Universalist Reform of the Health Systems in Mexico and Chile. A Change of Time or Historical Inertia?

Abstract

The purpose of this article is to analyze the reforms to the health systems of Chile and Mexico, which occurred in the early 2000s. The intention is to determine if both reforma are part of a new era of social reforms in Latin America that has been classified as " Basic universalism" or if they deviate from that hypothetical tendency. This paper argues that although the two reforms assume as a purpose to universalize some segments of the public health services their scope is very different.

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Editorial Board
Alberto Díaz Cayeros, Stanford University
André Noël Roth Deubel, Universidad Nacional de Colombia
Blanca Olías de Lima, Universidad Complutense de Madrid
Carlos E. Barba Solano, Universidad de Guadalajara
Enrique Valencia Lomelí, Universidad de Guadalajara
Evelyne Huber, University of North Carolina
Francisco Longo Martínez, Escuela Superior de Administración de Empresas
Geert Bouckaert, Public Governance Institute, Katholieke Universiteit Leuven
Giandomenico Majone, European University Institute
Joan Subirats Humet, Universidad Autónoma de Barcelona
Luis F. Aguilar Villanueva, Universidad de Guadalajara
Manuel Villoria Mendieta, Universidad Rey Juan Carlos
María del Carmen Pardo, Centro de Investigación y Docencia Económica
Oscar Oszlak, Centro de Estudios de Estado y Sociedad
Tonatiuh Guillén López, El Colegio de la Frontera Norte
William Ascher, Claremont McKenna College
Printed in Prometeo Editores S.A. de C.V.,
1457 Libertad Street
Guadalajara, Mexico 44160
Managing Editor
Iván Alejandro Salas Durazo
Universidad de Guadalajara
Editorial Desing: Leticia Parra Lozano
Text Layout: Luis Rodríguez Hernández
JOURNAL OF PUBLIC GOVERNANCE AND POLICY:
LATIN AMERICAN REVIEW
Editorial contact:
Instituto de Investigación en Políticas Públicas y Gobierno,
Centro Universitario de Ciencias Económico Administrativas,
202-B Tower.
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Zapopan, Mexico 45100
http://iippg.cucea.udg.mx
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iippg.udg@gmail.com

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32
60
86
TABLE OF CONTENTS
107
153
Towards Health-Care Equality?
The Performance Of Seguro
Popular In México (2003-2013).
Carlos Moreno-Jaimes / Laura Flamand
Universalist Reform of the Health
Systems in Mexico and Chile. A Change of
Time or Historical Inertia?
Carlos E. Barba Solano
Metropolitan Governance and
Management: The Case of
Guadalajara Metropolitan Area
Roberto Arias de la Mora
Is it Possible to Generate Social Capital With
Government Actions?
The Public Spaces Rescue Program and
Citizen Participation in Western Mexico
Hiram A. Ángel Lara / Karen Martínez Gallegos
Reframing The “Rules of the Game”:
Through Governance, Transparency
and Fiscal Responsibility
Eneida Torres De Durand /Rafael Durand Aldea
Saúl Pratts Ponce De León / Alba López Arzola
César Sobrino/ Mari Glory González
Ramón Torres Morales
Democratic Governance in
Latin America:
By Scott Mainwaring and Timothy R. Scully,
Stanford, Stanford University Press
Piero Viteri

4
EDITOR´S INTRODUCTION
The second Issue of the Journal of Public Governance and
Policy: Latin American Review publishes a couple of articles
on Health System Reforms and Performance in Chile and
Mexico, and two case studies on Metropolitan Governance
(Guadalajara), and on the role of citizenship in the Public
Spaces Rescue Program (Western Mexico) as well. A new
section is also introduced in the current issue, that we call
Essays, in which authors address public subjects of overarch-
ing scope explaining its policy and governance implications.
In this issue a group of researchers writes on Governance,
Transparency and Fiscal Responsibility. The reviewed book is
Democratic Governance in Latin America (2010).
The call for papers for the third number of the Journal is
now open to theoretical and empirical contributions of Latin
American researchers. Our intention is to be a vehicle to
make known and put forward the relevant research prod-
ucts of Latin American colleagues to the world scientic
community.
Your articles, case studies, essays, book reviews on public
governance, public policy and public administration subjects
are welcomed and have to be sent prior to May 2nd, 2016.
Luis F. Aguilar/ Editor
Universidad de Guadalajara

5
Vol. 1 No. 2 December 2015
TOWARDS HEALTH-CARE
EQUALITY?
THE PERFORMANCE
OF SEGURO POPULAR
IN MÉXICO (2003-2013)*
Carlos Moreno-Jaimes** and Laura Flamand***
INTRODUCTION
The purpose of this article is to review the performance of a most am-
bitious initiative for public health care in Mexico, Seguro Popular (pop-
ular insurance), which aims to offer nancial protection in health to all
people not insured by the social security subsystem, around half of the
population in Mexico.
Inequality is the paramount challenge for Mexico, especially in the
health sector. Consider, for example, that a newborn in the state of
Nuevo León (one of the wealthiest and most modern states) is twice as
likely to survive her rst year of life as another infant born in the state of
Puebla (one of the ve poorest states). As we show throughout the ar-
ticle, these inequalities are similarly noticeable when examining the in-
puts of health services (personnel, infrastructure), service delivery (wait-
ing time in emergency services, distribution of medicines) and health
outcomes (diabetes control, maternal mortality rates) How is Mexico
solving this problem, is the government acting alone capable of alle-
viating it?
Although Seguro Popular is only a nancial tool, its effects for health
services and policy have been quite signicant: reductions in out-of-
pocket expenditures, increases in the use of health preventive services,
and patients increasingly aware of their right to health-care. Further-
more, the initiative has opened the possibility for the creation of a uni-
versal health-care system in Mexico nanced by general taxes instead
of contributory funding tending to characterize social security.
*A substantive part or the argument offered in this article draws on previous research on the issue,
specially our book (Flamand and Moreno, 2014), and a recently published article (Flamand and
Moreno, 2015). However, we present it for the rst time to the English-speaking public accom-
panied with fully updated data regarding the various dimensions of health inequality and the
performance of Seguro Popular.
**Research Professor, Instituto Tecnológico y de Estudios Superiores de Occidente (ITESO).
*** Research Professor, El Colegio de México (COLMEX).

6
Carlos Moreno-Jaimes / Laura Flamand
We conclude, however, that much more has to be done to achieve
health equality in Mexico. In particular, we suggest that given the new
and substantial inux of federal funding to the services provided by
the state governments, the latter have to be subjected to a higher
standard regarding access and quality. This higher standard may be
achieved through a combination of transfers dependent on reaching
specic quality indicators, and vigorous citizen oversight.
The article is organized into three sections. In the rst, we reveal that,
by design, Seguro Popular aims to reduce two types of inequality in
health-care provision: (a) In between the services for those with so-
cial security and those for the uninsured, and (b) among the Mexican
states, given that the operation of public health services in Mexico is a
responsibility of the state governments. The second section delves into
the performance of Seguro Popular after ten years of its creation with
the emphasis on nancing (especially out-of-pocket expenditures), ac-
cess to services, health outcomes, and the quality of service delivery.
The third section explores the proposals to create a universal health
care system in Mexico. We offer particular insights into the challenges
faced by these proposals regarding nance and delivery of services.
HEALTH INEQUALITY AS THE FUNDAMENTAL
PUBLIC PROBLEM IN MÉXICO
In this article, we claim that health inequality is one of the most salient
public policy problems in the present time for Mexico. But before de-
scribing its magnitude and characteristics, this section attempts to clar-
ify the concept of health inequality, to provide a broad perspective
about its causes, and to indicate some implications for policy.
THE MEANING AND CAUSES OF HEALTH INEQUALITY
What is to be understood by the term “health inequality”? In a sugges-
tive article, Margaret Whitehead (1990) argues that such a concept
involves a key ethical dimension, as long as it refers to differences that
are unnecessary and avoidable, but also unfair. Undoubtedly, in ev-
ery society there are unavoidable differences in the health conditions
of people, which derive from their biological disparities or from habits
that could be harmful for their health. These situations can hardly be
dened as unfair, as long as individuals freely choose them. However,
there are many other situations that cause inequalities in health out-
comes that are not inuenced by people’s determination, for example
working under hazardous conditions, living in settlement without ad-

7
Towards health-care equality?
The performance of Seguro Popular in México (2003-2013)
equate access to basic services
such as drinking water, sanitation
or electricity, or lacking enough
money to pay for a basic medi-
cal checkup. Of course, all these
are unfair situations because they
are not determined by people’s
free choices, and also because
they are unnecessary and could
be avoided. Therefore, according
to Whitehead, the goal of public
policy is not to eliminate all the
differences in health conditions,
but to reduce or eliminate those
derived from preventable causes.
Whitehead proposes the follow-
ing working denition:
Equity in health implies that
ideally everyone should
have a fair opportunity to
attain their full health po-
tential and, more pragmat-
ically, that no one should
be disadvantaged from
achieving this potential, if it
can be avoided (1990: 7).
If we agree with this denition
of health inequality, the next im-
portant question is what do we
know about its causes? Evidently,
health inequality, as many oth-
er problems in the public policy
realm, is a phenomenon caused
by multiple factors, some of which
have to do with individual deci-
sions, but also with contextual dy-
namics. However, one of the most
compelling arguments has been
termed the “theory of fundamen-
tal causes” originally developed
by Link and Phelan in 1995. They
argue that individually-based risk
factors should be contextualized
by examining what makes people
vulnerable to risks, and whether
social factors such as socioeco-
nomic status and social support
are “fundamental causes” of
disease (Link and Phelan, 1995).
In other terms, the authors con-
tend that access to key resources
(money, knowledge, power, pres-
tige, and social connections) af-
fects the manner in which people
avoid risks and adopt strategies to
protect their health.
In a more recent piece, Phelan,
Link, and Tehranifar (2010) argue
that social conditions remain the
fundamental causes of health in-
equalities:
If the problem is cholera,
for example, a person with
greater resources is better
able to avoid areas where
the disease is rampant, and
highly resourced communi-
ties are better able to pro-
hibit entry of infected per-
sons. If the problem is heart
disease, a person with
greater resources is better
able to maintain a heart-
healthy lifestyle and get
the best medical treatment
available (Phelan, Link, and
Tehranifar, 2010, p. 30).
There seems to be strong evi-
dence in support of the theory of
fundamental causes. First, Phelan
and colleagues demonstrate that
low socioeconomic conditions
are related to a multiplicity of dis-

8
Carlos Moreno-Jaimes / Laura Flamand
eases and other causes of death –chronic diseases,
communicable diseases, and injuries. Second, they
nd ample conrmation that socioeconomic inequal-
ities in mortality are signicantly evident for causes
of death that are highly preventable, such as lung
cancer and ischemic heart disease, but not for un-
known causes of fatal diseases such as brain cancer
and arrhythmias. Third, although the development of
new knowledge improves overall health conditions,
evidence indicates that it furthers the advantage of
people with higher socioeconomic status.1
What are the implications for health policy? If we
adhere to the theory of fundamental causes as a
basis to explain health inequality, we could derive
two main propositions. First, it should be obvious that
to reduce health inequalities it is necessary to less-
en social disparities in general. This implies that poli-
cies aimed at redistributing the resources in a society
might ultimately reduce the inequalities in the health
domain. Second, following Phelan and colleagues,
it is also clear that prioritizing the development of in-
terventions that do not entail the use of resources (or
that minimize their relevance) can reduce health in-
equalities. They recommend, for example, “providing
health screenings in schools, workplaces, and other
community settings, rather than only through private
physicians; providing health care to all citizens rather
than only to those with the requisite resources” (Phel-
an, Link, and Tehranifar, 2010, p. 37), and, in general,
to develop interventions that are affordable and may
be disseminated and implemented with ease. In this
article, we analyze the performance of one of the
most ambitious health reforms in the last decade in
Mexico, which aims to provide nancial protection to
those people lacking health insurance. We demon-
strate that such policy was relatively successful in re-
moving nancial obstacles to health care, one of the
key dimensions of health inequality, but also highlight
that it still has important shortages that call for a more
profound reform.
1 For example, Phel-
an, Link, and Tehran-
ifar (2010) cite the
work by Carpiano
and Kelly (2007),
which analyzed
changes in breast
cancer incidence
following a nding
by Women’s Health
Initiative that linked
hormone replace-
ment therapy to in-
creased breast can-
cer risk. They found
that breast cancer
incidence among
white women age
50 and older (they
were more likely to
have been using
hormone therapy
before the new nd-
ing were publicized)
dropped sharply,
while incidence
among black wom-
en in the same age
group remained in
stable levels. Anoth-
er study in support of
the theory of funda-
mental causes is a
work by Glied and
Lleras-Muney (2008),
who conducted
a systematic test
based on a com-
prehensive set of
diseases. They found
that more educated
people were the rst
to take advantage
of technological
advances that im-
prove health.

9
Towards health-care equality?
The performance of Seguro Popular in México (2003-2013)
THE KEY DIMENSIONS OF HEALTH INEQUALITY IN MÉXICO
Despite the fact that the right to health care was enacted in the na-
tional constitution since 1983, and notwithstanding that key health in-
dicators have considerably improved in the country throughout the
last decades (Levy and Schady, 2013), health inequality is a crucial
and persistent problem in Mexico. Access to health care services varies
dramatically across regions, social groups, and health care institutions,
and these differentials explain, to a large extent, why health condi-
tions in Mexico –measured through widespread health indicators such
as life expectancies, mortality and morbidity rates, or the incidence of
different type of diseases- are so terribly unequal. Consider, for exam-
ple, that a newborn in the state of Nuevo León (one of the wealthiest
and most modern states) is twice as likely to survive her rst year of life
than another infant born in the state of Puebla, among the ve poorest
states of Mexico (gure 1).
Figure 1 Infant mortality in the states of Mexico in 2013 (for every 1000 live births)
0 5 10 15 20
Infant mortality rate (for every 1000 live births)
Sources: Conapo, 2015; DGIS, 2000.

10
Carlos Moreno-Jaimes / Laura Flamand
These differentials are also manifest when analyzing the epidemiolog-
ical prole of the regions of Mexico, some of which still suffer the typical
illnesses of developing countries (infectious diseases, malnutrition, and
others related to childbirth), while others are increasingly exposed to the
afictions of the industrialized world (chronic diseases, addictions, acci-
dental injuries). In 2013, the rate of communicable, maternal, perinatal,
and nutritional diseases was around 54.3 cases for every 100,000 per-
sons, much lower than the rate of cardiovascular disorders, which is in
the order of 125.8 cases for every 100,000 persons. Obviously, this sharp
contrast between each type of diseases simply conrms the epidemi-
ological transition undergone by Mexico for several decades. Figure 2,
however, shows that the transition is heterogeneous across the territory
given that the highest rates of communicable, maternal, perinatal, and
nutritional diseases are prevalent in the most marginalized states.
Figure 2. Communicable, maternal, perinatal, and nutritional diseases, 2013 (by level of
marginalization in the states of Mexico)
45
49
53
57
61
65
High and very high Medium Low and very low
000,001 yreve rof sesaesid elbacinummoC
persons
Degree of social marginalizaon of the states
Source: Authors’ elaboration on the basis of DGIS, 2015
Even though it is reasonable to observe chronic illnesses (i.e. cardio-
vascular ailments or diabetes) in the wealthiest states, these illness-
es prevail in regions with high and very high levels of socioeconomic
deprivation as well (gure 3). These combined proles of disease im-
pose complex sanitary and nancial challenges for the most underpriv-
ileged states (Rivera et al., 2002).

11
Towards health-care equality?
The performance of Seguro Popular in México (2003-2013)
Figure 3. Cardiovascular diseases in 2013 (by level of marginalization in the states of
Mexico)
114
116
118
120
122
124
126
128
High and very high Medium Low and very low
000,001 yreve rof sesaesid ralucsavoidraC
snosrep
Degree of social marginalizaon of the states
Source: Authors’ elaboration on the basis of DGIS, 2015
As we discussed in the previous section, there is no single cause ca-
pable of explaining the high levels of health inequality in Mexico, but
there is empirical evidence in support of the fundamental cause theo-
ry. For example, under-ve mortality rates concentration indexes were
found to decrease as mother education increases, as access to rst-lev-
el health care facilities improves, and as the rates of house overcrowd-
ing diminished (Aguilera, Marrufo, and Montesinos, 2005). An important
implication of this nding is that all these factors can be inuenced by
policy interventions, although not exclusively by those carried out by
health authorities.
To what extent has public policy helped to mitigate the problem of
health inequality? Although the next section provides a more detailed
analysis addressing this question, rst, we discuss some general facts
about the health care system in Mexico, in particular, we underline that
its current organization fostered the unequal health conditions of the
population. In other words, the high inequality characterizing health
conditions in Mexico is analogous to the disparities observed in the or-
ganization and operation of the federal health care system.

12
Carlos Moreno-Jaimes / Laura Flamand
THE FRAGMENTED AND UNEQUAL HEALTH
CARE SYSTEM IN MEXICO
In Mexico, health care services are provided by three
types of institutions: 1) social security institutions that
provide health care services for the formal workers
(and their families) of the private and public sectors;
2) public institutions at the state level that provide
health care services for the uninsured (workers of the
informal sector and their families); and 3) health care
providers of the private sector, available to anyone
who can pay for their services. Nowadays, the unin-
sured comprises the vast majority of Mexico’s popula-
tion (in 2014, 70.1% reported lacking access to social
security services, as shown in table 1), since informality
is prevalent in the labor market. However, only 21.8%
lacks access to health services, most likely due to the
creation of Seguro Popular in 2004, a policy of nan-
cial protection in health for the uninsured that will be
discussed in the subsequent section.
TABLE 1. LACK OF ACCESS TO SOCIAL SECURITY
AND HEALTH CARE SERVICES IN MEXICO
(MILLIONS OF PEOPLE), 2000-2014
Year 2000 2012 2014
Deprivation due to access
to social security 69.6
(60.7%) 71.8
(61.2%) 70.1
(58.5%)
Deprivation due to access
to health care services 33.5
(29.2%) 25.3
(21.5%) 21.8
(18.2%)
Source: CONEVAL, 2014
Despite the fact that only a minority of Mexicans is
entitled to receive the benets of social security institu-
tions (including health care), it has historically received
preferential treatment from the government. In 1994,
the government expenditure on health was, on aver-
age, 3,039 pesos for each person covered by social
security, while only 820 pesos for the uninsured. That is,
more than 80% of public nancial resources for health
were allocated to formal workers and their families,
while informal, unprotected workers and their depen-
dents received only 20% of such funding (see table 2).

13
Towards health-care equality?
The performance of Seguro Popular in México (2003-2013)
This severe imbalance however, has been gradually rectied through-
out time due to the implementation of Seguro Popular, and the asso-
ciated reforms to the health sector in 2004. In 2013, for example, 55%
of public spending on health was targeted to people with social se-
curity, while the uninsured received only 45%. The resource disparities
between the two groups are also present in the allocation of human
resources, but they have been addressed as well in recent times. The
number of medical consultations in the institutions serving the uninsured
has grown very rapidly since 1994, and nowadays the gure is even
larger compared to that of social security institutions (table 2).
TABLE 2. RESOURCES AND PERFORMANCE A COMPARISON
BETWEEN THE INSTITUTIONS SERVING THE INSURED AND THE
UNINSURED IN MEXICO, 1994-2014
Year General government expen-
diture on health per capitab)
Total human re-
sources in the pub-
lic health sector
Number of medical
consultations
(% of total government ex-
penditure on health) For every 100,000 people
With
social
security
Without
social
security
Total With
social
security
Without
social
security
With
social
security
Without
social
security
1994 3 039.2 820.3 1 988.6 606.7 422 1 601.7 913.1
(80.5) (19.5) (100)
2000 2 950.4 1 367.9 2 145.4 595.7 437.6 1 576.7 1 365.6
(67.6) (32.4) (100)
2006 3 880.9 2 101.7 2 902.3 581.7 491.6 1 511.3 1 796.1
(60.2) (39.8) (100)
2009 4 143.4 2 827.3 3 420.7 604.3 520.5 1 611.1 1 738.5
(54.6) (45.4) (100)
2013 5 523.9 3 545.5 4 429.0 672.0* 644.8* 1 648.3 1 745.0
(55.7) (44.3) (100)
Note: * data from 2014
Source: Authors’ elaboration on the basis of DGIS, 2000, 2006 and 2012
Do these gures imply that the services of Seguro are performing bet-
ter than the social security ones? We strongly doubt it, considering that
social security beneciaries are still advantaged in terms of nancial re-
sources and staff when compared with those uninsured. In other terms,
it is most likely that the health care facilities for the uninsured population
are facing congestion problems.

14
Carlos Moreno-Jaimes / Laura Flamand
Expectedly, the beneciaries of social security tend
to have better health outcomes than the uninsured.
Throughout the last 12 years, both infant and mater-
nal mortality rates have been lower for people with
social security than for the uninsured, although it
seems that the indicators for the two groups are con-
verging (table 3).
TABLE 3. HEALTH OUTCOMES
(LAST YEAR OF PRESIDENTIAL TERM)
Year Infant mortality1,a Maternal mortality2,a,b
Without
social security With
social security Without
social security With
social security
2000 16.2 10.9 44.5 20.8
2006 11.5 9.8 30.2 15.6
2012 9.9 9.6 24.3 18.4
1 Infant deaths (under 5) per 1,000 live births.
2 Maternal deaths per 100,000 attended births.
a Population without social security includes: SS and IMSS-Opor-
tunidades. Population with social security includes: IMSS, ISSSTE,
PEMEX, SEDENA y SEMAR.
b The information for the year 2000 was foudn under the label
pregnancy, birth and puerperium mortality; for the rest of the
years, under the label maternal mortality.
Source: Calculated by the authors with information from DGIS,
2000, 2006 and 2012
Notwithstanding the terrible inequalities and chal-
lenges of its health care sector, Mexico is one of the
countries in Latin America with the lowest levels of
health care expenditure. Mexico spends in health
(6.2% of GDP) considerably less than Brazil (9.7), Chile
(7.7) or even Argentina (7.3), see table 4. From 2000
to 2013, however, the total health spending in Mex-
ico grew by 1.1 percent of GDP, mainly due to the
increase in the government budget for health, the
share in the total health care expenditure rose from
46.6 to 51.7 percent. As we will discuss later on, this
increase was due to the creation of Seguro Popular
in 2004, which implied larger government health ex-
penditure for the uninsured.

15
Towards health-care equality?
The performance of Seguro Popular in México (2003-2013)
TABLE 4. HEALTH EXPENDITURE IN SELECTED
LATIN AMERICAN COUNTRIES, 2000-2013
Country Total expenditure on
health as a percent-
age of GDP
Genera government
expenditure on health
as a percentage of total
expenditure on health
Out-of-pocket
expenditure as a
percentage of total
expenditure on health
2000 2012 2013 2000 2012 2013 2000 2012 2013
Argentina 7.6 6.8 7.3 53.9 69.3 67.7 29 20.1 21.1
Brazil 7.2 9.5 9.7 40.3 47.5 48.2 38 30.3 29.9
Chile 7.2 7.3 7.7 36.1 47.7 47.4 41.9 32.4 31.7
Mexico 5.1 6.1 6.2 46.6 51.8 51.7 50.9 44.1 44.1
Source: WHO, 2015
A feature of health expenditure in Mexico meriting
special attention is the extremely high level of out-of-
pocket expenditure (44.1 percent of the total), more
than 12 percent higher than in Chile or Brazil, and 23
percent more than in Argentina. The result is stunning
because out-of-pocket expenses represent all direct
outlays that households pay to private health-care
providers every time they request services. This high
proportion implies people are very likely to incur in
catastrophic expenditures, which in turn may push
them into poverty. Therefore, the World Health Or-
ganization regards out-of-pocket expenses as an in-
efcient and unfair method to nance health care,
since it violates the principle of nancial justice, which
states that individuals should contribute to the nanc-
ing of their health care according to their payment
capacity, and they should receive services accord-
ing to their health needs (WHO, 2015). The enormous
share of out-of-pocket expenses2 in Mexico was the
principal reason for the creation of Seguro Popular in
the mid-2000. We will discuss the operation and per-
formance of this initiative in the following section.
2 In 2006, the larg-
est component of
out-of-pocket ex-
penditures was the
purchase of medi-
cines, 66 percent of
the total (Wirtz et al.,
2012).

