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The most recent energy reform in Mexico, which allows for private and foreign investment in the exploration, production, storage, and transportation of hydrocarbons, is the most radical institutional change this country has undergone since the legendary expropriation of oil companies by President Lázaro Cárdenas in 1938.
Under what conditions was such an institutional change possible? Answering this question involves, in the first place, analyzing the theoretical factors that increase the probability of a political change of such magnitude within a political context that is particularly complex—one in which no political party has had an absolute majority in Congress since 1997, and which has been historically adverse to a change of this nature (Serra 2011). Tsebelis (2005) posits that a change in the status quo of a public policy is possible only if there is a majority coalition of players who favor such a change. Considering that the origin of the energy reform was a constitutional change, its approval required the support of two-thirds of the legislators in both chambers of Congress. On December 12, 2013, the constitutional reform was approved by 77 percent of the senators, 1 173 days after the bill was presented by the executive branch.
The main goal of this article is to analyze how this majority, one of the most relevant legislative majorities of the last seventy years of parliamentary history in Mexico, was achieved. The interest in this reform, called by the current government “the mother of all reforms,” arises from three paradoxical elements. First, during the past six-year term, the Institutional Revolutionary Party (PRI)—the party currently in power and the promoters of this change—opposed a similar initiative proposed by the previous National Action Party (PAN) administration of Felipe Calderón. Second, among the countries that opened their energy sector to private initiatives over the last decades, the current trend in the region is opposite to the policy being pursued by Mexico; that is, governments have attempted to recover total control (Argentina and Bolivia) or partial control (Brazil) of national companies. 2 This means that the state renationalized or increased its participation in the shareholding of the “national” energy companies. Finally, state-owned petroleum company Petróleos Mexicanos (PEMEX) 3 is considered to be a national symbol, and Mexican public opinion mostly opposed the reform.4
This paradoxical situation, in addition to the sensitive nature of a reform that, according to the opposition, “jeopardizes the energy sovereignty of the nation,” has caused different players to question its democratic legitimacy. Critics point out two traits that characterized the political process that led to the reform: on one hand, the low representative nature of the ideas and arguments put forth by the political players of the majority coalition; and, on the other hand, the exclusion of relevant voices from the debate prior to coming to a decision.
In turn, the promoters of the reform argue that the need for change that would enhance domestic and foreign investment in the energy sector and would limit the monopolistic power of PEMEX and of the state-run Federal Electricity Commission (CFE) had been fully established during the public debate over the past several decades. According to this line of argument, the populist position of a dogmatic left was the main obstacle to a higher-quality deliberative process. Confronted with an unwavering position, the majority coalition in both chambers maintains that it acted in a responsible manner, staking their political capital on a project that was unpopular, but necessary. Promoters and detractors alike use terms such as “masterly” or “paradigmatic” in reference to the efficacy of the political strategy employed to go ahead with this reform.
Critics and promoters also recognize that the actual energy reform legislation was preceded by decades of public deliberation during which both the privatization project as well as the nationalistic vision of the industry were discussed. However, there was no general consensus reached regarding these alternatives. Therefore, while defenders justify the reform based on criteria such as competitiveness, economic efficiency, and energy sustainability, its critics maintain that the majority coalition, knowing that it had the necessary votes for approval, prevented a frank and open discussion of all the relevant policy alternatives and blocked an in-depth analysis of the contents of the bill by the plurality of affected interests. This work analyzes the political process that gave rise to the reform in order to (a) understand the central elements of the political strategy used and the nature of the interests that were reflected in the final result of the negotiation, and (b) determine whether the criticism regarding the quality, scope, and inclusiveness of the deliberations is justified. This second level of analysis strives to answer the question of whether the legitimacy of the reform can be questioned.
The specific research questions that will guide our analysis are the following: Who were the actors that were promoting and opposing the reform that was ultimately approved? What were their interests, arguments used, and strategies deployed to negotiate the parliamentary majority? And, finally, what was the quality of the deliberation process prior to the reform, both in terms of the scope of the debate (alternatives to be discussed) as well as the set of players involved, to determine the degree of legitimacy of the reform?
Theoretically, our research uses diverse and complementary analytical frameworks: the theory of political representation (Pitkin 1985; Manin 1998; Stokes, Manin, and Przeworski 1999; Rehfeld 2006; Mansbridge 2011), deliberative democracy (Elster 2001; Mansbridge et al. 2008), negotiation (Walton and McKersie 1965; Thompson 2001; Lewicki et al. 2011), and political analysis of public policies (Knoepfel et al. 2007). Our empirical analysis is based on 18 in-depth interviews with government officials and legislators of different party backgrounds and ideological positions who participated directly in the process, as well as representatives of the corporate sector, civil partnerships, and academia, whose testimonies were analyzed using qualitative methodologies to address our research questions. Because legislative negotiations are politically sensitive processes that take place, at least partially, in private and informal venues or under confidentiality agreements, we offered anonymity to all interviewees as a general rule, as a way to induce a more candid conversation. This rule is generally used in stakeholder assessments to ensure interviewees feel comfortable speaking openly and interests are adequately explored (Susskind, McKearnan & ThomasLarmer, 1999). Three exceptions to this rule are interviews with party leaders, only because these were originally videotaped for a different purpose, with the informed consent of interviewees. These interviews will be quoted in full form. For all other interviews, quotes will point to a member of a political party or stakeholder group in such a way that does not compromise anonymity. A complete list of all interviewees, dates of interviewees, and their affiliations is included in the appendix.
In the following section we describe the different diagnoses that motivated the need for and the possible directions of an energy reform. In the third section, we present the analytic frameworks used to assess both the effectiveness of political negotiation and the democratic legitimacy of the decision-making process. In the fourth section, we describe and assess the key moments of the negotiation and deliberation process that led to the reform based on the interviews. The final section presents conclusions and reflections on the future.
This material may be quoted or reproduced without prior permission, provided appropriate credit is given to the author and Rice University’s Baker Institute for Public Policy. The views expressed herein are those of the individual author(s), and do not necessarily represent the views of Rice University’s Baker Institute for Public Policy.