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OECD – World Bank Seminar Democratic Governance in Mexico:A Latin American Perspective
 Paris, 20th June 2007
Comments by
Javier SantisoChief Economist and Deputy Director
OECD Development Centre
Is Mexico different?
1
Fiscal policy and legitimacy in Latin America
2
Overview
Conclusions and policy lessons
3
Democratic Governance in Mexico
A very Hirshmanian exercise in “trespassing”.
A e focus on legislative processes and the implementation of reforms
“In a nutshell, many of the distortions observed in Mexico’s policy sectors result from the role of special interests in capturing the policy-making apparatus.”(page 1)
Mexico suffers from “interest group” politics, but so do many other Latin American countries.
Is Mexico different?
Institutional anchoring: A key driver of possibilism
Source: Mariano Tomassi. “The Institutional Foundations of Public Policy”. Journal of the Latin American Economic Association. Spring 2006.
Note: Based on expert and enterprise surveys
Is Mexico different?
Institutional anchoring: A key driver of possibilism
Source: Mariano Tomassi. “The Institutional Foundations of Public Policy”. Journal of the Latin American Economic Association. Spring 2006.
Note: Based on experts and enterprise surveys
Source: Mariano Tomassi. “The Institutional Foundations of Public Policy”. Journal of the Latin American Economic Association. Spring 2006.
Is Mexico different?
Institutional anchoring: A key driver of possibilism
Note: Based on experts and enterprise surveys
The difference is in fiscal policy, revenue generation
Tax revenue in Latin America
Tax revenue in OECD
Source: OECD Latin American Economic Outlook (ing) based on ECLAC and OECD Revenue statistics databases (2007)
Note: data are for (2004) and include social security contributions
% of GDP
% of GDP
50
Latin America suffers from low fiscal legitimacy
Fiscal legitimacy is the confidence people place in fiscal policy
Citizens’ satisfaction with the gover