16
Carlos Moreno-Jaimes / Laura Flamand
A LONGITUDINAL ANALYSIS
OF THE PERFORMANCE
OF SEGURO POPULAR
Seguro Popular is a social protection health policy
created by the federal government of Mexico in 2003
to provide nancial protection to people without
access to social security –more than half of its total
population. By the time the policy was initiated,3 60
percent of the total health expenditure of the coun-
try was private, mainly from out-of-pocket payments.
This situation was deemed socially unacceptable for
the reasons discussed in the previous section, thus,
a paramount objective of the new policy was to re-
duce the proportion of this type of expenses, espe-
cially for its target population, the uninsured.
FUNDING AND SERVICE PROVISION UN-
DER THE NEW SYSTEM
Probably, the main innovation of Seguro Popular is its
nancial mechanism. Contrary to the approach dom-
inant before its creation, Seguro Popular allocates re-
sources depending on the demand for health care
services –not in proportion to the supply of services,
as it used to be in the past, where resources were
transferred to states according, mostly, to the pres-
ence of health infrastructure (Moreno, 2005).
In order to halt the nancial inequities across re-
gions and social groups (primarily between people
with and without social security) created by the prior
system, it was determined that the funds were to be
allocated on the basis of the number of afliates per
state. The funding of Seguro Popular is composed of
three sources: the federal government (83 percent of
the total), state governments, and the beneciaries
who were supposed to contribute proportionately to
their income –the poorest are exempted from any
charge.4 It is important to reiterate, however, that
the amount of resources allocated to each state is
completely determined by the number of individuals
afliated. As shown in Table 5, the number of insured
3 The Mexican Con-
gress reformed the
General Health Act
(Ley General de Sa-
lud) in 2003 to cre-
ate the Sistema de
Protección Social
en Salud (System of
Social Protection in
Health), although it
is commonly known
as Seguro Popular.
For a comprehen-
sive description of
the principles of the
reform and its main
components see
the work by Gonza-
lez-Pier et al. (2006).
4 As a matter of fact,
beneciaries do not
contribute to fund
the system, although
these contributions
were part of the
original design of
the program Gonza-
lez-Pier et al. (2006).

17
Towards health-care equality?
The performance of Seguro Popular in México (2003-2013)
people, as reported by government sources, grew at
an extremely fast rate throughout the 2004-2013 peri-
od, i.e. 55 million people were covered by 2013. Nat-
urally, the nancial resources budgeted for Seguro
Popular have also increased, mostly at a similar rate
than coverage.
The nancial mechanism under Seguro Popular
attempted to provide all uninsured people with a
publicly funded health insurance covering a set of
health care interventions and medicines as per the
Universal Health Services Catalogue (Catálogo Uni-
versal de Servicios de Salud or CAUSES), as well as a
package of expensive interventions that may result in
catastrophic expenses. These high cost interventions
were nanced under a trust fund denominated Fund
for Protection against Catastrophic Expenditures
(Fondo de Protección contra Gastos Catastrócos,
or FPGC). The result is that the beneciaries of Seguro
Popular do not to disburse any payment when visiting
a medical facility or receiving any treatment.
TABLE 5. NUMBER OF PEOPLE INSURED AND
SPENDING SEGURO POPULAR, 2004-2012
Year Number of people insured
Spending
(million pesos, current
prices)
2004 5,318,289 3,462.80
2005 11,404,861 6,382.50
2006 15,672,374 12,170.40
2007 21,834,619 18,864.30
2008 27,176,914 24,915.60
2009 31,132,949 31,275.30
2010 43,518,719 37,029.50
2011 49,178,366 45,165.80
2012 52,900,000 63,129.60
2013 55,637,999 66,922.30
Sources: Ofce of the Presidency, 2011 and SPSS, 2014.
The provision of heath care services continues un-
der the responsibility of state governments, along the
lines of the decentralization of health services set by
the federal government during the 1980s and 1990s.

18
Carlos Moreno-Jaimes / Laura Flamand
The new policy created government agencies at the state-level: the
state regimes of social protection in health (Regímenes Estatales de
Protección Social en Salud or REPSS) in each of the 32 Mexican states.
The most important function of REPPS is to manage the nancial re-
sources of Seguro Popular, and also to guarantee the provision of ef-
fective and high-quality health care services to afliates in each state.
In other words, the REPSS were established to oversee that the right to
health care for all afliates is effectively protected.
Given our claim that inequality is one of the fundamental public policy
problems for health care protection in Mexico, it is worthy to investigate
whether Seguro Popular has ameliorated the disparities among people
and regions. Therefore, in the following sections, we analyze the per-
formance of the program along its key dimensions. That is, we explore
whether Seguro Popular has contributed to (a) diminishing the historical
nancial imbalances between the two subsystems, as well as between
regions; (b) reducing health-related out-of-pocket and catastrophic ex-
penses, and (c) guaranteeing access to effective health care services
provided under reasonable quality standards to all beneciaries.
DIMINISHING FINANCIAL IMBALANCES
We have previously shown that social security institutions and its ben-
eciaries have, for many years, received preferential treatment from
the government, as the lion’s share of public spending was targeted
to them. The creation of Seguro Popular, however, has implied that
the funds devoted by the government to the health care of the unin-
sured have increased dramatically. As table 2 illustrates, this has turned
into a more balanced situation for both groups. In addition, the nan-
cial disparities have diminished between regions, since the difference
between the state receiving the highest level of federal spending on
health (per capita) and the state receiving the lowest was halved in
the 2000-2010. The level of variability in the contribution of states to the
health sector nances has diminished as well, even though such contri-
bution represents no more than 17% of total public resources (see table
6 for additional details).
REDUCING OUT-OF-POCKET AND CATASTROPHIC
EXPENDITURES
According to the OECD, out-of-pocket expenses as a share of total
health expenditure in Mexico fell from 52.9 percent in 2004, to 49 per-
cent in 2011. Is it possible to attribute this reduction to the implemen-
tation of Seguro Popular? There is mounting evidence suggesting it is
indeed likely.

19
Towards health-care equality?
The performance of Seguro Popular in México (2003-2013)
After analyzing data from the 2012 National Survey
on Health and Nutrition, Avila and colleagues (2013)
conclude that the program has reduced out-of-
pocket expenses, but that reductions vary depend-
ing on the socioeconomic conditions of households
(the effect is lower among the most vulnerable fami-
lies), and across regions (there seems to be no effect
on rural areas). Also, other studies have demonstrat-
ed that Seguro Popular has diminished health-relat-
ed catastrophic expenses5, both in rural and urban
zones. This nding, however, does not hold in situa-
tions where the beneciaries only have access to fa-
cilities with insufcient and low-quality medical staff
(Grogger et al., 2014).
Finally, a work by Wirtz et al. (2012) focuses on the ef-
fect of Seguro Popular on out-of-pocket expenses for
medicines, which in Mexico accounts for 5 percent of
a household disposable income. Wirtz and coauthors
nd that afliation to the program does not have any
signicant effect on the percentage of medicines ex-
penditure out of total disposable income in compari-
son to households without health insurance. They offer
two potential, though not necessarily rival, explana-
tions to the fact that people insured by Seguro Popular
continue incurring in out-of-pocket expenses for med-
ications: (a) that the drugs included in the package
of interventions (Causes) do not match the clinical
needs of the households, and (b) that there is short-
age of medicines in the facilities at which they consult.
TABLE 6. EVOLUTION OF FINANCIAL IMBALANCES
IN THE HEALTH SECTOR MEXICO 2000–2010
Dimension Indicator 2000 2004 2010
Level Health expenditure as percentage of GDP 5·1% 6·0% 6·3%
Source Out-of-pocket health expenditure as percentage
of total health expenditure
50·9% 51·7% 47·1%
Distribution Ratio of per-person public expenditure between
those covered by social security agencies and
those without social security
2·1 to
1·0
2·1 to
1·0
1·2 to
1·0
Distribution Ratio of federal per-head expenditure on health in
the state with the highest gure to that in the lowest
6·1 to
1·0
4·3 to
1·0
3·0 to
1·0
State contri-
bution
Variability in state contribution to health-care
nancing (coefcient of variation)
1·0 0·8 0·7
Allocation
of funds
Percentage of Ministry of Health budget devoted
to investment
3·3% 3·1% 4·4%
Source: Knaul et al. (2013: 9).
5 Health-related cat-
astrophic expenses
are those represent-
ing 30 percent or
more of the income
of a household dis-
counting food ex-
penses. In addition,
“impoverishing”
health expenses are
those which, regard-
less of their magni-
tude, push a family
below the ofcial
poverty line (Frenk
and Gómez Dantés,
2008: 63).

20
Carlos Moreno-Jaimes / Laura Flamand
Murayama-Rendón (2011) provides evidence show-
ing that, even though the program established an up-
per limit of 30% for the purchase of medicines, in 2009
it only spent 15% of its total resources for that purpose.
Furthermore, the same study discovered that 47 per-
cent of the total purchases of medications completed
by Seguro Popular are far beyond the maximum price
limits set by the federal operator of the program, which
clearly points to a fairly inefcient nancial manage-
ment at the state level (Flamand and Moreno, 2014,
chapters VI and VII).
GUARANTEEING EFFECTIVE ACCESS
TO HEALTH SERVICES
The increase in the number of afliates to Seguro Pop-
ular is, denitely, one of its main accomplishments,
even though, as we showed before, in 2014 there
were still 21.8% of people who reported not having
any type of access to health services.6 Beyond formal
access, however, an important question is to what
extent are afliates actually using the health care ser-
vices covered under the policy.
The evidence on this issue is quite positive. For ex-
ample, a study by Scott (2005), one of the rst ex-
ternal evaluations of Seguro Popular, demonstrates
that, from the very initial stages of the policy, afliates
had higher rates of service use compared to peo-
ple without any other health insurance, regardless of
their income levels. Gakidou and associates (2007)
also nd that afliates have increased utilization rates
of health care services, but particularly among those
with greater health needs, residing in the less devel-
oped states, and of the lowest income levels.
On a similar vein, Sosa and colleagues (2009) show
that Seguro Popular promotes health care service
utilization among people with diabetes, and it also
boosts hospitalization for obstetric services. A recent
piece by Leyva-Flores et al. (2014) focuses on primary
health care utilization by indigenous people. Based
on quasi-experimental methods, they nd that Se-
guro Popular offsets the barriers preventing the use
of primary health care services by indigenous and
6 It is important to
observe that there
are signicant differ-
ences in the number
of afliates reported
by different sources.
A likely explanation
for these discrepan-
cies is that the enrol-
ment process run by
the states incorrect-
ly registers people
who are already so-
cial security bene-
ciaries.

21
Towards health-care equality?
The performance of Seguro Popular in México (2003-2013)
non-indigenous in similar socioeconomic conditions,
which suggests that “it is not being indigenous per se,
but rather the lack of nancial assurance for access-
ing health care, that hinders primary health care utili-
zation” (Leyva-Flores et al, 2004: 4). The effectiveness
of the policy on service use has, naturally, rendered
positive results on health outcomes. In a recent arti-
cle, Pfutze (2014) demonstrates that Seguro Popular
had a large and signicantly negative effect on in-
fant mortality. In his words, “the risk of a child dying
in the rst month of life is reduced by close to 5 out
of 1,000 (or 0.5%) for the population at large and by
around 7 out of 1,000 (0.7%) for the program target
population” (Pfutze, 2014: 485).
PROVIDING HEALTH CARE UNDER REASO-
NABLE QUALITY STANDARDS
Despite the fact that Seguro Popular has clearly
abated the nancial imbalances of the health sec-
tor in Mexico, and no matter its positive results on
afliation, service utilization, and out-of-pocket and
catastrophic expenses reduction, it still has important
shortcomings in the quality of service provided.
Recall that the delivery of health-care services
covered by Seguro Popular is the responsibility of 32
state-level health-care systems, and that the man-
agement of nancial resources and service delivery
coordination is controlled by 32 different agencies
(the REPSS) that are mandated to act on behalf of
afliates.
It is crucial to note, however, that the health sys-
tems in the states are rather heterogeneous in their
capacities and performance. For example, in Fla-
mand and Moreno (2014), we show that state health
systems in Mexico present massive discrepancies in
the manner in which they accomplish essential pub-
lic health functions such as monitoring the health
status of people, developing policies to support indi-
vidual and community health efforts, enforcing laws
and regulations to protect health, and many others.7
In addition, there are also important variations across
the state-run health systems regarding the specic im-
7 A list of 10 essential
public health ser-
vices are proposed
by National Public
Health Performance
Standards Program,
2013

22
Carlos Moreno-Jaimes / Laura Flamand
plementation of Seguro Popular. We found, for example, that not every
state has invested the same effort in obtaining quality accreditation for
state-run clinics (a crucial requirement to receive nancial support from
Seguro Popular), and that the number of “medical adjusters” (health
care agents responsible of guarding the interests of the beneciaries of
Seguro Popular) varies signicantly across the 32 states: while the state of
Baja California Sur reports 6.2 medical guardians for every 100,000 per-
sons, the gure for Querétaro barely reaches 0.2.
TOWARDS HEALTH CARE EQUALITY WITH A
UNIVERSAL SYSTEM?
The basic elements of a system of a universal social protection dis-
cussed during the presidential campaign of Enrique Peña Nieto (2012-
2018) were health, life and unemployment insurance, as well as a guar-
antee for minimum income and a pension for retirement. These must
be funded with general tax revenues instead of payroll contributions
(CEEY, 2012). Beyond the campaign trail, the government of Peña Ni-
eto committed to the creation of a truly universal social protection sys-
tem, and of the universal health care system in the National Plan for
Development 2013-2018.
Health protection is meant to secure the health of a population from
birth through old age. In a universal system, health care must include
maternity care and preventive services, quality must be guaranteed
by law, and services should be available when and where needed.
Health care must be affordable and people need to be nancially
protected against associated costs such as payments for services re-
ceived, transportation and economic loss experienced due to reduc-
tions in earnings.
In this section, we describe the most prominent health policy initia-
tives promoted by President Peña Nieto in the 2012-2015 period to sug-
gest that they are not denite stepping-stones towards universalism,
but mostly fragmented efforts reinforcing the two-tier inequality of the
health protection offered in Mexico through social security and social
assistance.
Historically, as we discussed in the rst section of the article, the cov-
erage, generosity and quality of the services and goods provided by
each subsystem have been highly unequal favoring social security ben-
eciaries. For example, note that while the health services provided by
the social security subsystem cover only 61% of the total population, they
disburse almost 80% of the total public health expenditure (gure 4).
In general, regarding social assistance to those uninsured, of the three
social programs with the largest budgets two do not have a structure

23
Towards health-care equality?
The performance of Seguro Popular in México (2003-2013)
tending to universality.8 As discussed below, Seguro
Popular targeted the poor predominantly and now
gives access to fewer or lower quality services than
social security, thus, they may not be associated to a
transition to a universalistic structure of the social pro-
tection system (Martínez-Franzoni and Sánchez-An-
cochea, 2014, pp. 16-17).
Figure 4. Public health care in México 2013 (% of coverage and
of expenditure)
SEGURO
POPULAR
SOCIAL
SECURITY
Expenditure (%)
20.5
39
79.5
61
61.9
51
12.7
9.2
2.9
0.4
2
0.4
People covered (%)
IMSS ISSSTE PEMEX ISSFAM
In a rather stimulating working paper, Martínez Fran-
zoni and Sánchez Ancochea (2012) summarize the
reasons why universalism is both important and supe-
rior to means-tested interventions; here I only list the
reasons. Universal policies can be more redistributive
towards the poor than means testing, they do not
create stigma, they are easier to manage, and they
may have powerful and positive macro-social im-
pacts. For example, universal policies tend to create
cross class coalitions favoring social cohesion, which
then thrusts for the expansion of public spending and
the improvement of service quality.9
From the mid-1990s to date, several countries in Lat-
in America have introduced a variety of programs,
including noncontributory pensions and health insur-
ance, and cash transfers targeted to the poor. Levy
and Schady (2013) consider that these policies have
8 Of the total budget
devoted to social de-
velopment, in 2013,
Oportunidades/Pros-
pera received 3.94%,
Seguro Popular 3.44%
and Pensions for Old
Age 1.49% (Ofce of
the Presidency 2014).
9 There are several
pieces of research
stressing the virtues
of universalism, for
example, Holzmann
and Hinz (2005) and
Gill et al. (2005).
For a detailed ex-
planation of each
advantage and fur-
ther examples, see
Martínez-Franzoni
and Sánchez-An-
cochea (2012), pp.
8-15.

24
Carlos Moreno-Jaimes / Laura Flamand
resulted in considerable improve-
ments in the well-being of the poor
in Latin America. In Mexico, these
programs are associated with sev-
eral positive outcomes: for exam-
ple, Seguro Popular decreased
the catastrophic health expendi-
ture of the afliated families by 23
percent (King et al. 2009) while 70
y más reduced the poverty gap
among recipients from 0.61 to
0.46 (Galiani and Gertler 2009)
These noncontributory programs
raise various concerns, as they are
expensive, face mounting pres-
sures for increases in coverage
and benets (given that these
and contributions are not directly
linked), and may also discourage
formal employment (Levy and
Schady 2013, Bosch and Cam-
pos-Vazquez 2014). Overall, the
fragmentation of social security re-
duces the overall efcacy of insur-
ance, diminishes domestic savings,
and misallocates resources with
rather negative impacts on pro-
ductivity and growth. Furthermore,
according to Scott (2005b), pro-
grams are subject to the political
decisions and priorities of the gov-
ernment in ofce, and are limited
by the yearly budget allocations.
As a consequence, Levy and
Schady (2013) suggest to reform
social protection such that policies
(a) pay closer attention to the qual-
ity of services, (b) strive for a more
balanced distribution of benets,
and (c) move towards sustainable
sources of nance, particularly,
emphasizing the link between con-
tributions and benets.
To sum up, in general, govern-
ments have three policy instru-
ments at their disposal for social
protection: social assistance, social
insurance, and universal policies. In
addition to the clear advantages
of universalism discussed previous-
ly, in the Mexican case it has been
showed that social insurance is
highly regressive (Scott 2005a y
2005b), and thus exacerbates in-
equality in a country plagued with
acute economic and social dis-
parities (Esquivel, 2015).
Are the initiatives promoted by
EPN (2012-2015) enhancing the
universalistic structure of the so-
cial protection system? To start
with, several works have sketched
the nature of the social assis-
tance interventions capable of
promoting a universalistic struc-
ture. In favor, they point towards
program interlinked to universal
health-care and education; in
opposition, to interventions tar-
geted to the poor exclusively or
giving access to fewer of lower
quality services (Martínez-Franzoni
and Sánchez-Ancochea 2014, p.
18). The government of EPN has
not progressed in this component
despite having promised to do
so in the planning documents of
the administration. The National
Development Plan (2013-2018)
announced that a legislative bill
would be submitted to Congress
for creating the Universal Nation-
al Health System; the bill has not
been presented to the Congress
to this date.
The current popular insurance
program (Seguro Popular) has

25
Towards health-care equality?
The performance of Seguro Popular in México (2003-2013)
been in place since 2003 and
does not show a structure leading
to universalism: it mainly serves the
poor, and it offers both a restrict-
ed and lower quality package of
services than the health services
offered by social security (Fla-
mand and Moreno, 2015). Appar-
ently, the government is carrying
out the preparatory work essential
for the reform.
The Health Undersecretary in of-
ce, Eduardo González Pier, stat-
ed that the aim of the government
of EPN is to transform the current
organization of the system in prac-
tice given that legal or budget-
ary changes would be worthless
without appropriate instruments
for the provision of services (infra-
structure, management practices
and human resources). Thus, the
keystones for health system reform
are, according to González Pier,
administrative, labor and nancial
agreements among the different
health providers.
The government of the Federal
District refused to sign the agree-
ment needed for the implemen-
tation of Seguro Popular in the city
for three years (2003-2006). The lo-
cal Minister of Health, a leading
public health scholar, argued that
Seguro worked against the univer-
salization of health services that
her administration was promoting.
The federal program implied such
a large subsidy for the City that the
local government nally balked
and now tries to coordinate the
actions of both programs.
CONCLUSIONS
The main purpose of this article is
to evaluate the performance of
Seguro Popular after more than
10 years in operation. In the rst
section of the article, we dened
health inequality and emphasized
that socioeconomic status and
social support are fundamental
causes of disease. This opens the
door for government intervention
in health beyond direct medical
attention, as a network of social
support operated or regulated
by the government may improve
socioeconomic status (e.g. with
education, training or subsidies).
Then we carefully described the
fragmented health care sys-
tem in Mexico and illustrated the
profound and expansive health
inequalities present in two di-
mensions: rst, the differences be-
tween the population protected
by social security and those un-
insured, and, second, across the
states.
The health arena in Mexico
proves to be highly unequal in
terms of conditions, nancing,
access and quality. The article re-
veals that Mexico spends a rather
low share of its PIB in health even
in comparison with other Latin
American countries and that a
primary source of inequality is the
large share of out-of-pocket ex-
penditures (44%).
In the face of this rampant in-
equality in the health sector, es-
pecially for those uninsured, the
Mexican government launched
Seguro Popular in 2003 in an at-

26
Carlos Moreno-Jaimes / Laura Flamand
tempt to offer nancial protection
in health, better access and quali-
ty services to the 55 million of Mex-
icans with no health insurance. It
is crucial to note that the imple-
mentation of Seguro Popular con-
fronted the particular challenge
of nancing services to be pro-
vided in a decentralized context,
given that state governments are
responsible for offering health ser-
vices to the uninsured population
since the mid-1980s.
In the second section we an-
alyzed the performance Seguro
Popular with the most recent
data and studies available along
four dimensions: nancial imbal-
ances between subsystems, out-
of-pocket and catastrophic ex-
penses, access to effective health
care under reasonable quality
standards.
Diminishing historical nancial
imbalances. The inequality be-
tween the two subsystems in terms
of expenditure has diminished no-
ticeably. The share of the total
government expenditure for the
uninsured has increased from 39.8
to 44.3% in the 2006-2013 period.
In addition, the difference in trans-
ferred resources to the state re-
ceiving the highest level of federal
spending on health (per capita)
and the state receiving the lowest
diminished by half between 2000
and 2010.
Reducing health-related out-
of-pocket and catastrophic ex-
penses. We present mounting ev-
idence that Seguro Popular has
reduced out-of-pocket payments
as a share of total health expendi-
ture in Mexico (from 52.9% in 2004
to 49% in 2011). Purchasing med-
ications, however, continues to
be an important source of out of
pocket expenditures for afliated
families pointing to the need of re-
viewing purchasing practices and
reforming the nancial manage-
ment of the funds transferred to
the state governments via Seguro
Popular.
Guaranteeing access to effec-
tive health care services. It is clear
that the per capita nancial trans-
fer to state governments for each
new afliate to Seguro Popular
as an incentive for increasing the
coverage of the intervention has
been a resounding success, i.e.
state governments afliated 55.6
million people during 10 years of
operation (2003-2013).
In 2014, however, there were
still 21.8% of people reporting no
access to health services which
points to an overlap of social se-
curity beneciaries and Seguro
Popular afliates. A complemen-
tary explanation may be the fact
that when health care facilities
are of low quality, understaffed or
located far away from the place
of residence of the interview-
ee, he tends to report having no
health care protection.
A quite attractive positive effect
of Seguro Popular is related to
the utilization of heath care ser-
vices. We reported several studies
showing that afliates have high-
er utilization rates of health care
services than the control groups,
in particular, people with greater
health needs, residing in the less

27
Towards health-care equality?
The performance of Seguro Popular in México (2003-2013)
developed states, and with the
lowest levels of income.
Despite the fact that Seguro Pop-
ular has clearly abated the nan-
cial imbalances of the health sec-
tor in Mexico, its positive results on
afliation, service utilization, and
out-of-pocket and catastrophic
expenses reduction, it still has im-
portant shortcomings in the quality
of service provided. We suggest
that given the new and substan-
tial inux of federal funding to the
services provided by the state
governments, the latter have to
be subjected to a higher standard
regarding access and quality. This
higher standard may be achieved
through a combination of transfers
dependent on reaching specic
quality indicators, and vigorous cit-
izen oversight.
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Ávila-Burgos, L., Serván-Mori, E.,
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Salinas-Rodríguez, A. (2013).
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Carpiano, R., and Kelly, B. (2007).
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32
Vol. 1 No. 2 December 2015
UNIVERSALIST REFORM OF THE
HEALTH SYSTEMS IN MEXICO
AND CHILE. A CHANGE OF TIME
OR HISTORICAL INERTIA? *
Carlos E. Barba Solano**
INTRODUCTION
Fernando Filgueira has recently noted (Filgueira, 2013) that in Latin
America we are reaching the nal stage of broad era of conservative
modernization1 that has included three phases: the exporter oligarchic
capitalism of the 19th century, the industrialization by imports substitu-
tion (IIS) stage and the phase of economical liberalization that begun
in the 1980’s. According to him, in this last phase, it was proposed a
new way for modernization that drastically limited the role of the State
in the economy, promoted opening of markets and limited the range
of social policies compatible with the new project, but it did not solve
the inclusion decit that characterized the previous stages (Filgueira,
2013: 19-20).
In his opinion, this long process is concluding due to the neoliberal
project success in three aspects: the consolidation of an electoral de-
mocracy, the increase of population’s educational qualications and
society’s exposure to new and wide consumption patterns. These three
factors, he says, have mined the political bases of conservative mod-
ernization because they generated a revolution of expectations that
cannot be fullled, because the liberal reform did not get sustained
economic growth nor wealth redistribution, nor a wide social access
to different markets. Therefore, in today’s current democratic context,
political and economic elites would lack of sufcient tools to untie the
region’s stratied bondages. 2 (Filgueira, 2013: 18-25).
1 Following Barrington Moore (1966), Filgueira notes that this kind of modernization´s characterized
by the action of elites driving the modernization of their countries trying to keep stratied privileges
untouched inherited from pre-industrial pre-modern stages. (Filgueira, 2013: 20).
2 Filgueira points out that “elites… will be part of the new process, but they will from positions of
power that rely on competitive electoral alternatives in a mass democracy (Filgueira, 2013: 18)
* This article contains several elements of a priorly published chapter in 2013 (Barba, 2013) and a
lecture in 2015 (Barba y Valencia, 2015).
** Research Professor, University of Guadalajara (U de G), Mexico. U de G Social Sciences Doctor-
ship coordinator. Member of the CLACSO’s “Poverty and Social Policies” work team and member
of the National System of Researchers (SNI) of Mexico, level III. E-mail: carlosbarba66@gmail.com.

