Posted on October 1, 2013

Remittances Abet Mexican Officials’ Irresponsible Behavior

George W. Grayson, Center for Immigration Studies, September 2013



From 1997 to 2012, an executive-legislative deadlock impeded decision-making by Mexico’s national government. Like nature, politics abhors a vacuum. Several groups filled the political void: Televisa, TV Azteca, and other media networks, multinational corporations, drug cartels, and venal boss-ridden labor organizations such as the Oil Workers Union (STPRM), the National Syndicate of Educational Workers (SNTE), and the radical National Coordinator of Education Workers (CNTE), which invaded Mexico City in September with 20,000 firebrands. Until the late-20th century, the nation’s 31 governors, the mayor of Mexico City, and many of the 2,435 municipal presidents typically played second fiddle to the president, finance and government secretaries, and key legislators. The stalemate, which began in 1997, transformed them from vassals to barons of their fiefdoms. Analyst Luis Rubio astutely observed that “Mexico is the only country that has evolved from a monarchy to feudalism.”

State executives may argue over abortion laws, the pros and cons of DF (Mexico City) statehood, and the legalization of marijuana in their bailiwicks. However, they agree completely on the importance of a generous immigration reform by U.S. decision-makers. At a meeting of Mexico’s National Commission of Governors (CONAGO), Eruviel Ávila Villegas, Mexico State’s chief executive and the group’s foreign affairs spokesman, emphasized the importance of the pending legislation. He stressed that “we must directly strengthen our international cooperation with governments and social organizations” in concert with the Ministry of Foreign Affairs (SRE). At the same time, the state leaders agree with Chihuahua’s free-spending Governor César Duarte Jáquez that the construction of a new wall between Mexico and the United States would be an “aberration”, even as his own country gropes for an effective deterrent to Central Americans and other foreigners crossing Mexico through Guatemala and Belize.

This Backgrounder (1) analyzes the windfall that state and local officials receive from remittances of Mexicans living abroad; (2) illustrates the irresponsible and illegal actions of state executives who receive 90 percent of their budgets from the federal government, even as they spurn using the taxing powers at their disposal; and (3) highlights the formal and informal powers exercised by the new viceroys.

I. Windfall from Remittances

During the first six months of 2013, the influx of dollars from abroad dropped 10.77 percent, which reflected sluggish growth in both Mexico and the United States. Nonetheless, the $10.7 billion influx from abroad allowed states to reduce outlays on education, health care, housing, nutrition, roads, bridges, environmental protection, and public safety for their citizens, many of whom live in hardscrabble poverty. Needless to say, they do not assess property and irrigated fields at the market value, and nine times out of 10 do not collect these taxes in order to ingratiate themselves with powerful and affluent supporters. Table 1 indicates the remittances received in the first halves of 2012 and 2013.





The debate over immigration reform has focused on its relevance for the United States and the illegal aliens who live within its borders. The discussion has failed to illuminate how the $21 billion in remittances helps corrupt, spendthrift governors and mayors divert public funds that could be used to address critical needs of their poorest citizens. Nor has attention zeroed in on the ubiquitous waste of resources on white elephants, unbid pharaonic projects beset by cost overruns and shoddy workmanship, outlays to friends and family members, and the sybaritic lifestyle, if not criminal actions, of elected officials. For example, the state government acted so slowly during the September 2013 deadly Hurricaine Ingrid that the notorious Gulf Cartel provided milk, juices, water, corn, and other foodstuffs to victims in Aldama and other municipalities in southern Tamaulipas state, which lies below Texas.