Mexico’s energy reforms, Pemex will remain a privileged state operator supporting exploration and production in most of the country's proven onshore and shallow water fields. It is not known if energy reform will effectively turn Pemex into a firm able to compete without policy bias against private investors.

Mexico's organized crime groups have expanded into areas that include the theft of crude oil, gas and gasoline. The impact of organized crime on the energy sector is a real threat to the intended effects of Mexico's energy reforms.

Fossil fuel subsidies have allowed energy exporting countries to distribute resource revenue, bolstering legitimacy for governments, many of which are not democratically elected. But subsidy benefits are dwarfed by the harmful consequences of encouraging uneconomic use of energy. Now, with consumption posing a threat to long-term exports, governments face a heightened need to raise prices that have come to be viewed as entitlements. While reforms of state benefits are notoriously politically dangerous, previous experience shows that subsidies can be rolled back without undermining government legitimacy — even in autocratic settings — given proper preparation.

Mexico’s 2013–2014 energy reform promises to bring the country’s economic drivers and regulatory institutions in line with the global practices of free market democracies. If successful, this development would be a 180-degree turn. The accomplishment of such realignment is hardly assured, however.

Leading U.S. immigration experts, public policy scholars and political figures debate issues and solutions to crucial questions surrounding comprehensive immigration reform.

To access the full paper, download the PDF on the left-hand sidebar.

Abstract

For more than two decades, the U.S…

To access the full article, download the PDF on the left-hand sidebar.

When U.S. President Barack Obama addressed the…

Introduction: What We Seek to Achieve¹

As the situation in the borderlands becomes more dire, there have been—and will…