33
Universalist reform of the health systems in Mexico and Chile.
A change of time or historical inertia?
As a corollary of this thesis, Filgueira assures that “a
turn to the left” has been produced in our region,
that in the social scope is expressed as a change in
the orientation of its social policies and in the citizen-
ship conception. All of it as a consequence of the
extension of the State’s scal capacities, the estab-
lishment of wide programs of conditioned cash trans-
fers (CCTs), the appearance of care policies aimed
at reducing gender inequalities and a solidary turn
of insurance schemes in the elds of pensions and
health3 (Filgueira, 2013: 30-38).
In the scope of social policies, particularly in the
eld of health services we are interested in, the axis
of this transformation in Latin America would be the
emergence of a basic universalism in different ver-
sions4, that could crystallize into a universal benets
and basic transfers system, combined with an addi-
tional non-contributory pillar and/or a private assur-
ance to access goods and non-essential services (Fil-
gueira, 2013: 39-40).
With no doubt, Filgueira’s proposal is highly contro-
versial but serves in heuristic terms to analyze what
is happening in different types of social protection
systems in Latin America. In the specic case that
concerns us here, our interest is to analyze the scope
and limitations of reforms to health systems of Chile
and Mexico, which could be framed on the afore-
mentioned ‘epochal change’ hypothesis or could
contradict it. The specic interest covered by these
reforms is that both assume as a purpose to univer-
salize some segments of the public health services in
both countries.
To achieve this objective, the rst segment of this ar-
ticle will examine traditional patterns of health systems
in the region. The second will review the type of health
systems prevailing in Latin America. The third will ex-
amine the general characteristics of health reforms in
Latin America, political contexts and the main actors
in the reforms. The fourth will review the three reformist
waves that have been developing since the eighties.
The fth will analyze the health reforms in Chile and
Mexico. We will conclude with a nal reection on
the strength of the previously mentioned hypothesis
brought to the light of the two reforms.
3 In another article, I
have already done
a critique of this the-
sis using the Mexican
case to show that
the ‘left turn’ men-
tioned by that au-
thor does not apply
to the Mexican case
even though some
of its requirements
are met; it is recom-
mended to look for
Barba (2015).
4 That deviate from
an ideal model as
Filgueira, following
Pribble (2013), de-
ne as “full universal
coverage -exam-
ples: all families with
children, all seniors,
all the unemployed,
the entire popula-
tion with access to
health- based on
objective criteria
and sustained by
laws that support
basic rights, ade-
quate and homo-
geneous quality of
services and low or
no transfers strati-
cation and general
revenue nancing
-with a progressive
tax base- or tax
models whose archi-
tecture, combined
with the benets,
generate progres-
sive effects” (Filgue-
ira, 2013: 39-40).

34
Carlos E. Barba Solano
I. THE TRADITIONAL PATTERNS:
FRAGMENTATION AND INEQUITY
A common tendency in Latin America is to institu-
tionalize different protection mechanisms for formal
wage sector (insured through contributory schemes),
for higher-income sectors (insured through schemes
of voluntary and private afliation) and for vulnera-
ble sectors without access to other systems (through
the usage of public assistance for healthcare) (To-
bar, 2006: 284).
The social security often provide care for middle-in-
come strata, which appear as relatively privileged
compared to the rest of the population (Abel and
Lloyd-Sherlock, 2004: 808). The dominant pattern in
Latin America has been denominated “fragment-
ed pluralism,” a term that emphasizes heterogeneity
and inequity in the distribution of rights and the ac-
cess to health services for different segments of the
population. (Tobar, 2006: 284)
Therefore, while at one end of this model, some
citizens have access to innovative medical technol-
ogy; on the other, the poorer are doomed to low
quality services. This segmentation has been gener-
ating fragmentation and social inequality and since
the second half of the eighties it has worsened as a
result of the crisis in the formal labor markets, which
increased inequality within this model and severely
limited its expansion during the last two decades. (To-
bar, 2006: 284)
Furthermore, the segmental nature of these systems
results in diminishing returns of health investments. In
Latin America, traditional pluralist model is ineffective
because the quality and responsiveness of each sub-
system and each service are very heterogeneous.
As various authors highlight, this lack of efcacy is
expressed by the actual increase of diseases that
should have been eradicated5, eradicated diseases
that resurfaced6 and emerging diseases that chal-
lenge the capacity of national health systems and re-
veal the limitations of Global health schemes7 (Tobar,
2006: 285; Abel and Lloyd-Sherlock, 2004: 801, Franco
and Alvarez, 2009).
5 Such as malaria.
6 Such as tubercu-
losis.
7 Such as AIDS or
the H1N1 pandemic
inuenza.

35
Universalist reform of the health systems in Mexico and Chile.
A change of time or historical inertia?
However, although this structural trend has been
deployed throughout the region, not all systems
share the same characteristics, as indicated by the
classication of health systems proposed by Mesa-La-
go: unied systems, dual, tripartite and quadripartite
(Mesa-Lago, 2007)
II. TYPES OF HEALTH SYSTEMS IN
LATIN AMERICA
To paraphrase Mesa-Lago (2007), it could be said
that there is a predominance of three major types
of health systems in Latin America: unied, dual and
tripartite8. The rst type is characterized by having a
unied public health system; the second has many
variations but always includes a public segment and
a private one; while the third differentiates between
the public segment, the social security segment and
the private one (Mesa-Lago, 2007: Table 7.1).
A unied public system only exists in Cuba, one
quadripartite only in Colombia. Dual systems are in-
frequent these are the cases of Brazil, Chile, Costa
Rica, Haiti and Panama. The most common type is
the tripartite system, such as in Argentina, Bolivia, Do-
minican Republic, Ecuador, El Salvador, Guatemala,
Honduras, Mexico, Nicaragua, Paraguay, Peru and
Venezuela (Mesa-Lago, 2007: Table 7.1 ).
Mesa-Lago underlines that stratication does not
determine the degree of integration and coordina-
tion between the various systems. In his opinion, there
are only two cases where the degree of integration
and coordination is very high: Cuba and Costa Rica,
the rst unied, the second a dual system. Two cases
have achieved an average degree of integration:
Chile (a dual system) and Colombia (a quadripar-
tite system). In contrast, in the rest of Latin America,
systems are neither integrated nor coordinated (Me-
sa-Lago, 2007: Table 7.1).
This point of view may be tempered a bit consid-
ering that Brazil, after the 1988 reform, managed to
form a unied public health system, which signicant-
ly advanced their degree of integration (Barba and
Valencia, 2015).
8 Some are even
quadripartite, as in
the case of Colom-
bia.

36
Carlos E. Barba Solano
Stratication is not determinant in the coverage lev-
els that systems may achieve as Mesa-Lago (2007)
draws attention to, there are seven cases that be-
tween 2001 and 2004 had reached very high levels
of coverage: Cuba, which has an integrated system;
Brazil, Chile, Costa Rica that are dual; Argentina and
Mexico that are tripartite. In all those cases health
systems covered between 97 and 100% of the popu-
lation 9 (Mesa-Lago, 2007: Table 7.1).
Instead, coverage levels clearly appear to be close
related with the types of regional welfare regimes.
According to Barba (2003, 2007) and Filgueira (1998,
2004) ratings, all health systems with high levels of
coverage belong to Dual and Universalist regimes
(liberalized or not).
While virtually all health systems with medium or low
levels of coverage or those that do not generate re-
liable information, belong to the “exclusionary” wel-
fare regimes according to the ratings of Barba and
Filgueira or “informal family-orientated” according to
the classication of Martinez Franzoni (2008).
III. GENERAL CHARACTERISTICS,
CONTEXTS AND ACTORS OF
HEALTH REFORMS
Since the eighties in Latin America, there has been a
recognition of the need to reform health systems in
order to deal with enormous challenges derived from
demographic and epidemiological changes, but
also technical and nancial problems. These reforms
demand an approach that considers social, eco-
nomic and political aspects profoundly intricately in
this theme. In this task, the standpoint of social policy
can be very useful.10
Health sector reforms have been dened by the
Pan American Health Organization (PAHO) and the
World Health Organization (WHO) as “... a process that
aims to make substantive changes in the different health
institutions and the roles they play, to increase the equi-
table distribution of its benets, the efcient management
and meeting the health needs of the population. This pro-
9 Colombia and
Peru are two cases
where reliable data
indicates that cov-
erage is medium
and located in a
range of 67 to 84 %
of the population.
The remaining cases
are characterized
by low coverage or
lack of reliable indi-
cators (Mesa -Lago,
2007: Table 7.1).
10 The operation of
the health sector
clearly inuences
economic growth, in
developing the ca-
pacities of individ-
uals to participate
in the market, the
levels of welfare of
different social seg-
ments, the potential
for reducing social
disparity, addressing
poverty or respond
to social risks faced
by vulnerable sec-
tors of society .

37
Universalist reform of the health systems in Mexico and Chile.
A change of time or historical inertia?
cess is dynamic, complex and deliberate, is performed at a precise time frame
and is based on conditions that make it necessary and viable”11 (PAHO and
WHO, 2004: 3)
The development of reforms includes several stages; it is slow and
often involves the direction of governments across party lines. As we
have seen, in some cases the reforms are structural in nature, involve
legislative changes, affecting most of the functions of the health sys-
tem, alter the relationship between public and private actors; in others
they are very limited, concentrate on specic subsystems, or adminis-
trative changes such as management models (Infante et al., 2005: 15).
Types and paradigms of reforms
As noted in Table 1, these reforms can be classied as partial and incre-
mental and as structural or systemic.
TABLE 1. TYPES OF REFORMS IN TERMS OF ITS REACH
Partial or Incremental Structural or Systemic
• Do not require changes to exist-
ing institutions.
• Neither the creation of new ones.
• Its primary objective is to im-
prove functions of health systems
through relatively minor changes.
• Additional complex changes.
• More complex.
• Seek for a deep transformation of
existing systems.
• Try to reduce its segmentation.
• Generate new institutions.
Sources: Own elaboration from Lordoño and Frenk, 2000; World Bank, 2005 and La
Forgia, 2006.
According to these criteria, the reforms of the eighties decade tended
to be partial or incremental while those in the nineties and the ones
made since the year 2000 proposed structural changes.
According to Mesa-Lago (2007), the big difference between the re-
forms of the 90s and the most recent are paradigmatic. Latin-America
have uctuated between two opposing paradigms: reforms aimed to
liberalize12 health systems or seeking to universalize the right to health.
Table 2 describes these two extremes.
11 The translation is mine.
12 Liberalizing or Downsizing of Government, as shown in Table 2, is equivalent as to give to the
market a central role in the provision of welfare.

38
Carlos E. Barba Solano
TABLE 2. PARADIGMS OF REFORMS TO HEALTH SYSTEMS
The residual paradigm The universalist paradigm
a) Emphasizes market mechanisms
b) The expansion of the private sector
c) The competition between institutions
offering same services
d) Freedom of choice of beneciaries
e) Cost reduction
f) Efciency
g) Financial sustainability
h) Separation of functions
a) Search for universal coverage
b) Promotes equity
c) Guarantees social rights
d) Promotes community and social
participation
Source: Own elaboration from Mesa-Lago, 2007: 161-162.
According to PAHO and WHO recent reforms in the Latin-American
region have emphasized nancial, structural, institutional and adminis-
trative aspects, but have paid little attention to improving the services
provided by health systems or to the reduction of inequality in condi-
tions or access to health or even to strengthen management functions
or health authorities (PAHO and WHO, 2002 to 2004).
Another tendency has been to mix the two paradigmatic agendas.
For example, the issue of equity, along with the issue of decentralization
was crucial in Costa Rica and Brazil. While in Colombia there was a mix
between a universalist approach (social security, equity, solidarity, so-
cial participation) with a markets approach (competitiveness, efcien-
cy and freedom of choice) (Kaufman and Nelson, 2004).
CONTEXTS AND ACTORS
Moreover, reforms have been carried out in heterogeneous and com-
plex contexts. In some cases, they have been part of general reforms
processes of the State,13 in others have been important elements of
constitutional reforms.14 They are often included in the State’s processes
of modernization15 and at times they are the focus of the review of the
health system itself 16 (Infante et. al., 2000: 14; PAHO and WHO, 2004).
Political contexts and the main actors have also been divergent. For
example, the rst applied reform in Chile was impulsed by a military gov-
13 As it happened, for example, in Argentina, Chile and Colombia (PAHO and WHO, 2004: Table 3).
14 As in Argentina, Colombia and Ecuador (Infante et. al., 2000: 14).
15 This has been argued in Argentina, Chile, El Salvador, Jamaica, Mexico, Nicaragua, Panama,
Paraguay, Dominican Republic, Trinidad and Tobago and Uruguay (Infante et. al., 2000: 14).
16 As it has happened in Brazil, Costa Rica, Cuba, Dominican Republic and Mexico (PAHO and
WHO, 2004: Table 3).

39
Universalist reform of the health systems in Mexico and Chile.
A change of time or historical inertia?
ernment in an authoritarian manner, but when de-
mocracy was reestablished, an extensive debate led
to the approval and the creation of a universal health
access system with explicit guarantees (AUGE).
Overall, it can be stated that in the extreme part of
the market, powerful actors such as the International
World Bank (WB), the Inter-American Development
Bank (IDB) and the Monetary Fund (IMF), have sup-
ported and funded reforms looking for a larger com-
modication of health systems.
For example, a clear indicator of its inuence is that
between 1990 and 2003, loans from the IDB and the
World Bank to support reforms to health systems in-
creased from approximately 700 million dollars to
nearly 3,000 millions17 (Mesa-Lago, 2007: 61; PAHO
and WHO, 2004: Figure 1).
At the end of the universalization are located the
non-nancial multilateral international organiza-
tions such as WHO, PAHO and the International La-
bour Organization (ILO), as well as Health Ministries in
some countries and non-governmental organizations
(Ugalde and Homedes 2002; Lloyd-Sherlock 2004,
PAHO and WHO, 2004: 7).
Among the actors that support Universalist reforms,
those who oppose to liberal reforms and to the ex-
pansion of the private sector have gained relevance:
health professionals, hospital administrators, social
security employees and labor unions. This opposition
was crucial, for example, to modify the focus of the
reforms in Chile, which went from a commodication
perspective to another one that emphasizes equity
(Kaufman and Nelson, 2004).
THE CONTENTS OF THE REFORMS
The contents of the reforms are heterogeneous. They
highlight the following issues: guaranteeing the right
to health care in the Constitutions18; the creation of
basic packages for vulnerable populations; strength-
ening the steering role of the Ministries of Health19; the
separation of the provision of health services and the
nancing of the system; and the decentralization of
health services (Infante et al., 2000: 15-16.).
17 Homedes and
Ugalde argue that
at the end of the 80s
the World Bank had
become the inter-
national leader and
leading advocate
of neoliberal reforms
and became the
main international
player in the design
and implementation
of health policies
(2005: 83, 94).
18 Often without
this being translated
into specic laws.
19 Although the re-
sults in this area ap-
pear to be poor.

40
Carlos E. Barba Solano
THE IMPACT OF
REFORMS
Health systems reforms in Latin America have been
evaluated by the Pan-American Health Organization
(PAHO) and the World Health Organization (WHO) in
2004, and by Carmelo Mesa-Lago (2007). In the rst
case, the results tend to be descriptive and it con-
forms to the information provided by the Ministries
of Health; in the second case, it chooses to make a
comparison that does not seek to evaluate the ef-
fectiveness of the reforms but its impact on social se-
curity principles20 (Mesa-Lago, 2007: 165).
Two trends clearly identied by these evaluations
are developments in the eld of expanding the cov-
erage of basic services but no substantial progress
in the quality of services or the overall efciency of
health systems (Infante et. al. 2000 and 2005; Me-
sa-Lago 2005, 2007, PAHO and WHO, 2004).
However, there are a number of factors that hinder
this task, including the great heterogeneity of health
systems; the circumstances when reforms initiated;
models followed; and the lack of comparable statis-
tics (Mesa-Lago, 2005, 2007).
To address this complexity an alternative would be
to make comparisons between two or three reforms in
different countries. This strategy has allowed a proper
analysis of various aspects of the reform process21.
Precisely, this paper’s purpose is to analyze the re-
forms to health systems of Chile and Mexico aimed
to the extended universalization of the social right to
health. In Chile, these reforms led to the creation of
the program “Universal Access with Explicit Guaran-
tees in Health” (AUGE) and in Mexico led to the es-
tablishment of the “Seguro Popular” (SP).
20 These principles
are universal cov-
erage; consistent
quality of services
for all citizens; sol-
idarity, complete-
ness and sufciency
of the benets; uni-
ty, State responsibil-
ity, efciency and
social participation
in management:
nancial sustain-
ability, promotion of
savings and capital
markets. (Mesa-La-
go, 2007:5-24)
21 These include
comparisons of polit-
ical factors involved
in the feasibility of
health reforms, the
similarities and dif-
ferences between
reforms of social se-
curity and the ones
of the health sector.
Also the privatiza-
tion and decentral-
ization processes in
different countries;
the trans-national-
ization processes
arising from the ap-
plication of man-
agement models
and the impact of
reforms in the social
security principles
(Gonzalez-Rosset-
ti, 2005; Homedes
and Ugalde, 2000,
2005, Granados and
Gomez, 2000; Iriart,
Merhy and Waitzkin,
2000; Mesa-Lago,
2005, 2007).

41
Universalist reform of the health systems in Mexico and Chile.
A change of time or historical inertia?
IV. TRAJECTORIES OF REFORMS DURING THE
EIGHTIES AND NINETIES
Latin-American health system reforms started from the 1960s, however,
there is an assumption that reforms of the eighties were the earliest in
the cycle of stabilization and adjustment and their main objective is to
attain economic liberalization. The next table shows that the bulk of the
reforms will concentrate during the 1980s and 1990s decades (Table 3).
TABLE 3. TRAJECTORIES OF HEALTH SYSTEMS REFORMS IN LATIN
AMERICA (1960-2010)
PIONEER
1960s-1970s
EARLY
1980s
(Decentralization)
INTERMEDIATE
1990s
(Commodica-
tion)
DELAYED
2000 to present
(Universal)
Countries Bolivia
Cuba
Trinidad and
Tobago
Jamaica
Brazil
Chile
Costa Rica
Guatemala
Mexico
Venezuela
Argentina
Chile (1)
Paraguay
Surinam
The rest of the
Caribbean
Andean coun-
tries
Argentina
Chile
Ecuador
Mexico
Dominican Re-
public
Peru
Venezuela
Since the eighties
Source: Own elaboration from Azevedo, 1998; PAHO and WHO, 2004: Table 2; Mesa-La-
go, 2007: Table 7.1
TABLE 4. KEY OBJECTIVES OF REFORMS TO HEALTH SYSTEMS IN LAT-
IN AMERICA, 1980-2010
EARLY, 1980s
(Decentralization)
INTERMEDIATE, 1990s
(Focus and commodication)
DELAYED, 2000-present
(Universal)
(1) Release central gov-
ernment funds to repay
foreign debt
(2) Increase the exibility
and proximity of health
services to the popula-
tion
(3) promote community
participation
(4) In the case of Brazil: to
combine decentraliza-
tion and universalization
(1) Search for nancial and
administrative efciency
(2) Promotion of market strate-
gies to improve services
(3) Combination of public and
private sectors
(4) Achieve separation of the
service delivery functions from
the nancing functions
(5) Promote competition as
mechanisms to seek efcient
use of resources
(1) Expand coverage to
those excluded from so-
cial security systems
(2) Reforming the gener-
al health laws
(3) To ensure the right to
health
(4) To establish minimum
benets for the entire
population
Sources: Own elaboration from Ugalde and Homedes, 2002: 27; Vazquez, et. al., 2002: 30-31;
Tobar, 2006: 285; Homedes and Ugalde, 2002; Mesa-Lago, 2007, Barba, 2013.

42
Carlos E. Barba Solano
The main arguments wielded to justify reforms have
been to improve efciency, reduce the expense and
facilitate privatization (Ugalde and Homedes, 2002:
22-23; Abel and Lloyd-Sherlock, 2004).
Table 4 shows that in the early reforms the key com-
ponent was decentralization. Reforms were prag-
matically induced to release funds from the central
government to repay foreign debt22. A clear excep-
tion was the Brazilian reform aimed at guarantee the
universal right to health. However, the main argu-
ment to justify decentralization was to increase the
exibility of health services and to bring them closer
to the population. It was intended that the services
would meet the local needs and favoring the coop-
eration of the community (Vazquez et. al., 2002: 31)
According to numerous authors, the results of the
reforms that sought decentralization were poor, be-
cause of the increase of irrationality and inequality,
the spending was not reduced, coordination did not
improve and inefciency grew by increasing unnec-
essary referrals to higher administrative levels (La For-
gia and Gonzalez-Block 1995; Bossert: 1996; Holley:
1995; Larrañaga, 1999; Ugalde and Homedes, 2002)
During the nineties, there was a fundamental
change in the orientation of reforms, which from that
time were dominated by the search for efciency
and promoting marketing strategies to improve ser-
vices (Table 4). Intermediate reforms accentuated
the combination of the public and private sectors in
nancing, developing new management strategies
and in efciency as the main objective23 (Table 4).
To achieve greater efciency, were promoted the
separation of the service delivery functions from the
nancing functions and the competition between
service providers24 (Tobar, 2006: 285; Ugalde and Ho-
medes, 2002).
The second-generation reforms pursued to focus
actions and public services in the uninsured popula-
tion and do more with less or the same resources. This
eroded the principle of universality of coverage of
public services and tended to weaken the control of
transmissible diseases and vertical programs.
These reforms also wanted to consolidate markets
or quasi markets (mechanisms of competition in the
22 This explains why
international nan-
cial organizations
promoted and -
nanced these re-
form processes. In
fact, the World Bank
dedicated the World
Development Re-
port 1993 almost en-
tirely to the change
in health systems
(World Bank, 1993).
23 Already in 1985,
the Regional Com-
mittee of WHO for
the Americas esti-
mated that in this
region about 30%
of the spending was
wasted on health.
Besides, health sys-
tems were charac-
terized by a healing
and urban bias, in-
appropriate stafng
structures and bad
coordinated and
fragmented admin-
istrations (quoted
by Abel and Lloyd-
Sherlock , 2004: 809)
24 It was thought
that the State should
guarantee stable
nancial ows for
benets and not
necessarily to pro-
vide services di-
rectly, but through
purchasing health
services to private
providers and pri-
vate insurers to pub-
lic hospitals (Tobar,
2006: 285; Ugalde
and Homedes, 2002)

43
Universalist reform of the health systems in Mexico and Chile.
A change of time or historical inertia?
provision of social services) and to nance the health services demand
as well, instead of ensuring public offering. WHO incorporated the con-
cept of “rectoría” to refer to the role of government in health.
Since the 90s, the sign of the reforms changed, from the initial recogni-
tion that the two cycles of previous reforms had entered a deep paradig-
matic crisis (Tovar, 2006: 285-286). Third generation reforms have had four
main objectives: to extend coverage to excluded from social security sys-
tems, to reform general health laws, to guarantee the right to health and
to establish minimum benets for the entire population (Table 5).
However, as noted by Carmelo Mesa-Lago (2007), the vast majori-
ty of the “universalist” reforms conducted in Latin America during the
90s and the 2000s did not come to fulllment. Between 2003 and 2006,
eight countries adopted or were debating about new health laws or
changes to their health systems, but the overall scenario showed great
failures (Table 5).
TABLE 5. CHIAROSCURO OF REFORMS IN THE 2000S IN LATIN
AMERICA
Clear (Pros) Dark (Cons)
Chile had advanced into a third
generation of reforms that originat-
ed the AUGE program
Mexico had amended the General
Health Law in 2004 and had creat-
ed the ”Popular Insurance” (SP)
In 2006, the reform started in Domini-
can Republic in 2001, paralyzed and
started Counter-Reform discussion
The Ecuadorian reform initiated in 2008
was declared partially unconstitution-
al in 2001
The 1997 Nicaraguan reform was void
in 2005
The Venezuelan reform was complete-
ly paralyzed in 2006.
Source: Mesa-Lago, 2007: 159; Barba, 2010.
As shown in Table 5, the Chilean reform that led to the creation of AUGE
and Mexican reform that established the Seguro Popular can be con-
sidered as relatively successful, hence the importance of examining
them, especially in a context where the evaluation of the reforms are
scarce.
V. REFORMS IN MEXICO AND CHILE
HEALTH SYSTEMS IN CHILE AND MEXICO
In 1952 Chile developed a State health system, centralized, with a high
coverage and considered back then as one of the most universal, eq-

44
Carlos E. Barba Solano
uitable and with better quality among Latin-American
countries. However, during the eighties and the mili-
tary dictatorship, a system of private nancing was de-
veloped, which signicantly increased the number of
private clinics as a result of signicant public subsidies
(Azevedo, 1998: 194; Homedes and Ugalde, 2002: 58).
In Mexico, historically, the health system is high-
ly segmented, further comprising of the Ministry of
Health, private services and a broad segment of so-
cial insurance institutions for different sets of workers.
Coverage of workers in the formal sector is mainly di-
vided between the Mexican Institute of Social Secu-
rity (IMSS) created in 1943 and the Institute for Social
Security and Services for State Workers (ISSSTE) found-
ed in 195925 (Barba, 2010).
While the Chilean system has achieved an average
degree of integration, Mexico’s health system is char-
acterized by its disintegration (Mesa-Lago (2007).
However, both systems have achieved a high de-
gree of coverage. In Chile, in the late nineties, 69% of
the population was covered by public services, 26%
by private publicly funded institutions (ISAPRES)26 and
only 5% by private institutions.27
Historically, the Mexican case shows that the indig-
enous population has been excluded as the rest of
the population is distributed among social security
institutions, welfare state services and private health
insurance. Figure 1 shows the system’s prole in 1998.
Source: Own calculations based on OECD, 1998: 96
25 However, there
are other institutions
such as the Institute
of Social Security for
the Armed Forces
of Mexico (ISSFAM),
established in 1976;
and social security
for employees of
Petroleos Mexicanos
(PEMEX), included
in the employees’
contracts since the
thirties decade of
the last century (Bar-
ba, 2010).
26 Institutions of the
Health Insurance
System.
27 By the year 2000,
Chilean population
covered by the IS-
APRES rised 30%
(Granados and Go-
mez, 2000: 108)
FIGURE 1. PAST STRATIFICATION OF SERVICES AND RIGHTS
IN THE MEXICAN HEALT SYSTEM
Rights Formal Sector
Specialized
Services
Basic
Services
Exclusion
7%
Social Welfare
41%
Formal
Employment
insurance
49%
Private
Insurance
3%
Exclusion Informal Sector
& Proverty Groups

45
Universalist reform of the health systems in Mexico and Chile.
A change of time or historical inertia?
Figure 1 also shows stratication in rights. At the base of
the pyramid are the poorest, excluded by the health
system. On the next oor, the assisted sector that be-
long to the uninsured. Then there are those insured
through formal employment. Finally, at the top is lo-
cated a minority with higher incomes, able to hire pri-
vate insurance.
For policyholders who belong to the formal sector,
whose were part of the 49% of the total population,
the two most important institutions were the IMSS and
the ISSSTE. The rst had 80% of the beneciaries, the
second only 17% and well below we could nd the
ISSFAM and PEMEX workers, which both together at-
tended 3% of the insured (OCDE, 1998: 96; Gutierrez,
2002: graphic 4.2)
Another large segment of the Mexican health sys-
tem is conformed by the public health services for
the uninsured, vulnerable population as a whole
that includes 41% of the total population. The main
institution responsible for providing health assistance
was the Ministry of Health, accompanied by the
IMSS-Oportunidades program (formerly known as
IMSS Coplamar and IMSS-Solidaridad) and procure-
ment programs to access basic health services28(Bar-
ba, 2003 and 2010)
THE EARLY AND INTERMEDIATE REFORMS
OF CHILEAN AND MEXICAN HEALTH SYS-
TEMS.
Both Mexico and Chile health systems have experi-
enced early, intermediate and late reforms. In Chile,
the reforms of the eighties had repercussions such
as an incomplete municipalization of health services
and a considerable deterioration of public services
due to a drastic reduction in health investment. In
addition, private insurance companies started to
appear nanced through the National Health Fund
(FONASA)29 which covers part of the cost of the ser-
vice and the other part is paid by the user with the
exception of the homeless population.30 (Azevedo,
1998: 195; Homedes and Hugalde, 2002: 58)
28 The SSA was es-
tablished in 1943,
IMSS-Coplamar
in 1979, named
IMSS-Solidaridad in
1993 and changed
its name afterwards
to IMSS-Oportuni-
dades in 1997. Si-
multaneously, the
enforcement pro-
grams of access to
basic health services
were established in
1995 (Barba, 2003)
29 The only col-
lection agency for
health state imposes
a funding fee equiv-
alent to 7% of salary
for workers.
30 This system has
been very bene-
cial for the ISAPRE
that have been op-
erating with prot
margins of 20% and
administrative costs
of 20% as well, pre-
cisely because to a
very careful selec-
tion of customers; for
example, the trans-
ference of retired
workers and chron-
ically ill patients to
FONASA). Those
percentages were
reached thanks to a
limited range of ser-
vices offered to the
users and increases
in co-payments and
deductibles (Home-
des and Hugalde,
2002: 58).

46
Carlos E. Barba Solano
During the nineties, efforts were made to recover the functions of the
public sector by increasing investment, supporting decentralized local
authority services, trying to improve the effectiveness of subsidies, mak-
ing administrative improvements, actions to reduce inequality through
focusing investments in the neediest communities articulated with a
strategy for poverty reduction31 (Azevedo, 1998; Homedes and Hugal-
de, 2002 Tobar, 2006).
In Mexico, decentralization has gone through two stages; the rst one,
between 1983 and 1988,32 the second one began in 199433 and con-
cluded with the creation of the Seguro Popular (SP) in 2004, which has
an obvious centralizing inclination and provides benets to exactly the
same population served by the Mexican health services. Decentral-
ization included only those services provided by the Ministry of Health,
aimed at those who do not have social security or private insurance.34
The evidence indicates that decentralization resulted in more inequali-
ty within and inter Mexican states and exacerbated the fragmentation
of health policies increasing inequalities in mainly every health aspect
(Gonzalez Pier, 2005; World Bank, 2004: 156).
The government of President Ernesto Zedillo (1994-2000), tried to pri-
vatize the Mexican health system, through the Program of Health Sec-
tor Reform (HSRP), which intended to deregulate and dissociate some
segments of social security to enable participation the private sector,
not only in the eld of pensions but of health. The target was to create
a quasi-market35through the reversal of quotas36 and opening up the
possibility that the insured could chose doctors in primary care.
However, this reform failed because of the veto power of the union of
the Mexican Institute of Social Service (IMSS)37 and numerous PRI party
congressional representatives. (Gonzalez-Rossetti, 2005: 28-29).
31 The diagnosis of the reform process was very negative, for a detailed description of this diag-
nosis see: Homedes and Hugalde (2002: Table 3).
32 During the rst phase, which included only 14 of the 31 states, the balance of this process was
very negative because decentralization did not imply the transfer of authority to each state’s
government so they could make decisions in three crucial areas: programing, human resources
and nancial. The net result was an intensication in inequality and reduced quality of services
(Homedes and Hugalde, 2005: 216, Gonzalez Rossetti, 2005: 32).
33 This phase began in 1994 based on the signing of a Decentralization Agreement with each
state, which had a lot of resistance but nally, the last agreement got signed in 1999. The program-
matic authority system and decisions on stafng remained highly centralized. However, there was
greater exibility in the use of federal nancial funds, from the creation of the Health Services Con-
tributions Fund (FASSA). Since then, state services freely dispose of these funds transferred by the
federal government, with the exception of those corresponding to the category of wages, which
are the majority (Homedes and Hugalde, 2005: 216-217).
34 This particular group is known as “Open Population”.
35 Separation of nancing functions and services provision. Under a system of ‘quasi-market,’
providers can be private even using public funding as this same sample happened in the case of
Chilean ISAPRES (Le Grand, 1991).
36 A company would have the possibility to avoid IMSS afliation of their own workers if they prove
to have a private social security service hired.
37 For the union, reform proposals represented an imminent beginning of the dismantling of the

47
Universalist reform of the health systems in Mexico and Chile.
A change of time or historical inertia?
THE THIRD GENERATION REFORMS
IN MEXICO AND CHILE
MEXICO, CREATION OF THE SEGURO
POPULAR (SP)
After the transition to democracy in 2000, the big-
gest change experienced by the Mexican social
policy was the reform of the General Health Law in
2003 that gave rise to the Social Protection System in
Health (SPSS), designed to integrate health insurance
IMSS and ISSSTE with a new insurance system, created
in 2002: the “Seguro Popular” (Popular Insurance).
The reform in 2003 meant to address two long-stand-
ing problems of the Mexican system: the disintegra-
tion38 and social inequality in health. Unequal access
to health care in Mexico has multiple dimensions. The
rst one is the polarization in access to social security,
as shown by the following data for 2004: while the
coverage of social security for the elderly and indig-
enous native people is about 20%,39 the richest decile
in the income distribution had a 90% coverage, while
the poorest decile barely reached 1.5% coverage
(Scott, 2005: 60)
The second dimension is the unsatisfactory quality of
the services offered, easily shown in the uneven per
capita spending on health institutions. In 1995, tak-
ing the average per capita spending to the national
level as an index 100, PEMEX exercised a per capita
spending of 553.3, the IMSS 99.4, ISSSTE 63.0, SSA 52.8
and IMSS-Solidaridad 18.7. The per capita spending
on top of the pyramid of public services was 10 times
higher than in the base (OECD, 1998: Figure 17).
The third refers to the regional inequalities. In 1997 in
the Northeast39 region, the richest of Mexico, the 52%
of the population were right holders to social security
and were entitled to a health spending per capita of
$1,277 pesos41.
Comparatively, in the South Pacic Region42, the
poorest, only 16% had insurance and the per capita
budget for health was over two times lower43 (Gutier-
rez, 2002: Table 2).
IMSS through the
introduction of pri-
vate providers and
a dangerous prec-
edent in proposing
amendments to the
collective contract
(Gonzalez-Rossetti,
2005: 34).
38 Mexican seg-
mentation system
can be seen in Fig-
ure 1 presented in
the previous section.
39 In rural areas, so-
cial security cover-
age for the elderly
in 2004 was only 5%
(Scott, 2005, 60).
40 Including the
states of Nuevo
Leon and Tamau-
lipas, with a popu-
lation of 6.5 million,
89% of urban char-
acter, with the low-
est birth rates and
where the main in-
dustrial groups in the
country are located
(Gutierrez, 2002: 77).
41 Pesos from 1997.
42 Including the
states of Chiapas,
Guerrero and Oax-
aca, with a popu-
lation of 10 million ,
53% of them have a
rural origin, with high
birth rates, predom-
inant primary activ-
ities, where 25% of
the population is in-
digenous and 24.5 %
is illiterate (Gutierrez,
2002: 78).
43 $583 pesos.

48
Carlos E. Barba Solano
These inequalities became more complex due to
a prolonged and heterogeneous44 epidemiological
transition that led to the health system to face a dou-
ble burden: an unnished agenda in controlling in-
fections, malnutrition and reproductive health prob-
lems45. Then followed by emerging challenges on
account of diseases --as chronic diabetes or heart
or liver disease46, mental disorders-- and the growing
problem of injuries and violence (Frenk, 2007: 16).
However, health nancing did not increased to
meet the new risks structure. In 2004, just after the 2003
reform, Mexico invested only 5.8% of GDP on health.47
The situation was aggravated because before the
2003 reform in Mexico, about 50% of health spending
was private and almost entirely accounted to house-
holds expenses, which in 2004 were catastrophic or
impoverishing48 to 5 million people49 (SSA, 2005; Scott,
2005: 68)
To cope with this critical situation, in 2003 the Se-
guro Popular was framed into the SPSS. The SP offers
a basic health package that is accessed through a
public and voluntary insurance, designed for those
with a low income, jobless or self-employed people
that are not right holders to any social security insti-
tution (National Commission for Social Protection in
Health, 2011).
The package offered by the SP includes provision
of medicines, nanced through public subsidies and
progressive contributions from households depend-
ing on income levels and household assets. House-
holds in the rst four deciles do not contribute nan-
cially (Ministry of Health, 2006: Table 1; CNPSS, 2011).
The SP is legitimized by afrming its own Universalist
aspiration to exercise the constitutional right to the
protection of guaranteed health care for all citizens.
However, the 2003 reform did not change the domi-
nant paradigm called “fragmented pluralism,” which
tries to extend coverage across different systems,
which theoretically complement each other.
The SP focuses on rst and second levels of medical
care but aims to guarantees two types of services: the
essentials and the high cost services. The rst and sec-
ond level of medical care absorb most of the assigned
resources to the states and correspond to almost all
44 At the end of
the last century, it
was manifested as
the addition of new
aspects to the tra-
ditional patterns of
disease, disability
and death.
45 Problems related
to poverty.
46 Associated with
risk factors such as
smoking, alcoholism
and obesity.
47 This is equivalent
to $357 USD per
capita. This level of
spending on health
is signicantly lower
than the 14% of the
GDP spent in the
United States, equiv-
alent to $4,500 US
dollars per capita in
2000, and even less
than 6.1% of GDP
spent on average in
Latin America (SSA,
2004).
48 Catastrophic ex-
penses are dened
as annual health dis-
bursements of more
than 30% of the
available money in-
tended for food in
households; impov-
erishing costs repre-
sent expenses that
reduce available
resources below the
poverty line.
49 The World Bank
estimated that in
2002, 9% of insured
households in Mex-
ico faced impover-
ishing costs, while
40% of uninsured
households fell be-
low the poverty line
as a result of health
care costs. (World
Bank, 2005)

49
Universalist reform of the health systems in Mexico and Chile.
A change of time or historical inertia?
expected interventions in the Universal Catalogue of Essential Health
Services (CAUSES) and to the total of guaranteed medicines, which can
be supplied in ambulatory care units and general hospitals.
The high cost services are provided in specialties hospitals and are -
nanced through the “Fund for Protection against Catastrophic Expens-
es” (FPGC). However, the SP does not clearly establish which services
will be included. It simply claries that the provision is conditional upon
the availability of resources that are not sufciently guaranteed.
The package includes 283 rst and second level interventions, the
supply of 307 drugs and coverage of 1,500 diseases50, besides 57 ex-
pensive and specialized interventions subject to coverage by the Fund
for Protection against Catastrophic Expenses51 and 131 operations cov-
ered by the SMNG, created in 2006 and articulated to the Seguro Pop-
ular (CNPSS, 2011; Knaul, et. al., 2013).
Grogger and colleagues (et. al.: 2011) conrm the limited impact of
the SP on catastrophic expenses. They realized that the SP has only
signicant effects in reducing catastrophic health expenditures in rural
areas, but only regarding to consultations and hospitalization, while in
metropolitan zones it has little effect in that area, although it reduced
average health spending, especially in the purchase of medicines and
pregnancy care.
Cardenas (2011) founds that between 70 and 90% of those who re-
quired the services offered by the SP used care services but 5 out of
10 of those assisted afliated people had to make other expenses not
covered by the institution, demonstrating that personal expenses con-
tinue despite the reform52.
Although regional gaps in the coverage of health services have been
reduced, inequalities remain. This can be seen in Table 6, where it is
clear that in the richest region there is a minor lack of health services,
while in the poorest region there is an outweigh of these shortcomings.
50 100% served in rst class units, 95% of second level and 60% of those that generate catastrophic
expenditures and corresponding to actions of third level. (CNPSS, 2011).
51 In 2011, there were 57 interventions subject to coverage by the Fund for Protection against
Catastrophic Expenses which is part of the People’s Insurance (Seguro Popular): including various
types of cancer, corneal transplant, acute myocardial hearth attack in adults under 60 years old
and congenital and acquired malformations subject to surgery. In 2011, spending billed 40% of its
budget to pay for HIV antiretroviral (40%), breast cancer (25%) and neonatal intensive care (15%)
(Knaul, et. al., 2013: Panel 2, p. 214).
52 According to the assessment made by CONEVAL to the Seguro Popular in 2010-2011, while the
SP has signicantly improved the scale and equity of health nancing available for the population
uninsured by contributory social security institutions, there is no clear evidence yet to verify and
corroborate the program’s impact on health. We need to demonstrate that the nancial poten-
tial of the program will result in measurable progress on effective access to quality services and
the health levels of the population (CONEVAL, 2011).

50
Carlos E. Barba Solano
TABLE 6: PERCENTAGE OF PEOPLE WITHOUT ACCESS TO HEALTH
SERVICES IN THREE STATES FROM THREE DIFFERENT REGIONS IN
MEXICO (2008-2010)
Region Location Lack of Health Services
2008 2010
Richest Nuevo Leon (North region) 28.6 22.4
Middle Jalisco (Pacic region) 37.2 35.2
Poorest Chiapas (South region) 52.1 36.5
National 40.8 31.8
Source: Compiled from CONEVAL, 2011: Table 5
Furthermore, the characteristic segmentation of the health system has
not been overcome; it appears that it has added a new step to the
Health Pyramid stated above. This signicantly sets apart from the Uni-
versalists ideals and adds greater complexity to the system. Figure 2
shows this new situation.
FIGURE 2. SEGMENTATION OF THE MEXICAN HEALTH SYSTEM IN THE
LATE 2010S
Labor Law
Third Level
Services
Second Level
Services
Population with no
access to health
31.8%
SP-Oportunidades
9.0%
Insured workers
from the formal sector
36.6%
Seguro Popular (SP)
21.5%
Private
Insurance
1.1%
Basic
Services
Commodity exchange
+ Social Law
Programmatic
Counterbenefits
Sources: Own calculation based on: CONEVAL, 2010; INEGI and ISSSTE, 2010; CNPSS,
2009

51
Universalist reform of the health systems in Mexico and Chile.
A change of time or historical inertia?
We can notice in Table 7 that after the reform, the distribution of ac-
cess to contributory security remains highly regressive as in 2010, 50% of
the afliated to these systems were concentrated in the three deciles
higher incomes, while only 17.5% of the afliated belonged to the poor-
est four deciles. On the contrary, the access distribution to the Seguro
Popular is progressive since 63.8% of its members belong to the poorest
deciles. These data reafrm the dualistic nature of the Mexican health
system.
TABLE 7. MEXICO: PERSONS AFFILIATED TO HEALTH INSTITUTIONS BY
TYPE OF PUBLIC INSTITUTIONS IN 2010 (PERCENTAGES)
Persons afliated to social
security institutions
Persons afliated to the
Seguro Popular
Deciles 1 to 4 17.5 63.8
Deciles 7 to 10 50.0 10.3
Source: Compiled from Valencia, Foust and Tetreault (2013: Tables 9 and 11)
THE CHILEAN CASE
In Chile, during the government of President Ricardo Lagos, the Health
Reform was developed to address ve problems. First, inequality in ac-
cess to health care between ISAPRE system (public/private) and FONA-
SA (the public); second, deciencies in public hospitals management.
Third, the lack of regulation of plans and attentions in the private care
subsystem; fourth, the unsuitability of the model that emphasized chron-
ic diseases care and, as in the Mexican case, it had not been adapted
to the changing epidemiological prole. Finally, the insufcient funding
in the public sub-sector. This new reform intended to change the legal
structure of the health system in order to promote greater equity and
solidarity. The reform was estimated feasible because of the political
changes at parliamentary level (Lenz, 2007: 8)
The National Public Health System provides all Chileans formal univer-
sality of access to health care. However, as Urriola (2006) notes, in reali-
ty the exclusion occurs in various ways such as waiting lists, lower quality
of the benets and nancial requirements, especially to solve complex
medical interventions affecting catastrophic expenses. Therefore, the
timeliness, the quality and nancing are the crucial variables that were
considered in the 2004 reform (Urriola, 2006: 279-280).
The elaboration of the reform corresponded to an Interministerial
Committee and what was sought was to carry out a number of prin-
ciples, including: the universal right to health, to ensure an adequate

52
Carlos E. Barba Solano
and timely care for all citizens, considering the capa-
bilities and resources of the country; the equity of the
system; social solidarity; the efcient use of resourc-
es and social participation in health. (Roman and
Muñoz, 2008: 1600)
The reform crystallized a plan known as “Universal
Access with Explicit Health Guarantees” (AUGE), lat-
er renamed as Explicit Guarantees in Health Regime
(GES) which has resulted in a Plan of Public Health
and Health Plan for People.
The latter, unlike the Mexican SP sets the type of
beneciary and guarantees diagnostic procedures,
treatments and follow-ups in a limited number of spe-
cic and progressive diseases for patients. (Roman
and Muñoz, 2008: 1600)
AUGE was created in 2004 similar purposes to those
of the SP: improving the health care in terms of ac-
cess, quality of care and ensuring funding for the
most prevalent diseases and, nancially, with more
substantial burden on the patient and the Chilean
State. Pathologies leading to catastrophic expendi-
tures were included (2004, Ministry of Health).
The package attended by AUGE or GES is much
smaller than the SP: initially 5, by 2005 25, by 2007 56
and, by 2013, it reached covering 80 diseases; the
rest of the pathologies continue to be serviced by the
public system (FONASA), the ISAPRES53 and by private
medical services (Lenz, 2007: 24; Superintendence of
Health, 2015).
However, AUGE offers four explicit guarantees (GES)
for their beneciaries: guaranteeing access, that im-
plies to receive the precise attentions for each disease
in the institutions of FONASA or ISAPRES. The second
guarantee is quality assurance involving the granting
of health benets by registered or accredited opera-
tors to the Chilean Intendence of Providers. The third
would be timeliness guarantee that sets maximum
deadlines on service providers to meet established
protocols on time. Finally, a guarantee of nancial
protection, which establishes the obligatory require-
ment for users to make the co-payment.54 (Ministry of
Health, 2002, Superintendence of Health, 2015)
As in the case of Mexico, AUGE has been criticized
for the exclusion of diseases whose treatment is more
53 See note 17.
54 0% for A and B
afliates to FONASA,
10% Group C and
20% Group D and
members of ISAPRES
(Superintendence
of Health, 2015).

53
Universalist reform of the health systems in Mexico and Chile.
A change of time or historical inertia?
expensive, resulting in the rejec-
tion of many patients, this gives
this plan a relatively focused char-
acter. Regardless of this, unlike
the Seguro Popular, AUGE offers
explicit guarantees already men-
tioned and which are not present
in the Mexican case. In addition,
AUGE emphasizes on diverse high
mortality and cost conditions.
(Lenz, 2007; Roman and Muñoz,
2008).
Another distinctive AUGE fea-
ture is that it was conceived as
a dynamic system that proposes
to improve the services already
offered and gradually add oth-
ers. Nevertheless, the plan design
tends to address the acute phase
of chronic diseases, but the subse-
quent stages escape to the atten-
tion guaranteed by law, resulting
in complications associated with
the evolution of some non-consid-
ered diseases as well as the lack
of preventive actions performed
by the system.
Different authors consider that
AUGE has not reduced the costs
of the health system, when in fact
covering AUGE’s guarantees has
meant more funds than expect-
ed. Nonetheless, compared to
the SP, a signicant advance is
that patients have the right to ap-
peal to the judicial system when
AUGE guarantees are not met,
underscoring the prosecution of
this social right. (Ipanza, 2007; Ro-
man and Muñoz, 2008: 1601)
In terms of political economy,
Lenz highlights the success expe-
rienced by the reform in its phase
of political negotiations but the
political capital has not been
enough to pave the way and en-
sure its implementation. The au-
thor points out two unbeatable
obstacles: the losers, during the
negotiation phase, often block
or slow the pace of the actual re-
form; the second is that political
negotiation is moving in a relative-
ly abstract eld that has little to do
with the operational complexities
of the implementation phase.
With no doubt, this is an important
lesson to take into account in any
reform process. (Lenz, 2007: 31)
FINAL WORDS
In the introductory part of this work,
we wondered whether reforms to
the health systems of Chile and
Mexico could be framed on the
assumption of a change of time
marked by the emergence of a
basic universalism in different ver-
sions in Latin America. Evidences
show that the Chilean case is clos-
er to this assumption even if AUGE
program appears to be more fo-
cused than Seguro Popular (SP)
program, since targeting occurs
in a historical context of great-
er universality. AUGE tends to in-
crease the integrity of the health
system, equity in access, quality of
services and nancing, and even
the gradual inclusion of medical
conditions that generate cata-
strophic expenses as well as the
judicial prosecution of the right to
health. This does not happen in
the Mexican case.

54
Carlos E. Barba Solano
These Chilean achievements
mark goals that should be consid-
ered for a new reform of the Mex-
ican Health System with universal-
ist objectives, because since the
creation of the Seguro Popular
in Mexico, even though it offers
a broader package of services,
tends to reinforce the segmenta-
tion of the health system. It does
not solve the problem of “pock-
et expenses” made by the users,
it focuses on basic and second
level services and does not allow
overcoming regional gaps re-
garding health coverage.
On the other hand, the Chilean
reform exhibits important limita-
tions, as it does not seem to in-
uence enough to change the
structure of the Chilean health sys-
tem already segmented since the
creation of ISAPRES with a strong
preference in favor of private ser-
vices.
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(2015). Orientacion en Salud.
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cl/difusion/572/w3-proper-
tyname-501.html
Superintendencia en Salud
(2015a) Garantias Explicitas en
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fusion/572/w3-printer-6312.html
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cias de movilizaciones contra
el efecto de la globalizacion
en la salud: Latin-America. La
medicina social latinoamer-
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saos”. In Sanchez, M, Colomo,
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lud y Globalizacion. Madrid:
Ediciones FADESP.

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Vol. 1 No. 2
60
December 2015
METROPOLITAN GOVERNANCE
AND MANAGEMENT:
THE CASE OF GUADALAJARA
METROPOLITAN AREA*
Roberto Arias de la Mora**
INTRODUCTION
This article aims to reect about the analytical usefulness of the the-
oretical concept of the governance to understand recent trends of
transformation of societies settled in territories urbanistically consolidat-
ed large, in order to assess their relevance front to the processes of
change that are experiencing Latin American metropolis, the same as
identify their triggers factors, their strengths and limitations as well as its
opportunities and threats. For this purpose, the article focuses on the
study of the recent experience of the institutional changes and public
management deployed in the main metropolis of the West Central re-
gion of Mexico: Guadalajara Metropolitan Area.
The article is divided into three sections. The rst one is dedicated
to clarify the author’s position respect the various approximations and
theoretical approaches that have been produced under the notion
of governance, from which the relevant public administration is em-
phasized as a discipline and professional practice in any process of
change and social condition in mode of governance.
The second section the most signicant learning are presented on the
study of metropolitan policy coordination, which led to the formaliza-
tion of the Guadalajara Metropolitan Area. Finally, some reections on
the main components, as institutional as technical, that have shaped
hitherto the unnished process of metropolitan governance in Guada-
lajara are advanced.
* A preliminary version of this article was presented at the XX International Congress of the Latin
American Center for Development Administration on State Reform and the Public Administration.
The author acknowledges the views and inputs received by various colleagues to previous versions.
**Research Professor, El Colegio de Jalisco. E-mail: roberto.arias@coljal.edu.mx

61
Metropolitan Governance and Management:
The Case of Guadalajara Metropolitan Area
1. THE GOVERNANCE AS
THEORETICAL AND EMPIRICAL
CONCEPT: A BRIEF RECAP
The purpose of this article is not focused on making
a thorough review of the specialized literature about
the governance; however, it suits claried the posi-
tion from which it is proposed to navigate through
the quite a few ideas that have been proposed to
dene it, with the consequent result of confusion and
criticism that prevails around the theoretical and an-
alytical validity of the governance.
Indeed, the governance concept is the same is
used to dene product of the innovations of theories
of democracy were subjected to empirical testing in
various parts of the world (Meza, 2015), that for dene
rather inter-organizational networks and self-organiz-
ing (Rhodes, 1997), that others refer to as public poli-
cy networks (Porras, 2012) to theoretical renements
that come to be dened as “the totality of the the-
oretical concepts of to govern” (Kooiman, 2003: 4).
While recognizing the pioneering work of Kooiman
(1993), who identied and referred for the rst time
this trend of change on traditional patterns of govern
that it characterized by transit in one direction: from
the rulers to the ruled, to pass to other pattern whose
trafc is rather in both directions. In this article nor-
mative conceptions that followed, certainly under
shelter and promoting various international organi-
zations such as the World Bank (1992) and the Unit-
ed Nations (PNUD, 1997), which allegedly promoted
and described as “good” or avoided “democratic”
to the governance, for consider it a trend that was
favorable, and even desirable, front to challenges of
the contemporary societies.
This explicit departure from the regulatory approach-
es not intended to ignore the potential strengths of
this reconguration certainly moves away from the
unilateral vision of governing from the government,
and tends rather to recognize the interdependence
and encourage collaboration and partnership of
public-private nature, in both collaborative formulas

62
PhD. Roberto Arias de la Mora
inspired by the premise that “any actor, public or pri-
vate, have the information and knowledge required
to solve complex, dynamic and diversied problems,
nor have enough lookout for selecting effective tools
let alone enough power to unilaterally dominate”
(Kooiman, 1993: 251).
However it must be recognized too, no little resis-
tance and fruitless debates that have arisen in vari-
ous academic and government circles –and as it will
be shown later, the case study was no exception– for
reasons that estimate as “unacceptable conduction
of society in which the public power can share the
decision and execution of the activity publics with
private and social organizations, fact that in his opin-
ion would have the institutional and political effect
to weaken the value, meaning and the responsibility
public authority” (Aguilar, 2010: 36).
Another take away imperative to do for the nature
of the case study is presented and it has to do with
the actual metropolitan phenomenon1 (Arias, 2013),
it is with respect on the concept of urban gover-
nance (Pierre, 1999; UN-Habitat, 2002), whose design
approaches and confused with other theoretical ap-
proaches rather sociological, such as urban regime
(Stone, 1989), among others.
Denitely, the approach of the governance pro-
posed in this article attempts to go beyond the com-
monly accepted idea in the specialized literature
that emphasizes the notion of interdependence and
networks conguration between multiple actors and
institutions (Kooiman, 1993; Messner, 1997; Klijin, 1997;
Mayntz, 1999; Pierre, 2000; Pierre and Peters, 2000), to
take a stand openly in favor of the discipline and prac-
tice professionals of contemporary public administra-
tion under the indispensable presence of “an instance
of government not to drift” (Aguilar, 2006: 39), in the
rough seas of the processes of change and social driv-
ing, whether or not is promoted mode of governance.
From the foregoing considerations, it is possible to
recognize and appreciate the enlightening intel-
lectual effort of PhD. Luis F. Aguilar Villanueva, for
research and explore the origins and evolution of
the concept of governance, which underlines and
recognizes in public administration one of its intrinsic
1 For metropolitan
phenomenon it
means a concrete
expression of large
urban concentra-
tion, around or from
a historical and cul-
tural human settle-
ment, that maintain
a sustained political,
economic and so-
cial inuence on an
integrated territory
of multiple adminis-
trative jurisdictions.
This phenomenon is
universal and is re-
lated to the trend of
increasing urbaniza-
tion of human settle-
ments on the planet,
strengthening re-
gional markets in an
open world econ-
omy and in that
sense, it is a charac-
teristic cultural prod-
uct of our civilization
(2013: 28).

63
Metropolitan Governance and Management:
The Case of Guadalajara Metropolitan Area
components.2 For this reason, in this article assumes
as a starting point its conceptual proposal to under-
stand the governance as the new governing process
“by which the actors in a society decide its objectives
–fundamentals and conjuncturals– coexistence and
ways to coordinate to performed them: their sense
and their leadership of direction” (2006: 90).
This way of dening governance is not only empha-
sizes the notion of collective decision between actors
that make a society that involve the exercise of gov-
ernment, and that it is feasible and desirable in the
broader context of the recent economic and social
changes experienced by contemporary democra-
cies; but also, the argument here is that this deni-
tion holds helps to move towards a more robust con-
cept that bounded notion of governance narrowly
dened as public policy networks (Porras, 2012), to
assess the managerial skills of local governments in a
metropolitan context as is the case presented.
In this sense, a rst consideration is worth emphasiz-
ing of the governance concept suggested by Agu-
ilar Villanueva is the double dimension that involves
the orientation process and social change:
Therefore intentional activity that involves di-
recting society towards certain general pur-
pose and preferred specic objectives, such
as technical activity attainment of the objec-
tives that have to do with how to dene the
actions considered appropriate to carry out
the situations desired social (2010: 38).
This dual nature of the process of social direction of
the governance leads to understand it as a process
that is essentially structured doubly: both an institu-
tional dimension as the technical way that makes
possible its realization. In the words of Luis Aguilar:
[In the institutional dimension] the denition of
the objectives that give direction and meaning
to the action of the society and is considered
to should be involves reference to a system of
values, result of a long social history and that
is reected in values constitutional, legal norms
2 According to the
author, his concept
of public adminis-
tration is alien to “all
forms of dichotomy
or separation be-
tween administra-
tion and politics, is it
understood as poli-
tics or policy” (Agu-
ilar, 2006: 40).

64
PhD. Roberto Arias de la Mora
of social relations and public and social in-
stitutions, as well as a diffuse but active so-
cial ethos. [And at the technical level] the
achievement of the objectives required
causal production standards, which come
from the proven science, technology and
management results (2010: 38).
However, while the institutional dimension of
governance is possible to observe a clear corre-
spondence with the contemporary trend of the
public administration whose purpose, to say Agui-
lar Villanueva (2006), it aims to reclaim, restore and
rebuild the public nature3 of the administration; in
the case of technical level of the governance pro-
cess corresponds and expresses in the eld of the
public administration, through that aimed to re-
store, revive and rebuild their capacity for admin-
istrative response4 front to social challenges trend.
Hereafter this article will refer to both contem-
porary trends of the public administration as the
process of public management and refers, essen-
tially, to “the managerial ability of politicians and
public administrators to promote certain public
policies with a strategic sense” (Arias, 2013b: 68).
To express it in the words of Luis Aguilar Villanueva,
the process of public management has to do with:
The intentional nature of their action aimed
at achieving the goals and producing fa-
vorable results for their organizations, sup-
porters and communities, but especially
the fact that the realization of its goals is a
result not only depend on its resources, skills
and political will but is conditioned by the
purposes and actions of the various actors
in the political community and particularly
those of its competitors and rivals with rea-
sons or prejudices discursive and practically
oppose their goals and courses of action
and can also invest the resources neces-
sary to block the achieved progress or re-
verse them by invoking the public interest or
other political values (2006: 237).
3 “For recovery and
revival of the public
nature of public ad-
ministration basically I
understand the accent
is now [...] gets on the
legality of the election,
appointment and ac-
tion of authorities and
ofcials, which means
combat arbitrariness,
discretionality, the ex-
ception, discriminatory
treatment and impuni-
ty. I also understand the
legal exercise of public
resources, resulting in
blocking any type of
patrimonialism and cor-
ruption, access to infor-
mation on government
performance and the
conditions of society
and accountability to
the public [...] the re-
quirement that public
policies and actions by
the authorities perse-
vere tirelessly in its orien-
tation towards interest
and public benet [...]
and the need for citi-
zens to take part in the
deliberation of issues”
(Aguilar, 2006: 42).
4 “For recovery and
revival of the adminis-
trative capacity of the
public administration
basically I understand
the emphasis is now
placed on the ad-
ministrative structures
incorporate new or-
ganizational and new
management so that
the governments make
sense of direction to
their communities meth-
ods forms, are in able to
manage their adverse or
favorable environments,
are success factors and
future agents, ensure
economy-efciency-ef-
cacy (the E) and quality
in the provision of public
assets and services [...]”
(Aguilar, 2006: 40).

65
Metropolitan Governance and Management:
The Case of Guadalajara Metropolitan Area
From these conceptual clari-
cations is possible to establish a
clear link between the concept of
governance and public manage-
ment, correspondence is possible
to identify and observe empiri-
cally as shown below in the case
study. For now just remember the
number of factors or components
of governance, following the
Aguilar Villanueva’s argument,
will provide direction and struc-
ture in both its institutional dimen-
sion and a technical level.
On the institutional side, the
components of the governance
are the institutions of public pow-
ers, the justice system and secu-
rity, the market, civil society and
the system of international public
institutions. For its part, the compo-
nents that structure technically the
governance are the system of sci-
ence and technology, public pol-
icy, public nance and public ad-
ministration (Aguilar, 2010: 44-45).
From making theoretical position
which has been outlined to under-
stand and dene the governance
and its correlative governance
process, it is pertinent to last two
methodological details about our
case study is presented below.
The rst precisely has to do with
the object of study is the Guadala-
jara Metropolitan Area, whose se-
lection should be claried, was not
motivated by some kind of yard-
stick by which often characterized
the metropolitan phenomena. As
such, the dimensions of Guadala-
jara both its geographical extent
and its population density is below
other Latin American cities that
have been classied as megacities
(Aguilar, 2004) for its huge dimen-
sions, as in the case of the City of
Mexico in our country, or Sao Pau-
lo and Rio de Janeiro in Brazil, as
well as Buenos Aries in Argentina.
As metropolitan phenomenon,
the case of Guadalajara not seem
to offer evidence to prove mark-
edly different from the realities
observed or social and economic
problems experienced in megac-
ities or any other Latin American
cities of similar size or smaller than
the case It presented here. There-
fore, beyond the specic congu-
ration of the Guadalajara metro-
politan phenomenon, the article
focuses on the metropolitan prob-
lem, which has to do rather with:
The stiffness, failure and
obsolescence of tradition-
al political institutions of
local government to plan,
manage and govern ef-
fectively social harmony,
economic development
and sustainability of met-
ropolitan cities and conur-
bations, whatever their size
(Arias, 2013: 28).
Well-dened metropolitan prob-
lem, it is clear that essentially con-
cerns directly to the State, which
the need to give priority in its anal-
ysis an essentially institutional vi-
sion follows (Díaz-Cayeros, 1999).
In response to this view of the
problem and following the intu-
ition of Aguilar Villanueva about
twice structuring role that owns

66
PhD. Roberto Arias de la Mora
the Public Policy as “technical component and institutional [where-
as] feature of analysis, decision and the policy operation public is that
capture itself institutional-political and technical structure of the gover-
nance by integrating its components” (Aguilar, 2010: 50); The second
point that was adopted was to conne the study methodologically
Guadalajara Metropolitan Area analysis of public policy that was ap-
proved in Jalisco on metropolitan coordination.
2. THE METROPOLITAN POLICY
COORDINATION IN JALISCO
AND ITS IMPLEMENTATION IN THE
METROPOLITAN AREA OF GUADALAJARA
In accordance with the analytical perspective of public policies, the
exposure of the case study was organized following an approach to
public policy cycle (Theodoulou, 1995: 3). The rst section is devoted
dening the metropolitan problem in the case of Guadalajara, focus-
ing on the process of extensive and dispersed urbanization as a result
of the directive inability of municipal governments to meet the chal-
lenges of a metropolitan phenomenon.
In a second time deals with the formulation stage of the policy of
metropolitan coordination in the institutional features that are cong-
ured from the constitutional reform approved in Jalisco are highlighted.
The third section gives an overview of the main difculties that involved
a long and winding process of implementation of the policy in the case
of the Guadalajara Metropolitan Area.
2.1. DEFINITION GUADALAJARA’S METROPOLITAN PRO-
BLEM
The fundamental institution of the Mexican State to the territorial orga-
nization of power is the Free Municipality, which in accordance with
the respective constitutional requirements “is the basis of the territorial
division and political and administrative organization” (Article 115 of
the Constitution of the United Mexican States and 73 of the Constitution
of the State of Jalisco).
By virtue of that, it can be noted that the governments and munici-
pal public administration that currently make up the geographical area
formally recognized as a Guadalajara Metropolitan Area, the most sig-
nicant for governance institutional components, since they dene the
rules and modes of social interaction, economic and policy over the

67
Metropolitan Governance and Management:
The Case of Guadalajara Metropolitan Area
vast metropolis territory. Therefore, capacity and man-
agerial effectiveness5 is at the root of the metropolitan
problem.
Conceptually this capacity and managerial ef-
fectiveness of the governments and the municipal
public administration is strongly conditioned by the
phenomenon of “fragmentation of the decisions
and actions of the government” (Aguilar, 2013: 125),
which is motivated by both the institutional frame-
work which they operate as the prevailing adminis-
trative structure, both conditions that:
Adversely affect the efciency and quality of
government management while numerous
opportunities to improve social life are lost
and many social problems remain unresolved,
worsen harmfully if the government does not
act integrated into the articulation of policies
and resources form, and to establish forms of
coordination and partnership between mem-
ber entities and between the governments
(Aguilar, 2013: 126).
Empirically it can establish strong implications of the
institutional framework in force in the municipalities
that make up the Metropolitan Area of Guadalaja-
ra in its everyday performance face a double chal-
lenge. On the one hand, it faces the fragmentation6
between departments and agencies belonging to
other levels of government, as federal or states that
among the councils themselves.
The most outstanding feature of the fragmenta-
tion among governments that fosters the current in-
stitutional model resides in its weakness to generate
an effective metropolitan coordination that, at the
same time, is explained by the absence of incentives
to coordinate among municipal governments, rather
they seem answers to the conditions prevailing polit-
ical and economic competition in the local context
(Caro, Gatica and Ruiz, 2013: 68).
On the other hand, the municipal governments
appear to face difculties arising from the fragmen-
5 “The question
about the ability
and effectiveness
of the governments
policy has been
placed in the cen-
ter of the disciplines
that study the gov-
ernment and in
the heart of public
concern. [...] The
list of management
aws governments
can spread and be
itemized, but their
common denomi-
nator is the relative
ineffectiveness of
government in the
performance of
public functions and
the achievement of
the objectives of so-
cial, with the result
that there has been
growing the skep-
ticism managerial
capacity of the gov-
ernments” (Aguilar,
2010: 5).
6 “Fragmentation
between” is dened
as the government’s
situation is char-
acterized by the
disparity between
the various gov-
ernment agencies
that “sharpens and
becomes in a dis-
sociation when due
to laws, regulations,
policies, practices
and administrative
bodies become
self-contained, dis-
tance themselves
from each other
and operate in-
dependently from
other government
agencies, with per-
haps having com-
munication but
no collaboration”
(Aguilar, 2013: 128).

68
PhD. Roberto Arias de la Mora
tation within7 their public administrations. The most
telling feature of this kind of fragmentation resides in
the inability to develop and consolidate internally an
administrative system based on civil service of career
that to ensure the compliance with the principles of
neutrality, equality, ability and merit in assessing the
performance of the administrative system municipal
public servants (Arias, 2010: 93).
Among the main causes of fragmentation between
and the municipal governments stands the politi-
cal-electoral dynamics of competition. According to
the most recent studies on the electoral dynamics of
Jalisco (Gutiérrez Mora, 2011), the model of political
competition in the current entity since 1994, recon-
gured a very similar behavior electoral scenario is
seen in an electoral market duopoly nature by virtue
of the strong competition between the two political
parties with greater presence in the state: the Na-
tional Action Party and the Institutional Revolution-
ary Party. This dynamic just beginning to be modied
following the eventual emergence of a third political
force with the real capacity to compete as it was
possible to verify this during the election of 2015 in
which the Citizen Movement Party won important
electoral victories.
Beyond the election results, which want to empha-
size in this context of highly competitive elections
are the political incentives that the municipal gov-
ernments that share a metropolitan context face. In
particular, recent research has shown that political
incentives motivate lax regulations in the real estate
development process, increases the polarization of
land use and consequently increases the polarization
of income and economic activity, which in turn ex-
acerbate the problems of collection and provision of
public assets that the municipal governments on the
periphery of a Metropolitan Area face (Caro, Gatica
and Ruiz, 2013).
The conditions prevailing of fragmentation among
and the municipal governments, together with his
short constitutional period of just three years that
motivates politicians to favor the results of short-term
solutions on greatest encouragement, have led to
a very limited institutional capacity in the municipal
7 The “fragmenta-
tion within” is de-
ned as the present
government situa-
tion “a lot of admin-
istrative units, whose
the hierarchical-bu-
reaucratic authority
organization and
work, internal regula-
tions, management
style and administra-
tive practices make
internal drives be-
come you self-con-
tained, separated,
indifferent to each
other and are inde-
pendent in their op-
eration with respect
to the other units”
(Aguilar, 2013: 128).

69
Metropolitan Governance and Management:
The Case of Guadalajara Metropolitan Area
governments to manage the wide powers available,
by constitutional mandate, in terms of land use and
urban planning.
The limited institutional capacity have led in turn,
several critical issues ranging from the separation of
municipal planning instruments for any public policy
purpose sought to be promoted on a metropolitan
scale, such as obsolescence or lack of the municipal
instruments most basic urban planning, to the lack of
citizen empowerment in urban planning, critics all of
which have resulted in the lack of political incidence
of the planning instruments and high prosecution of
urban development processes in virtually affairs all
municipal territories that make up the Metropolitan
Area of Guadalajara.
The net result of these critical factors results in a cru-
cial problem expressed through the dynamics of ur-
banization that has historically been expanding scat-
tered in the municipal territories that make up the
Metropolitan Area of Guadalajara,8 with consequent
rapid resource depletion natural available in your re-
gion.9 In the next picture the causal lines described
around Guadalajara Metropolitan problem illustrat-
ed, following the analysis technique known as tree’s
problem (Roe, 2013):
Figure 1. Causes of the extensive urbanization, dispersed and
predatory of natural resources of the dominant region in the
Guadalajara Metropolitan Area
Central Problem:
Expansive urbanization, dispersed and predatory of
natural resources of the region
Poor advocacy of planning
instruments
Untying of existing planning
instruments
Obsolescence and / or lack of
planning instruments
Limited institutional capacities in
terms of planning
Organic-institutional fragmentation of
municipal planning powers
Constitutional short periods of
municipalities
Lack of citizen empowerment in
terms of planning
Source: Made by myself.
8 The municipalities
that currently make
up the Metropolitan
Area of Guadala-
jara are nine, in al-
phabetical order: El
Salto, Guadalajara,
Ixtlahuacán de los
Membrillos, Jua-
nacatlán, San Pedro
Tlaquepaque, Tla-
jomulco de Zúñiga,
Tonalá, Zapopan
and Zapotlanejo.
9 The changes in
land use in the pe-
riod between 1990
and 2011 reveal
that the urban area
was by far the most
widely increased
passing from 29,694
to 59,893.1 hect-
ares. This is 30,198.3
hectares in a de-
cade. In contrast,
most land use de-
creased during the
same period was
fed agriculture with
12,121.7 hectares
least 9518.1 hect-
ares less than scrub
and forests with
8,534.6 hectares
less (Gutierrez et al,
2013: 120).

70
PhD. Roberto Arias de la Mora
For reasons of space we do not enter the particular analysis of the
multiple consequences of the model of expansive, scattered and pred-
atory natural resource development. For now it sufces to stress the rel-
evance of the metropolitan problem has taken to the agenda of the
federal government, as it nds the current National Development Plan
for the period 2013-2018, recognizing that “sprawl some metropolitan
areas in Mexico has translated in cities where distances are a barrier to
the ow of people and assets into the jobs and markets in which it can
generate the highest benet” (Presidency of the Republic: 17).
In the case of the Guadalajara metropolitan phenomenon, this urban
sprawl has reinforced the continuing trend of depopulation of the state
capital that has been observed since the beginning of the decade of
the nineties of the twentieth century, and the subsequent accelerated
repopulation that to face the peripheral municipalities.
In correspondence with the analysis technique used (Corzo, 2013), in
the image below graphically illustrate some likely consequences of this
territorial dynamic cause of the social and economic dynamics of the
Metropolitan Area of Guadalajara. What matters now is to emphasize
the processes of social exclusion and loss of economic opportunities
that affect and threaten the productivity and sustainability of the qual-
ity of life of the inhabitants of the metropolis:
Figure 2. Consequences of the extensive urbanization, dispersed and predatory develop-
ment of natural resources of the dominant region in the Guadalajara Metropolitan Area
the economic activity
Growing informality of
lower income
Impaired quality of life
and weakening the
social tissue
Exclusion
vices deficit and Ser
public spaces
Lowering groundwater
Pressure on natural
production
Inadequate housing
and Risk Areas
gular settlements
Proliferation of irre
municipios periféricos
Ixtlahuacán de los Membrillos, Tlaquepaque,
Acelerado crecimiento poblacional en
(Tlajomulco de Zúñiga, El Salto, Tonalá,
Zapopan, Juanacatlán)
Central problem:
Expansive urbanization, scattered and predatory
development of natural resources in the region
Depopulation of the central
municipality (Guadalajara)
Wrowing deteriorating
infrastructure and
negative impacts on
economic productivity
Longer time of population
displacements
Poor transport services
Intensive use of vehicles
particulares
Atmospheric
pollution
Increased of
marginalization and
urban poverty
Source: Made by myself.

71
Metropolitan Governance and Management:
The Case of Guadalajara Metropolitan Area
2.2. POLICY FORMULATION
OF METROPOLITAN COORDINATION
In order to better understand the scope of the met-
ropolitan policy of coordination that took shape after
the addition of Article 81 Bis of the Constitution of the
State of Jalisco, it’s relevant since the formation of lo-
cal public powers in both institutional component of
the governance.10 The aforementioned constitution-
al provision states:
Article 81 Bis. -In the case of municipalities within
the same metropolitan area, they will be coordi-
nated, in the exercise of its constitutional powers,
according to the general rules on metropolitan
coordination issues the State Congress.
The metropolitan coordination will carry out
through the following instances:
I. An instance of political coordination for each of
the metropolitan areas, which the State Gover-
nor will integrate the mayors of the municipalities
of the respective metropolitan area and, prior
agreement. Its members will dene the legal sta-
tus of these bodies.
II. An instance of a technical nature which shall
consist like a public agency with legal personality
and assets denominated Metropolitan Planning
Institute, which must be made by the respective
municipalities metropolitan area; and
III. An advisory and citizen participation instance
honoric for each of the metropolitan areas,
which may participate in the evaluation and
monitoring tasks.
The rules for the organization and functioning of the
bodies of metropolitan coordination will be estab-
lished by law on the subject issued by the Congress
of the State of Jalisco.
Both the formulation of the Constitution and the
secondary legislation passed by the State Legislature
was due to an intense agenda promoted during the
period 2007-2009 in which:
10 The formation of
the government is
structured by rules
that dene both the
process of choosing
the headlines as the
respective scope
of the democratic
constitutional State
and of the govern-
ment and deter-
mine the relations
between govern-
ments and public
authorities with the
citizenship and, as
Aguilar Villanueva
warns, “is evident or
thinkable that not
will be as the pro-
cess of governing in
parliamentary sys-
tems than in presi-
dential, in the feder-
alist (or autonomy)
in the unit, in the uni
or the bi-chambers,
regimes politicians
with limited or exten-
sive freedoms citi-
zens” (2010: 45).

72
PhD. Roberto Arias de la Mora
The metropolitan issue also followed a legisla-
tive path that led to the creation of a Com-
mission on Metropolitan Affairs whose work
during this rst period, they were implemented
in approving an amendment to the Constitu-
tion of the State of Jalisco,11 the approval of
Law Coordination Metropolitan12 and approv-
al of the Decree approving the declaration of
“Guadalajara Metropolitan Area”, comprising
the municipalities of Guadalajara, Zapopan,
Tlaquepaque, Tonalá, Tlajomulco de Zúñiga,
El Salto, Juanacatlán and Ixtlahuacán de los
Membrillos13 (Arias, 2013: 18).
As it can be deduced from the preamble to the ini-
tiative presented to the plenary session of the State
Congress of Jalisco during its regular meeting held
on August 30, 2007,14 with the approval of the consti-
tutional reform sought to encourage a fundamental
change in the way that it had come board that met-
ropolitan problematics.
The emphasis is clear, at least to a level of argumen-
tation it focuses on making a difference for the con-
stitutional reform from previous institutional formulas
approved and tested for the public management of
metropolitan issues in Guadalajara, same as they are
rated as inadequate and, in many cases, as frankly
obsolete:
The absence of satisfactory institutional re-
sponses has to do with the inefciency of gov-
ernment processes to design and implement
policies that provide solutions to major metro-
politan lags. The obesity and the rigidity of the
administrative apparatus, lack of technical
expertise, the discretionary policy decisions,
the lack of inclusive management mecha-
nisms and the lack of development planning,
have hindered long-term vision and postpon-
ing solutions (Exposure, 30/08/2007).
11 Decree No.
22137 / LVIII / 07 of
the State Congress
amending articles
35, 50,74, 80,81-bis
and 87 of the Consti-
tution of the State of
Jalisco published in
the Ofcial Gazette
of the State of Jalis-
co date added May
1st, 2008, number 13,
section III, pp. 3-7.
12 Decree No. 23082
/ LVIII / 09 issued by
the Metropolitan
Coordination Law
of the State of Jalis-
co adopted on De-
cember 11th, 2009.
13 Adopted on July
17th, 2009, and pub-
lished in the Ofcial
Gazette of the State
of Jalisco on De-
cember 26th, 2009.
14 At work the idea
that public poli-
cy analysis at least
three basic features
to share any disci-
pline or methods
with which it is un-
dertaken is assumed
(Merino, 2010: 10),
so largely legal-po-
litical arguments on
the question has
been analyzed are
taken up.

73
Metropolitan Governance and Management:
The Case of Guadalajara Metropolitan Area
The institutional responses to the preamble refers
have to do the same with the Intermunicipal Wa-
ter System and Sewerage (SIAPA –for its acronym in
Spanish–), the Public Transport System in the Metro-
politan Area (SISTECOZOME –for its acronym in Span-
ish–), passing for the Council of Guadalajara Metro-
politan Area and its various nancial instruments such
as the Metropolitan Escrow, to the former and ques-
tioned Intermunicipal Department of Public Safety.15
The different emphasis to enter the via of metropol-
itan coordination refers to its oriented public policy
approach, as is clear from the purpose of contributing
socially “to resize the public policy and orient them
according to the demands and needs of residents
metropolis, thus facilitating the integration mecha-
nisms and social cohesion ‘and, in the strictly political
sphere’, to establish new instruments accountability
and democratic control” (Exposure, 30/08/2007). In
light of this alleged oriented toward the public policy
is appropriated to address the scopes of the Consti-
tutional Reform from Public Administration like techni-
cal component of the governance.16
From a perspective of the Public Administration
projects a structuring of the governance process
around metropolitan issues emphasized more the
establishment of a clear distinction between polit-
ical functions, technical and consultative that took
shape after the creation of three coordinating bod-
ies metropolitan clearly dened, their engagement
and eventual potential of the governance cultivated
on relationships between these groups.
In the following outline the main relationships be-
tween the three instances of metropolitan coordina-
tion which are deducted from their legal basis are
illustrated:
15 From the per-
spective of public
administration dis-
cipline, the afore-
mentioned formulas
within the ambit of
public manage-
ment (Bozeman,
2006: 23), which in
this article referred
to as public man-
agement (Aguilar,
2006: 15). In general,
these alternatives
focused their atten-
tion on the reorga-
nization and opera-
tion of government
machinery in order
to increase the ad-
ministrative capaci-
ty of the public ad-
ministration.
16 The necessary
presence and rele-
vance of the public
administration due,
to say Aguilar Villan-
ueva, two factors:
the fact that the
form of organization
and work process-
es within the public
administration deter-
mine the effective-
ness and efciency
of the governance
and by the fact that
the current public
policies are carried
out with the involve-
ment of multiple
public organizations;
however that “so-
cial effectiveness,
cost efciency and
inter-mainstreaming
are principles of ac-
tion that does not
ensure the public
administration of tra-
ditional hierarchical
bureaucratic cong-
uration” (2010: 52).

74
PhD. Roberto Arias de la Mora
Scheme 1. Major Relationships between Instances of Metropoli-
tan Coordination
Metropolitan
Planning Institute
Metropolitan
Coordination
Assembly
Citizen Metropolitan
Council
Produce instruments
Request opinion
· Study and authorizes
· Send to the Councils (approval)
Provide information
Emit recommendations
Source: Prepared by myself as provided by Article 106 of the Ur-
ban Code of the State of Jalisco, in (Arias and Arellano, 2013: 43).
As the diagram above illustrates, the Metropolitan
Coordinating Board as political body plays a central
role in technically structuring the governance’s pro-
cess, making it possible to establish that, in essence,
follows a line of response based on the premises of
the governance, while is based on the capacity of
government’s actors involved to guide to the society
(Aguilar, 2010: 24).
With respect to the Metropolitan Planning Institute
as a technical instance of the metropolitan coordi-
nation sufce to say that its conguration as a de-
centralized public agency intermunicipal obeyed an
observable trend in public discussion of metropolitan
problem that arose during the years before and was
prompted by the experience of another failed ini-
tiative intermunicipal nature,17 intended to form the
Planning Institute of the Guadalajara Metropolitan
Area.18
17 On this initiative
that is available
(Arias, 2013).
18 Intermunicipal
Coordination Agree-
ment and Rules Plan-
ning Institute of the
Guadalajara Metro-
politan Zone.

75
Metropolitan Governance and Management:
The Case of Guadalajara Metropolitan Area
Moreover, it should be noted the change in corpo-
rate guidance of the policy coordination metropoli-
tan arose during the nal phase of its development.
In principle, the constitutional reform and the set of
legal instruments initially approved by Congress of
the State of Jalisco, sought to inuence the cong-
uration of the public authorities in order to promote
sufcient political incentives within the municipalities
to promote coordination tools metropolitan through
a governance process encouraged from the sphere
of the public power of the state.
This hypothesis is deduced from the powers con-
ferred both legislative and executive powers to initi-
ate the corresponding processes to issue declarations
of the respective metropolitan area in the case of the
Congress of State and Gauteng Metropolitan in the
case of the Governor. In this regard, sustained legal
hypothesis initially sought to raise an implementation
process of the policy coordination oriented “top-
down”,19 while, as referred to in Article 81 Bis of the
local Constitution, members of a Metropolitan Area
municipalities –previous analysis and formal decla-
ration by the Congress of the State– would have to
attend a coordination scheme in accordance with
established constitutional basis and existing regulato-
ry standards in this area.
However, this hypothesis has not prospered under the
observations made by the state governor to the Met-
ropolitan Coordination Law passed by the State Con-
gress, prompting that was not published and came
into force (Observations, 21/12/2009). In this sense, as
has already been mentioned in previous studies:
The observations of the state governor creat-
ed the conditions for a change in orientation
initially adopted, since the Commission on
Metropolitan Affairs of the new state legisla-
ture approved submit a new agreement of
Measure Metropolitan Coordination, whose
resulted in legislative work a new law Metro-
politan Coordination of State of Jalisco was
nally published in the ofcial newspaper “the
State of Jalisco” of February 3th, 2011 (Arias,
2013: 19).
19 For an overview of
deployment models
such as “top-down”
are available Ballart
and Ramió (2000).

76
PhD. Roberto Arias de la Mora
Unlike the rst version of the Metropolitan Coordi-
nation Law, the legislation current was based and
recognized principles of municipal autonomy, con-
sensus, coordination and effectiveness as its guiding
principles, which reorients the “bottom-up”20 process-
es of metropolitan governance exist based on coor-
dination arrangements between municipal authori-
ties in the rst instance and later with the executive
head of State.
Under this institutional weakness reorientation of
Metropolitan Coordination Board as political author-
ity is more than obvious, whenever regardless of the
express constitutional right to have their members to
dene their legal nature, formally this instance cannot
go beyond being a “commission” or “conference” is
often the handiest formal mechanism to promote in-
tergovernmental coordination.21
This organic policy conguration instance of met-
ropolitan coordination could not be otherwise un-
der institutional constraint derived from the Mexican
federal government and the constitutional principle
of “municipal freedom”. In particular, the principle
whose reason to be back to the post-revolutionary
period, established a constitutional guarantee for the
exercise of municipal powers to the effect that they
were carried out by “the city exclusively and no inter-
mediate authority whatsoever between this and the
State government “(Article 115 of the Constitution of
the United Mexican States).22
2.3. THE IMPLEMENTATION
OF THE POLICY OF METROPOLITAN
COORDINATION IN THE GUADALAJARA
METROPOLITAN AREA
If the process of deliberation and political agree-
ment23 was key to enable the constitutional reform
in Metropolitan Coordination in Jalisco –even despite
the institutional constraints and techniques for gover-
nance arising from the formation of the government
and the public administration in the state– civil so-
20 For an overview
of deployment
models such as
“bottom-up” view
are available Ballart
and Ramió (2000).
21 That kind of foral
mechanisms are
often made up of
public ofcials or by
elected politicians
who belong to dif-
ferent levels of gov-
ernment and “who
meet to discuss and
eventually agree on
the issues that have
charge” (Jornada,
2001: 45).
22 For further dis-
cussion of the fed-
eralism as important
institutional compo-
nent of the metro-
politan governance
analysis can be re-
viewed (Arias and
Velázquez, 2014
and Arias, 2013a).
23 For a review of
the paths followed
by political deliber-
ation metropolitan
coordination on the
introductory study is
available at (Arias,
2013).

77
Metropolitan Governance and Management:
The Case of Guadalajara Metropolitan Area
ciety24 became a key factor triggering of the im-
plementation process of its implementation in the
Guadalajara Metropolitan Area.
Indeed, the process of sustained dialogue and
cooperation between local authorities and the
plural group of citizens, civic organizations, busi-
ness organizations and professional associations
coalesced around the Assembly for the Metro-
politan Governance, it resulted in several political
agreements that opened the opportunity for the
Convention Metropolitan Coordination Guada-
lajara Metropolitan Area between municipal au-
thorities and of the State was nally signed on Jan-
uary 26th, 2012.25
The relevance of the experience displayed by
the Assembly by the Metropolitan Governance is
the level of advocacy that failed to reach at the
time and that was expressed in the very Coordi-
nation Agreement which was signed by the local
authorities, where they joined some of the recom-
mendations developed and approved by the As-
sembly, as the adaptation of public procedure for
the establishment and integration of the transient
by the Metropolitan Coordination Commission as
the body responsible for issuing operating bases of
the future coordination mechanisms for the case
of the Guadalajara Metropolitan Area.26
According to the Coordination Agreement
signed by the authorities, the transient by the Met-
ropolitan Coordination Committee were formally
in charge with the following tasks:
1. The extent and scope of intervention of the
Instances Metropolitan Coordination in plan-
ning, programming, budgeting, implemen-
tation, monitoring, review and evaluation, in
the functions and municipal public services
that perform by or metropolitan coordination
schemes association.
2. The powers reserved to the municipalities in mu-
nicipal utilities and functions carried out by met-
ropolitan coordination schemes or association.
24 The civil society is
recognized as an insti-
tutional component of
the governance under
which “it is proved that
the organizational forms
of the civil society are
essential to produce
moral and emotional
ties that make individ-
uals and families, pro-
mote organizational
forms of solidarity and
mutuality and increase
in the people a civic
sense of belonging and
concern for the welfare
of society as a whole”
(Aguilar, 2010: 47).
25 The Assembly by
the Metropolitan Gov-
ernance and the col-
lective of citizens and
organizations was for-
malized in November
2011 and completed
its work shortly after the
signing of the Coordina-
tion Agreement by the
local authorities, under
which decided to grant
a vote of condence
the team of profession-
als who subsequently
joined the transitional
Metropolitan Coordina-
tion Commission. This ex-
perience can be found
(Arias, w/d).
26 The procedure ends
on February 3th, 2012
with the public appoint-
ment of the team of
professionals who would
form the Transitional
Commission by the Met-
ropolitan Coordination,
mainly composed of
members of the Assem-
bly by the Metropolitan
Governance (Mural,
February 4th, 2012).

78
PhD. Roberto Arias de la Mora
3. The contributions of nancial, human and material resources that will
make the Parts for each function or municipal public service carried
out by metropolitan coordination schemes or association.
4. The contributions of nancial, human and material resources that
individual Parts for running Instances Metropolitan Coordination.
5. The rules, if any, of the establishment and operation of a Trust Met-
ropolitan.
6. The settlement rules of the Instances Metropolitan Coordination
and compliance or termination of expected obligations in the
event of termination of the Convention Metropolitan of Coordina-
tion the Guadalajara Metropolitan Area.
7. The organic statute of the instances of Metropolitan Coordination.
8. The establishment and functions of the Institute of Metropolitan Co-
ordination (sic), and
9. The necessary studies for the Metropolitan Coordination (Arias,
2013a).
The formal works of the Commission were not without difculties aris-
ing from the electoral context for which it was transited; however, for
the purposes of this article it is relevant for now emphasize the potential
inability to complete the task on the rules for the eventual establish-
ment and operation of a Metropolitan Trust.
Beyond the difculties arising from the electoral environment that
affected the rhythm of work of the Commission, the resistances are
explained by the strong barriers that involved the status quo27 of pub-
lic nances28 for funding to metropolitan development. In short, local
authorities decided not to take the risk of changing the rules of met-
27 The metropolitan existing mechanisms currents nancing through a longstanding gure col-
loquially called Metropolitan Council, had recently undergone a substantial change in the way
to operate, not only by sustained increases in resources and diversication of works and public
funded projects (Sánchez, 2015), but by nature “focused” for new projects began to be nanced
at the initiative of the mayors to the Metropolitan Council, the implementation of which ran under
the responsibility of the municipal authorities, so development nance metropolitan resulted in an
apportionment of resources among municipal governments with the resources available were
sprayed at the detriment of funding for other projects with a metropolitan scope and impact.
In the same line, recent evaluations of metropolitan and regional funds operating nationally (e
Iracheta and Iracheta, 2014, and Moya, 2014), suggest precisely that resources are allocated to
the implementation of truly metropolitan projects through a dening transparent and co-metro-
politan priorities, plus some proportion of resources being channeled contestable ways to boost
competition and intergovernmental associations is privileged, as well as comprehensive and
long-term strategies.
28 The public nances is a component that is the same time institutional and technical to the ex-
tent that allows “sufcient nancially support government action in order to be able to sufciently
develop policies, programs and public services that should mandatory offer, as constitutionally
and legally prescribed” (Aguilar, 2010: 48-49). And under an array of governance is “combined
with the nancial situation of the economic society, with the force of popular and commercial
banking and investment funds with risk capital available for investment in long-winded and dis-
posal of assets of capital” (Aguilar, 2010: 49).

79
Metropolitan Governance and Management:
The Case of Guadalajara Metropolitan Area
ropolitan nancing under extraordinary eventual economic benet
for local authorities that represented preparing the Pan-American
Games in 2011 and its immediate implications for the electoral pro-
cess that concluded in 2012.
The party alternation in ownership of the Executive Power of the State
that resulted from the local electoral process in 2012 also had its po-
litical implications on the direction of the metropolitan policy coordi-
nation. Directly, these implications are expressed in the way that the
formation of the technical29 and advisory30 instances to Guadalajara
metropolitan coordination and, indirectly, decided on the political
commitment of elected local authorities in favor of a particular norma-
tive view urban of the governance supported internationally through
the United Nations for the Human Settlements Program (UN-Habitat)31
which meant a signicant turning point on the process of implementa-
tion of the policy of metropolitan coordination.32
CONCLUSION
The case study focused on the analysis of the trajectory of the metro-
politan coordination policy as for its formulation at the level of the State
of Jalisco as its implementation’s process for the particular case of the
most important in the state metropolitan phenomenon: the Guadala-
jara Metropolitan Area. The case study was proposed as well, to show
the analytical potential of a particular concept of the governance de-
veloped from the perspective of the discipline of public management
29 The political process surrounding the creation of the Metropolitan Planning Institute is mainly
characterized by revolve around the closed political negotiations that provoked the appoint-
ment of its director, which was not free of the characteristics of the various expressions of power
groups tensions within the Institutional Revolutionary Party, long tradition and strong family roots
(Hurtado, 1993).
30 The nal decision of local authorities for the creation of the rst Citizen literally Metropolitan
Council did not take into account the recommendations issued by the Transitional Commission
by the Metropolitan Coordination and rather chose to reduce to a minimum expression the rep-
resentative nature of this gure, with the consequent negative effect that this measure brought
about its potential for innovation in favor of a process of metropolitan governance newly stamp.
31 This fact constituted a concrete expression of the institutional component of the governance
expressed through the system of international public institutions (Aguilar, 2010), whose incidence
is expressed through an international regime with strong regulatory capacity while integrates the
same principles and norms then rules and procedures on decisions and issues relevant to interna-
tional relations between States, which often converge the interests of various actors, as govern-
mental and as non-governmental.
32 Between the scope of the Contribution Agreement signed between the Government of the
State of Jalisco and the representation of UN-Habitat in order to estimate the conditions of Gua-
dalajara from the perspective of urban prosperity driven by the international agency (2012), high-
lights the interest in inuencing on the basis of an eventual Metropolitan Development Program,
one of several planning instruments by the newly created Metropolitan Planning Institute.

80
PhD. Roberto Arias de la Mora
in order to assess their relevance and potential to explain the process-
es of change observed in the metropolitan phenomena of the region
Latin-American.
Obviously the study highlights the specic expression could be ob-
served about the way some of the components of the governance
inuenced the sense of direction and the ability of social direction to
face the challenges of the particular problem metropolitan case of
Guadalajara. However, the analytical potential of the theoretical de-
nition of governance adopted in this paper also identies some nota-
ble absences in the studied case.
At the institutional level the failure of the policy of metropolitan coor-
dination has been evident to inuence on urban planning mechanisms
in force, whose laxity and weak regulatory capacity has led to a grow-
ing trend among property developers to favor the courts33 to settle
quite a few conicts arising from economic activity in real estate, with
the resulting uncertainty and legal insecurity that prevails even today.
The directive inability of municipal governments resulting from the in-
effectiveness of the planning instruments with the observable trend to-
wards greater liberalization34 of the real estate industry came to deto-
nate the urbanistic sprawl of cities in Mexico,35 with consequent effects
negative and social conicts that have already been illustrated by the
denition of the metropolitan problem in the case of Guadalajara.
Finally, it is worth noting that the theoretical denition adopted in this
article is extremely useful to demonstrate, beyond the components of
the governance, the observable trend in how publicly discussed the
many metropolitan affairs that seem to favor more technical aspects
of the governance to the detriment of the sense and orientation of the
aims and objectives that is pursue.
The main lesson to be drawn from the eeting experience around
the Assembly by the Metropolitan Coordination precisely resides in its
ability to focus their advocacy work on precise goals and objectives
and provide guidance that will enable other potential governance
33 Recall that one of the institutional component of the governance has to do precisely with the
system of justice and security, since “the administration of justice and fair, honest and expeditious
administration of justice against crimes and litigation, by prosecutors and judges of state and pre-
ventive and coercive work of the police are essential to our lives unfold in an environment of legal
certainty and stable public safety” (Aguilar, 2010: 46).
34 According to the theoretical concept adopted, the markets are another institutional com-
ponent of the governance to the extent that “it is proven that [...] are the key resource for the
production of wealth in both utilitarian and competitive nature stimulates in various forms produc-
tivity, innovation and therefore prosperity sustained” (Aguilar, 2010: 47).
35 The globalizing market trend obeyed to a fundamental decision almost thoughtlessly from 2000
by the government of the Republic for the purpose of lowering the decit sensible formal produc-
tion of affordable housing.

81
Metropolitan Governance and Management:
The Case of Guadalajara Metropolitan Area
processes and perhaps this is the main feature that
distinguishes it from other civic and social promoters
of a narrower metropolitan affairs bounded capacity
building and social practices calendar movements,
this is a technical level governance.
This tendency to favor the technical level to the
detriment of the sense of more corporate guidance
of the governance, was also clearly observable be-
tween the authorities and civil servants of the case
study, as by means of various technologies to pro-
mote mass transit, the promoting alternative means
of non-motorized mobility, the recovery of public
space through the promotion of recreational and
cultural prevention and control of crime activities as
well as the rehabilitation of degraded areas and ur-
ban facilities.
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85
Metropolitan Governance and Management:
The Case of Guadalajara Metropolitan Area
Constitución Política del Esta-
do de Jalisco publicado en el
Periódico Ocial El Estado de
Jalisco de fecha 1º de mayo
de 2008, número 13, sección III,
pp. 3-7.
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que expide la Ley de Coordi-
nación Metropolitana del Esta-
do de Jalisco aprobado el 11
de diciembre de 2009.
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diente a la Iniciativa de Decre-
to que modica y adiciona los
artículos 35, 50, 80, 81 bis y 87
de la Constitución Política del
Estado de Jalisco, del 30 de
agosto de 2007.
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General de Estudios Legislati-
vos y Acuerdos Gubernamen-
tales de la Secretaría General
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diciembre de 2009.
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He is a PHD of Economics and
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ing on public policy from the
University Center for Econom-
ic and Administrative Scienc-
es (CUCEA) of the University of
Guadalajara. Member of the
National System of Researchers,
Level I. His most recent publica-
tion of 2013 “Democracy and
municipal Public managment”,
he won the rst prize of INAP.

Vol. 1 No. 2 December 2015
86
IS IT POSSIBLE TO GENERATE
SOCIAL CAPITAL WITH
GOVERNMENT ACTIONS?
THE PUBLIC SPACES RESCUE
PROGRAM AND CITIZEN
PARTICIPATION IN WESTERN
MEXICO
Hiram A. Ángel Lara*
Karen Martínez Gallegos**
SUMMARY
This paper analyzes the Public Spaces Rescue Program -Programa de Res-
cate de Espacios Públicos- (PREP) as part of the federal government’s strat-
egy to generate or consolidate social capital within communities, areas or
neighborhoods affected by problems related to violence and criminality, par-
ticularly in the municipality of Zapopan, Jalisco from 2007 to 2012.
First, the experience exposes that social capital is not a resource that
can be generated by government intervention because it can ex-
ist or not prior to it. Second, social capital itself, is not a resource that
eradicates violence and crime conditions in a determined social and
geographical space and third, social capital depends as well on the
group’s interest to organize around a specic goal.
From the perspective of Durston (2001), trust, reciprocity and cooper-
ation are infrequent social assets that are hard to maintain over time
and require constant interaction.
Social Capital, Public Space, PREP.
* Research Professor, University of Guadalajara (U de G), Mexico, coordinator of the Master of
Public Policy at the University of Guadalajara.
** Government Degree in Public Administration and Policy at the University of Guadalajara.

87
Is it possible to generate social capital with government actions?
The Public Spaces Rescue Program and citizen participation in western Mexico
PREP, THE POLICY TO GENERATE
SOCIAL CAPITAL
The context of public spaces1 in Mexico, and their
state of abandonment or deterioration, are consid-
ered as some of the causes to generate and recre-
ate urban violence and insecurity, especially in cer-
tain areas with higher marginalization.
Therefore, according to this situation, the Mexican
government had impulse governmental intervention
to provide security and urban facilities in those areas,
through the implementation of promotion policies for
quality public spaces that will thrust an intensive and
diverse use of these spaces by citizens and that this
contributed to an atmosphere of security and social
cohesion in neighborhoods and cities.
Between 2007 and 2012, the Mexican government
implemented a strategy entitled: “Vivir Mejor” –”To Live
Better”- to contribute to the improvement and care of
the environment. The strategy seek to encourage the
construction of social capital through the Public Spac-
es Rescue Program (PREP), whose objective was to
aid to the enhancement of the quality of life and pub-
lic security through the rescue of public spaces that
had problems of deterioration, neglect and insecurity,
used by the population in poverty in cities and metro-
politan areas. Such actions began in February 2007.
The main perimeter to work in was dened by urban
localities integrated in metropolitan areas and cities
with a population of 50,000 at least, giving priority to
those zones having marginalization and insecurity is-
sues and that could meet certain conditions. Such
requirements are high population density, high crime
rates, having adequate spaces that could lead to a
development of projects allowing multipurpose fa-
cilities for sports, recreational and cultural activities,
and above all, allowing the participation of a Board
of Members to contribute to the operation, continu-
ity of actions and maintenance of the public space
(SEDESOL, 2011).
Among the objectives, it was contemplated that the
benets of the recovery of public spaces reach the
1 Understood as
a meeting place
where anyone has
the right to move
around freely and it
is characterized as
an open space to
and for the proper
exercise of life in so-
ciety. Represents the
ideal place for the
development of rec-
reational, artistic and
cultural activities for
the use and enjoy-
ment of the commu-
nity (SEDESOL, 2010),
since according to
Segovia and Dascal
(2000: 52), must meet
three characteristics:
its public domain, a
collective social use
and what kind of di-
verse activities can
be developed in it.

88
Hiram A. Ángel Lara / Karen Martínez Gallegos
population that was in a 400 meters radius around the
space.
The improvement would take place through the con-
struction or rehabilitation of mistreated or abandoned
sport units, neighborhood centers, public squares, parks,
median strips, cycling tacks, sea fronts and shores (in the
case of the coastal areas), walkways, alleys and pedestri-
an infrastructure.
The program’s operating rules established that the im-
plementation would be based on an ‘inter-institution-
al’ approach, where the Federal, State and Municipal
Government as well as the organized civil society were
part of each of the stages.
It pursued the permanence of the benets the program
would give. The premise of the civil society taking an ac-
tive part of the program, as well as being the fundamen-
tal one, implied the impulse and strengthen of solidarity
and trust networks in the intervened areas, and thereby,
fullling one of the main objectives of the program.
During the implementation period of the PREP (2007-
2012), the program was executed in 18 municipalities
in Jalisco that had urban, marginalization and insecuri-
ty characteristics, dened in the operating rules. In the
case of the Guadalajara Metropolitan Area (GMA), it
was applied in ve of the largest and more important
municipalities: Guadalajara, Zapopan, Tlaquepaque,
Tonala and Tlajomulco.
For the government, relevant results were not associat-
ed with the resolution of problems related to safety and
the impact on new social dynamics that may arise from
better places of convenience, but on the form and the
money spent on the program. In the particular case of
the GMA, the important thing to note was the monetary
amounts invested in the selected spaces intervened.
The prior statement came with a logic that could have
“electoral purposes” in the sense that political decisions
would appear to be motivated by the “visibility” of gov-
ernment actions and exercised resources, rather than
on the true effects of politics to generate new social
dynamics related to social or community organization,
prevention of antisocial behaviors and gender equality
among others. This can be observed in the PREP’s tech-
nical records of the Jalisco Delegation part of the Minis-
try of Social Development.

89
Is it possible to generate social capital with government actions?
The Public Spaces Rescue Program and citizen participation in western Mexico
Table 1. Budget exercised by the PREP in the GMA (2007-2012)
Municipality
2007-2008
Years of Intervention TOTAL COST
2009 2010 2011 2012
Guadalajara San Jacinto
San Jacinto Avenue Be-
tween Javier Mina Street
And Gigantes Avenue.
San Andres
X x x x x X 6,926,782.00
Guadalajara
Paseo de la
Selva Public
Space
Paseo De La Selva Norte
Ct. Paseo De La Selva
Sur Ct.
Plutarco Elías Calles Av.
Santa Cecilia
x x x x 6,072,884.00
Tlajomulco de
Zuniga
Santa Fe
Public Square
and Sports
Court
Stage 13
Chiapas Street
Between Valle De Los
Carpeces St. And Oax-
aca Ct.
Santa Fe
x x x x 2,714,288.00
Tlajomulco de
Zuniga
Del Valle
Community
Center
Brasil Street Between
Peru St. And Colombia
St. Chulavista
x x 3,927,307.00
Tlaquepaque
Santa Maria
Tequepexpan
Recreational
Family Center
Independencia St.
Between
De Las Flores Avenue
And Zaragoza Street
Santa María Tequep-
expan
x x 6,618,898.00
Tlaquepaque
Santa Maria
Tequepexpan
Recreational
Family Center
San Jose Street, Be-
tween San Isidro And
San Odilon
Col. Nueva Santa María
x x x 4,481,722.46
Tonala Rafa Marquez
Sports Center
Las Rosas Street
Santa Isabel x2,976,002.00
Tonala Rio De La Plata
Park
Meteorologia Street
Camichines x x 3,061,488.00
Zapopan
Lomas De
Tabachines
Sports Unit
Paseo De Las
Manzanas Av.
Lomas De Tabachines
x x 4,046,619.00
Zapopan
Laureles
Civic Plaza And
Park
Miguel Gutierrez And
Fernando Banda Streets
Rodeo Blvd And
Espuela Blvd
C. Habitacional
Laureles
X x
3,271,814.00
Source: Selected data based on requested information to INFOMEX

90
Hiram A. Ángel Lara / Karen Martínez Gallegos
As shown in the Table 1, invested amounts may offer little or no evi-
dence related to the objectives of the program. So, to see how effec-
tive was to recover spaces to generate social capital attributes, anoth-
er kind of research was needed, same as the one done for a specic
case in the municipality of Zapopan.
THE FORMATION OF TRUST, RECIPROCITY
AND COOPERATION FROM PREP
One objective of this study was to measure the generation of social
capital from the implementation of a public program, as was the
case of the PREP. To this end, it developed and carried out the survey2
“Building social capital through PREP” on the Sports Unit Lomas de Ta-
bachines (UDLT).
The survey was applied to actual users of the intervened public space
and its purpose was, besides measuring the possible generation of so-
cial capital, to identify as well, issues related to the neighbor’s behavior
expectations based on trust, reciprocity and cooperation and the type
of interactions between users.
Additionally, the participation in groups and social networks was con-
sidered because during the research it was found that, at the time of
implementing social programs, beneciaries also used to recur to its
“capital stock”3
The survey was accompanied by semi-structured, insightful interviews
to UDLT users and the rest of the involved players. Their participation in
the management process, design, implementation, participation and
program evaluation, as well as social their activities would be funda-
mental, which would serve to identify whether the participation of the
residents was related to the PREP intervention or due to other reasons.
Both, the survey4 and the interviews were carried out under the “snow-
ball” technique, given the high costs to survey the population who
should be the beneciary in a 400 meters radius from the PREP.
2 The design of the survey about generating social capital took as conceptual and theoretical
basis Durston (2001) proposal regarding this subject and three other efforts taken to social capital
made by Grootaert, Narayan, Nyhan-Jones and Woolcock (2002), UNDP (2011) and the one de-
signed by Serrano, Alarcon and Tassara (2006). This survey measured the content of certain social
relations, trusting attitudes and reciprocity and cooperative conducts that made possible greater
social benets.
3 This “capital stock” or assignation can be previously generated through non-governmental or-
ganizations and particularly catholic religious associations, since around them is common for peo-
ple to come together to perform various actions and tasks with social impact, which are being
carried out without government intervention.

91
Is it possible to generate social capital with government actions?
The Public Spaces Rescue Program and citizen participation in western Mexico
The rst aspect of the survey referred to the socio-
economic characteristics of the users of the sports
unit. There were identied aspects that had to do
with the gender of users, age, education, occu-
pation, number of years living in the neighborhood
and the distance between their place of residence
and the sports complex. Users answered about their
knowledge of the Public Spaces Rescue Program
as well their participation in it and their motivation
for participating in the program and nally their per-
ception about safety in the neighborhood. Some
important facts about these features are: thirty peo-
ple were interviewed, of which 43% were female
and 57% male. Of these, fourteen were older than
30 years, ten were between 20 and 30 years, ve of
them were aged between 15 to 20 years and one
was under 15 at the time of conducting the survey.
Educational level of respondents was mostly basic and
pre-university (only two of them had completed a col-
lege degree at the time of application of the survey).
Their educational level would seem to relate to their job
performance since, according to the data, 47% were
workers or employed by someone else.
Most respondents (24 out of 30) were people who had
been living in the neighborhood more than 20 years on
average. Regarding the distance between their homes
and the intervened space, 17% lived one block away
at most, 7% around 2-3 blocks, 13% at a distance of 3-5
blocks and 63% to more than 5 blocks away.
4 Once nished designing the questionnaire, it proceeded to dene the sam-
ple to be applied in the survey, which would have a closer look over the
beneciaries of the UDLT population (composed by the residents of “Lomas
de Tabachines” community in a 400 meters radius around the sports unit,
duly established by the rules of operation of the PREP). It considered those
over 15 years (5,307 people) as ‘target population’ for the implementation
of the survey (dened itself by the complexity of the questions involving a
research of social capital generation in a public space). Furthermore, wait-
ing for a 10% response rate, we should get at least 537 surveys to achieve a
statistically signicant sample, but given the economic and time constraints
of this work, we choose to dene the sample using the one described and
referenced by SEDESOL for the internal evaluation of the program. Therefore,
30 surveys were conducted (each one consisting of 34 questions) to users
of the public space (26 of them were made intentionally and 4 by applying
the sampling technique “snowball”) for the period covering September 2013
to March 2014. At this point, it is quite relevant to highlight the difculty of
carrying out the surveys, as a minimum number of neighbors attended to the
public space.

92
Hiram A. Ángel Lara / Karen Martínez Gallegos
In addition to these basic features of the benecia-
ries, it wanted to identify the level of knowledge, par-
ticipation and involvement in the PREP.
As noticed in the next charts, most of the respon-
dents were unaware of the program (Graphic 1) and
neither had actively participated in it (Graphic 2).
GRAPHIC 1. DO YOU KNOW WHAT IS THE
PREP
Yes
20
15
10
5
0
No Do not know / Did
not answered
Source: Selected data based on the survey: “Generación de
capital social en la Unidad Deportiva Lomas de Tabachines”
Yes No Do not know / Did
not answered
20
25
15
10
5
0
GRAPHIC 2. ¿DID YOU OR ANY FAMYLY MEMBER
PARTICIPATE IN THE PROGRAM?
Source: Selected data based on the survey: “Generación de
capital social en la Unidad Deportiva Lomas de Tabachines”
From those who participated in the program (6
out of 30 respondents), 25% said they took park in
developing the detection of needs that dened
the constructed project, 13% in planning activ-
ities, 31% in the workshops that were held 19%
in the evaluation of the program and only 6% in
the resources contribution. We may deduct that
participation was not only poor but also focused
on the services provided by PREP.
It is quite interesting to observe that for users, se-
curity had had small changes. Most respondents
stated that there was a slight increase in security

93
Is it possible to generate social capital with government actions?
The Public Spaces Rescue Program and citizen participation in western Mexico
within the Sports Unit perimeter: ”The security level in
this neighborhood has increased a few since the inter-
vention in this park”(JL, interview).
Although, they recognized were able to pass
through streets that in the past were merely impossi-
ble to do so due to the new lightning and sidewalks,
so they no longer had to surround some streets to
walk by safely. This minor change in the perception
of the safety of neighbors was proven when 1 in 3
knew at least one person who had been a victim
of a crime.
GRAPHIC 3. COMPARING THE NEIGHBORHOOD
BEFORE AND AFTER PREP’S INTERVENTION, HOW
DO PEOPLE FEEL ABOUT THE SECURITY LEVEL?
Has
increased
a lot
Has
increased
a little
Has
remained
the same
Has lowed
down a
little
Does not
know / Did
not ansewer
8
10
12
6
4
2
0
Source: Selected data based on the survey: “Generación de capital
social en la Unidad Deportiva Lomas de Tabachines”
Despite the low variations in perceptions of personal
safety of users or neighbors, when questioned about
their level of satisfaction 11% responded that the re-
habilitation of areas had provided greater security be-
cause the land was no longer an empty useless lot.
The 23% replied that helped improve basic services
promoting the construction of public spaces in the
neighborhood and the 29% said the sports complex pro-
vided them of new spaces for recreation.
Then the 11% stated that it allowed them to get closer
to their neighbors, as activities and workshops promot-
ed by the program, had encouraged them to get to
know and treat each other respectfully.
Finally, the 3% indicated it helped to prevent conicts,
but some neighbors commented that the sports com-
plex was used as a meeting place for youth gangs ha-

94
Hiram A. Ángel Lara / Karen Martínez Gallegos
rassing the community at the time of the survey.
GRAPH 4. IN A MORE PESONAL ASPECT, THE
PUBLIC ESPACE...?
Gave safety
Helped to improve services
Gave new arcas for recreation
Allowed to approach to
neighbors
Helped to solve conflicts
Did not help
Other
6% 11%
23%
29%
11%
3%
17%
Source: Selected data based on the survey: “Generación de capital
social en la Unidad Deportiva Lomas de Tabachines”
The above data pointed us little about the impact of
PREP on trust, reciprocity and cooperation among re-
spondents, all members belonging to the community,
so we proceeded to identify these aspects from gov-
ernment intervention.
BUILDING TRUST
As we established in the rst part of this work, trust is an
attitude based on the expectation of the behavior of
another person, where both are involved in a relation-
ship and where they can generate types of affection
between them (Durston, 2001). Relying on the other,
deposit certainties about reaching objectives that may
have individual or collective benets.
In order to learn more about the formation of trust in
public spaces before and after the implementation of a
government program, the UDLT users were asked about
trust in others, with the following results:

95
Is it possible to generate social capital with government actions?
The Public Spaces Rescue Program and citizen participation in western Mexico
GRAPH 5. ¿DO YOU BELIEVE THAT YOUR
NEIGHBORHOOD PEOPLE TRUST OTHERS?
No, there is
no trust
47%
There is
plenty of
trust
17%
Yes, but there is
little trust
36%
Source: Selected data based on the survey: “Generación de capi-
tal social en la Unidad Deportiva Lomas de Tabachines”
Results from the survey revealed that, only 2 out of 10
people surveyed trusted others, the rest did not or had
very little trust in other people, which shows that the gen-
eration of this value is hard to reach. For those who said
that they trusted, their reasons comprehend the possi-
bility of dialogue, making new friends in the neighbor-
hood, the possibility go to the neighbors in case of prob-
lems or need and it was also possible to borrow money
and create a healthy coexistence between neighbors
(See Graph 6) .
GRAPH 6. WHY IS THERE TRUST?
SE PUEDE DIALOGAR
Y COMPARTIR
2
4
3
1
1
SE HACEN AMISTADES
DENTRO DEL BARRIO
SE PUEDE RECURRIR A
LOS VECINOS EN CASO
DE PROBLEMAS O NECESIDAD
SE PUEDE PEDIR
DINERO PRESTADO A
LOS VECINOS
LA CONVIVENCIA
ENTRE VECINOS ES
FUERTE
Source: Selected data based on the survey: “Generación de capital
social en la Unidad Deportiva Lomas de Tabachines”
* In this question, one individual could have answered afrmatively
to various options.

96
Hiram A. Ángel Lara / Karen Martínez Gallegos
The level of trust for those neighbors, who said they have
it, is due to the kinship between one or more families liv-
ing in the neighborhood, as when forming new families,
these tend to stay close to the homes of their parents.
That is why; two or more families that have some degree
of kinship can inhabit a block.
On the side of those who said they had little trust, rea-
sons were due to the lack of communication between
neighbors, struggle making new friends, low recurrence
among neighbors when facing problems and the tough
issue for neighbors to work in some common activity.
This lack of trust is due to social problems in the observed
in the neighborhood, such as addiction to drugs and al-
cohol, so the neighbors have located people who suffer
from addictions or engage in illegal acts and they get
organized to try to avoid them and protect from them.
For example, one of the strategies they have chosen to
pursue this is the gure of the “watchful neighbor” to pre-
vent home robberies by observing suspicious movements
of strangers in the area, even deciding to make and place
posters with police numbers so that residents can make
anonymous complaints and to prevent such crimes.
In relation to the total lack of trust (1 out of 2 users
found themselves in this situation), the reasons had to
do with social differences, the large number of eco-
nomic needs of the people that motivates the low so-
cialization and the unfamiliarity of the neighbor. Above
all, problems with young people and problems among
neighbors leading to a complicated coexistence.
GRAPH 7. WHY IS THERE NO TRUST?
They are
very
different
socially
9
8
7
6
5
4
3
2
1
0People have
many
economic
needs
People that
improve their
social condition
do not know their
neighbors
Problems
whit the
younger and
among
neighbors
Bad
coexistence
Other
Source: Selected data based on the survey: “Generación de capital
social en la Unidad Deportiva Lomas de Tabachines”
* In this question, one individual could have answered afrmatively
to various options.

97
Is it possible to generate social capital with government actions?
The Public Spaces Rescue Program and citizen participation in western Mexico
As shown in Graphic 7 above, the majority of the
surveyed said that the main problem of distrust be-
tween neighbors is due to conicts with the young
and among neighbors, this is understood by the so-
cial context of the neighborhood with ”barrio gangs”5
who constantly have violent disputes.
The “barrios” are a group of individuals who, by their
similar interests, are looking for a symbol that iden-
ties them as part of a community, such as tattoos,
type of clothes and behavior. This creates a bond of
belonging that reects in a sense of friendship, trust,
cooperation, partnership, etc., and it is this same af-
nity between them the one making the neighbors to
consider them as a threat.
In this sense, a resident believed that “You can do
nothing against a “cholo” as they turn against you,
so you cannot stand up against anyone; even they
are very close with each other, if you do anything to
any of them, then they do something to you, so we
do not engage with them. Among them there is trust”
(MA, interview).
As remarked above, this trust between those who
belong to the “barrios” derives from their own sense
of belonging to a group and it reafrms with their par-
ticipation in the activities promoted by their organi-
zation, which affects the perception of security in the
colony.
Authors like Bourdieu (1985), Coleman (1990) and
Durston (2001) stated that the presence or absence
of trust is product of the interaction with others, be-
cause trust implies a willingness to relinquish the con-
trol of one’s own goods to the other person. Reason
enough to investigate the factors needed to build
trust and found that the most important factors were
the time to meet and treat each other, to have a
public space for social integration and knowing oth-
er people’s friends. Concerning to V.’s opinion -a
surveyed resident- “I think inuences to grow trust
among people seeking a place in which to get to
know others, to spend time, because as no one
knows each other, we only say good morning, good
afternoon” (V ., interview).
Generating trust, in the case of the implementa-
tion of PREP in Lomas de Tabachines, can infer that,
5 Neighbors have
instituted for these
bands the nick-
name of the “bar-
rios”, named after
one of the youth
groups bothering
the community.

98
Hiram A. Ángel Lara / Karen Martínez Gallegos
beyond the actions taken by
the program in favor of forming
bonds of trust between neighbors,
is formed from other factors that
must not necessarily affect a pub-
lic policy, but perhaps other fea-
tures like the time to know each
people and friendships.
However, providing a commu-
nity center such as the UDLT, is
a platform in which can be de-
veloped proper dynamics that
strongly enhance coexistence, in-
terpersonal encounters and con-
icts resolution, which may con-
tribute to the formation of trust ties
within the community without be-
ing decisive. Moreover, insecurity
conditions that affect the neigh-
borhood had seriously under-
mined the creation and strength-
ening of these ties, consequently
a worthwhile form of government
incidence could be the improve-
ment of surveillance and security
conditions.
FORMING
RECIPROCITY
Reciprocity is the second compo-
nent that can be generated by
social capital. This value involves
the exchange of tangible and in-
tangible assets between people,
such as gifts, help or favors. To
make reciprocity happen, needs
an “obligatory and free” trade,
besides the people receiving aid
are committed to the people who
helped them to “return the favor”
-not necessarily in an immediate
or equivalent way (Durston, 2001).
To investigate the factors consid-
ered part of the reciprocity, re-
spondents were requested to an-
swer about the type of help they
would be willing to offer, the type
of people they would help and
their recent helping experiences.
Regarding the type of help they
would be willing to offer, most
neighbors focused their respons-
es on what they call moral help,
in other words, uplifting support
in difcult situations. Other con-
sidered examples of assistance
included to offer car pool to a
specic location or babysitting,
favors made to their neighbors
only sporadically. Also almost 50%
of respondents would be willing to
provide some material or nancial
support, without affecting their
personal assets.
Looking for who respondents
would be more willing to help,
fteen surveyed answered that
those who live on their street, four
would help those living in surround-
ing blocks, seven to those who live
other neighbors and eight said
they would help anyone in need,
even a stranger or a person out-
side the community.
However, when asked about
the number of times people
had resorted to their neighbors
in the event of difculties in the
last month, the results showed
a different attitude, which did
not necessarily reect that they
asked for any type of support.
For example, 70% said that have
never reached out for help from

99
Is it possible to generate social capital with government actions?
The Public Spaces Rescue Program and citizen participation in western Mexico
neighbors, 10% said only about one or two times,
13% about three or four times and 7% have done it
more than ve times.
A sample of reciprocity, although not neces-
sarily based on the neighborliness, is the free of
charge6 “community workshop leaders.”7 These
workshops teach primary school themes to chil-
dren, recycling and art with watercolors lessons
so children can express their emotions. Work-
shops have surfaced some family issues such as
domestic violence, addiction and neglect. Also
in the workshops are taught simple cooking reci-
pes, as many children are alone most of the day
because the parents are away.
L.I. taught these workshops in an area set up
at her own home with her own resources, as she
said: “I put my little room in my house and got a sec-
ond hand board with my resources. When I impart the
recycling workshop I work with the centers of the toilet
paper roll, water caps, cardboard and I charge is 10
pesos per hour. Most of the children come one hour
and I teach them here by playing”(LI, interview).
This female workshop leader’s idea is that some-
one must be willing to work for the community so
that in the medium or long-term the beneciaries
from this work would be able to give back appro-
priate values into their homes and the neighbor-
hood that could lead to a better coexistence.
This specic case is about working with children.8
For the workshop teachers, their efforts will cre-
ate cohesive commitments within the communi-
ty, acts of reciprocity in time.
The characteristics of cooperation
The third component of the social capital reviewed
in this paper has to do with cooperation, understood
as the process that emerges as result of frequent in-
teraction between individuals, which also incentives
the appearance of opportunities to meet and solve
common problems.
This study aimed to know the main motivations of
cooperation and non-cooperation within intervened
6 There is a symbolic
10 pesos recovery
fee.
7 Community Work-
shops Curses, is a
project managed
by ITESO university in
which members of
the community are
trained for 3 months
to teach Math, En-
glish, Spanish, and
values to children
with learning dis-
abilities. Workshops
in Lomas de Taba-
chines were held in
the temple of San
Francisco Xavier by
a teacher who was
about to graduate
from the master of
Educational Psy-
chology.

100
Hiram A. Ángel Lara / Karen Martínez Gallegos
public spaces. To accomplish this goal, rst we queried
among respondents why people do not cooperate to
solve problems in the UDLT. Subsequent results indicat-
ed that most people often focus on their own prob-
lems or complicated to reach agreements between
the community members; and fundamentally, security
is a factor that undermines cooperation as well.
GRAPH 8. PEOPLE DO NOT COLABORATE TO SOLVE PROBLEMS IN
THIS PUBLIC SPACE BECAUSE...
Do not know / Did not
answer...
People only care
about their own problems
24%
People do not reach
an agreement
17%
Problmes get solved whit no
cooperation need
5%
There is distrust among
neigbors
9%
Due to insecurity
19%
I do not have time
7%
I do not care 9%
Other
5%
Source: Selected data based on the survey: “Generación de
capital social en la Unidad Deportiva Lomas de Tabachines”
* In this question, one individual could have answered afrmatively
to various options.
One of the issues related to cooperation or lack of
it, has to do with the kind of “cooperation” that the
respondents would be willing to accept. The majority
of the responses focused on work and time to help,
however it was evident that at least 1/3 of the re-
spondents were not willing to cooperate in any way.
In the eldwork, it was concluded that people are
willing to make commitments with the rehabilitated
public area, therefore they will keep giving main-
tenance to the sports complex as long as there
is reciprocity of the authorities. Respondents said
they would be willing to cooperate if any authority
or neighbor requested their support to participate
in cleaning or painting activities as a benet for the
neighborhood, but they acknowledge that without
constant vigilance in the unit it would be a waste
of time and effort. M.I. declared: “People do not
cooperate to solve the problems of this public area
because they cannot reach an agreement, if they
wanted to take turns to look after the park or give
8 Children in mar-
ginalized neighbor-
hoods tend to have
several doubts in
the classroom that
cannot be claried
by their parents, be-
cause of either igno-
rance or lack of time
due to extensive
working hours in or-
der to reverse some
of the conditions
of marginality and
poverty in which
they are immersed.

101
Is it possible to generate social capital with government actions?
The Public Spaces Rescue Program and citizen participation in western Mexico
maintenance to it, they could do
it”(M.I., interview).
For most of the respondents,
leadership is essential to boost co-
operation, therefore, the absence
of a social leader to launch, en-
courage or invite to participate
in activities and projects for the
neighborhood or any other cause,
limits cooperation.
The convening power of the
leader helps to improve coordina-
tion of stakeholders and this can
lead to better results in the imple-
mentation of projects, as J. L. said:
“People here are peculiar, be-
cause if someone invites them
there is an answer, but there is
no initiative, the example pushes
people. They need someone to
come and tell them, “Hey, let’s
do this, this program helps us with
benets for everyone,” and then
people do respond” (J.L., inter-
view).
Leadership is essential but in this
analyzed case, it was particular, it
was a religious leadership, which
managed cooperation (besides
the relationships established in the
public rehabilitated area) among
the inhabitants of the neighbor-
hood around the celebrations on
the rst Sunday of each month for
the sick in the San Juan Bautista
church.
The group of San Juan Bautista,
who leads the process, provided
the organization. In this event, the
members organized a meal for
the elderly and sick, especially for
those with disabilities or who lived
alone.
All the provided food comes
from the neighbors’ donations, as
mentioned by one of the partici-
pants:
“I have belonged to the group
of San Juan Bautista for approxi-
mately 17 years, since we started
to come together in the parish
community and its construction
was done ... when we have to
do activities of the group in the
church, we get notied in ad-
vance, they tell us the day and
time but it is regularly on Sundays”
(A., interview).
There were also found other types
of cooperation practices inside
the neighborhood, which were im-
pulse prior to the spaces recovery.
This kind of practices were identi-
ed as the communities’ commit-
ments to issue the neighborhood
problems in meeting attended by
nearly 100 people.
Reunions have been tak-
en with the main purpose of
getting the municipal main-
tenance to the sports unit so
the families could use the in-
stallations properly having ad-
equate activities to the young
people. Even though, it has
been looking for a constant
and clearer communication
with police chiefs so they could
provide greater security to the
neighborhood.
Groups participation and social
networks
The surveys’ results, as the con-
ducted interviews inside and out
of the public space, allowed ob-
serving that there was already a

102
Hiram A. Ángel Lara / Karen Martínez Gallegos
level of cooperation among neighbors; it was associated with some
other attitudes that could be interpreted as part of the social capital,
such as trust and reciprocity, the participation inside the groups and
social networks. This was another important reason for the paper’s re-
search: nd out the origin of the already existing forms in the space
before governmental intervention.
It was detected that neighbors were already participating in asso-
ciations such as inhabitants committees, Parents Company, religious
groups (mainly linked to the Catholic Church), workshops, volunteering
and with lesser extent in Organizations of Civil Society (OSC), it was also
found that neighbors participated in politic parties.
GRAPH 9. IN WHAT KIND OG ORGANIZATIONS DO OR DID YOU
PARTICIPATE?
Comité de
colonos
18
16
14
12
10
8
6
4
2
0
Sociedad de
padres de
familia o comité
escolar
Grupo religioso
o congregación
Club de talleres
o manualidades
(costura, repostería,
cocina, pintura,
etc)
Trabajo
voluntario
ONG Partido político Programa
gubernamental
Ninguna
Source: Selected data based on the survey: “Generación de capital social en la Unidad Deport-
iva Lomas de Tabachines”
* In this question, one individual could have answered afrmatively to various options.
To people, participation can be important in diverse objectives and
not only as a mechanism of “voice” (Hirschman, 1977). For example,
to some of the respondents participation could be a vehicle that can
improve home subsistence, and it also helps to better services, the
community life and the conditions of their children’s life:
“I participate in the improvements because they better my life qual-
ity and my neighborhood’s services and house, also because I think
about the future, when I am an old woman I want to walk in my neigh-
borhood, I want to leave a nice place to my children so they can live
well” (L.I., interview).
To others, participation promotes support and help bonds when facing
risk situations, when there is an emergency, the participating people can
trust and expect that associations in which they also work, will provide
help as a reciprocity act. Other impulse sources to the participation are
associated to the hope of security improvement, support to abandon
vices, for amusement and entertaining, feeling good and be useful to
the community or simply to get together with their neighbors:

103
Is it possible to generate social capital with government actions?
The Public Spaces Rescue Program and citizen participation in western Mexico
“Participating in the religious
group is important to me because
I feel good about myself, it gives
me peace and tranquility, we
also support each other, as a
matter of fact I go to the sports
unit with my church friends who I
have known since I was a child”
(M.A., interview).
Some residents, outlook that
youth must be involved in com-
munity service programs so they
could take charge of the devel-
opment of the whole community:
“For me, to participate in these
organizations make me feel use-
ful and I can leave an example
to the new generations to come,
given that social organization can
achieve a substantial improve-
ment on environmental condi-
tions”. (I. interview).
What can be clearly observed
in the results of this investigation
is that participation in neigh-
borhood’s activities have been
barely inuenced by the imple-
mentation of the PREP. Most of
the residents claimed that the
program has just a few or even
no incurrence in the involvement
activities of neighbors to address
problems; the participation level is
the same and occur through the
same channels known by them.
Therefore is very complicated to
state that the PREP has been a de-
terminant factor of the people’s
involvement in public affairs even
those that affect them directly as
security matters.
So far, it seemed that public
programs with a “participative
sense” would not be the ones to
improve people’s commitment to
their own issues and conicts, but
a general participation in gener-
al as it has been happening. In
conclusion, the incidence that
governments would have to gen-
erate social capital based on the
characteristics mentioned here is
blurry and unclear.
CONCLUSIONS
The perception of the respondents
of the standstill or decrease of
the neighbors participation since
the PREP’s intervention, is that al-
though there has been an effort
to incentive the participation and
involvement of the society, de-
sign, implementation and evalu-
ation of the program through the
institutionalized media (such as
the web and the social controller-
ship proposed by the PREP itself)
there has not been a great differ-
ence, due to the lack of resourc-
es for the spaces maintenance
and their deterioration because
of its “abandonment” (due to
negligence or lack of resources) it
is noticed as a slight by the neigh-
borhood participation, this weak-
ens the enthusiasm to participate
in future interventions and the ap-
athy becomes obvious.
In this paper, it was tried to ap-
proach the elements that char-
acterize social capital according
to Durston (2001): trust, reciprocity
and cooperation in a space inter-
vened by governmental action,
this in order to see if the govern-
ment intervention could push or

104
Hiram A. Ángel Lara / Karen Martínez Gallegos
create attitudes of trust, interac-
tions o new bonding or coopera-
tion agreements.
Observing this, there is a little to
say about the government, the
trusting attitudes can be previous
to intervention, for example: in the
observed results, it was detected
that trust is an attitude that is gen-
erated from the neighborhood’s
everyday relationships, at the
same time motivated by kinship,
friendships or simple solidarity to
common causes. It was also ob-
served that trust is cut due to the
difculty of achieving that more
neighbors get involved in any
common activity or because of
the social problems that exist in
the neighborhood that are asso-
ciated to the addictions and an-
tisocial behavior (street violence),
trust is also undermined due to
conicts with the young, among
neighbors and bad coexistence.
In this sense it was also observed
that insecurity has a signicant im-
pact in the potentiation of trusting
others, given that it is reduced to
kinship bonds and friendships that
can happen with close neighbors
(as it was established in the previ-
ous paragraph).
To the respondents it was im-
portant that good coexistence
was incentivized by the creation
of public spaces (both objectives
are intended to reach through
PREP), however they require addi-
tional actions such as crime pre-
vention and the provision of pub-
lic safety by the municipal police,
apart from attending addiction
problems among the younger.
Regarding reciprocity, the sur-
vey data reveal that the major-
ity of the respondents would be
willing to help their neighbors in
a moral way, as it was stated be-
fore, this may be due to the neigh-
bors similar economic situation so
it makes impossible the disposition
of monetary resources to help or
support anybody else.
Another important aspect is that
reciprocal actions are limited by
distance among neighbors, in oth-
er words, the respondents point-
ed they would be willing to help
those that live closer and have
previously known, that is why the
reciprocity expectation is high as
they say they would expect their
neighbors to help in case there is
some unfortunate event.
On the other hand the collab-
oration among neighbors for the
resolution of conicts facing dif-
culties such as lack of interest
in common problems, lack of
agreements among neighbors
and insecurity. The respondent
versions say that this is due to an
absence of a leader (with con-
vening power and proactive) that
encourages other inhabitants to
be co-responsible solving conicts
and needs, it does not matter if
the leaders come from a social or
religious eld or from a neighbor-
hood organization.
That is why the formation and
identication of community lead-
ers is required so they can work as
social articulators to mobilize and
organize efforts to improve the
community social conditions and
seek participation and shared re-

105
Is it possible to generate social capital with government actions?
The Public Spaces Rescue Program and citizen participation in western Mexico
sponsibility between civil society
and government. It is more prob-
able that cooperation becomes
real through these leaderships.
Regarding cooperation in social
groups and social networks, it was
observed that the respondents
that participated in organizations
did it essentially in the religious
kind and that participation in no
governmental organizations was
due to the satisfaction and the
benet the community obtains
when they get involved, however
the dedicated time to the partic-
ipation is limited by personal re-
strictions.
The ndings allow to point gov-
ernmental social programs that
pretend to be implemented and
must involve beforehand the
neighbors’ acknowledged lead-
ers, and the organizations that al-
ready exist inside the community
as they are an important “social
capital stock” and count on rec-
ognition and social support of the
participants and the neighbors.
This facilitates participative neigh-
borliness collaboration to validate
governmental actions and allows
to motivate the formation of new
leaders through time, which could
impact in a signicant way in the
neighbors life in similar marginality
conditions.
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107
Vol. 1 No. 2 December 2015
REFRAMING THE
“RULES OF THE GAME”:
THROUGH GOVERNANCE,
TRANSPARENCY AND FISCAL
RESPONSIBILITY
Eneida Torres de Durand*
Rafael Durand Aldea
Saúl Pratts Ponce de León
Alba López Arzola
César Sobrino
Mari Glory González
Ramón Torres Morales
ABSTRACT
This article provides an overview of the key research ndings of the
study on Fiscal Responsibility performed by the Center for Public and
Corporate Governance. The study places emphasis on the role of
governance practices and scal results; transparent and open gover-
nance; the capabilities of public institutions; the legal and regulatory
framework; proper alignment between strategic planning, budget for-
mulation and evaluation; the transparency and accountability of pub-
lic affairs and, the economic development of Puerto Rico. The aim of
the study is to analyze the government of Puerto Rico’s scal and eco-
nomic practices in the context of governance, with special emphasis
on the following variables: scal policy, economic policy, government
budget revenues and expenditures, budget results, public debt and
the Gross Domestic Product (GDP), Gross National Product (GNP) and
economic development. The study was conducted by: Eneida Torres,
Rafael Durand, César Sobrino, Mari Glory Gonzalez, Alba López, Saúl
Pratts and Ramón Torres.
*The authors of this article are researchers of the Center for Public and Corporate Governance at
Universidad del Turabo gobernanza.ut.pr

108
Eneida Torres de Durand / Rafael Durand Aldea
OVERVIEW
As Puerto Rico confronts the chal-
lenge of addressing its scal crisis,
it must consider the root causes
of weak governance, lack of s-
cal responsibility, and poorly func-
tioning public sector institutions.
Given the complexity and depth
of the challenge, the agenda for
the next decade will be to foster
a comprehensive reform strategy
and focus on the necessary con-
ditions for economic competitive-
ness, sustainable development
and prosperity.
This article provides an overview
of the key research ndings of the
study Fiscal Responsibility by the
Center for Public and Corporate
Governance. The study places
emphasis on the role played by
governance practices and s-
cal results; transparent and open
governance; the capabilities of
public institutions; the legal and
regulatory framework; proper
alignment between strategic
planning, budget formulation and
evaluation; the transparency and
accountability of public affairs
and; the economic development
of Puerto Rico.
Over the past decades gover-
nance, transparency and scal
responsibility have been some of
the most critical issues facing sus-
tainable development in countries
around the world. Governance,
has been dened as a system of
values, policies, and institutions
by which a society manages its
economic, social, and political
affairs through interactions within
and among the state, civil society
and the private sector. It com-
prises mechanisms and processes
so citizens and groups articulate
their interests, mediate their dif-
ferences, and exercise their legal
rights and obligations. It is the rule
of law, institutional capacity, and
practices that set the boundaries
and provide incentives for individ-
uals, organizations and the busi-
ness sector.
Three actors are involved in gov-
ernance: the State, which creates
a conducive political and legal
environment; the private sector,
which generates jobs and income;
and civil society, which facilitates
social and political interaction.
The essence of governance is to
foster interaction between these
three types of actors to promote
people-centered development.
Good governance refers to the
question of how a society can or-
ganize itself to ensure equal op-
portunities and equity (social and
economic justice) for all citizens
(UNDP 2000).
The study establishes that over
the past four decades public trust
in Puerto Rico’s government has
fallen dramatically due to a “per-
fect storm” of contributing factors:
(1) government has failed misera-
bly to respond adequately to the
crisis and generate long term solu-
tions to the problems affecting PR
citizens; (2) a pervasive scal cri-
sis; (3) persistent scandals have
shaken the foundations of public
administration; (4) poor quality of
services; (5) lack of political will,
politicians reluctance for activat-

109
Reframing the “Rules of the Game”:
Through Governance, Transparency and Fiscal Responsibility
ing transparency and accountability principles and
practices, and virulent political inghting.
The study proposes that open and transparent
governance can generate trust among the various
stakeholders and promote appropriate measures to
develop alignment among the various economic
variables: reducing inequality and inuencing favor-
ably, through scal public policy and private invest-
ment, the distribution of wealth and the creation of
social capital to promote the necessary reforms to
move forward economic competitiveness, sustain-
able development and prosperity in Puerto Rico.
The aim of the study is to analyze the government
of Puerto Rico’s scal and economic practices in the
context of governance, with special emphasis on
the following variables: scal policy, economic poli-
cy, government budget revenues and expenditures,
budget results, public debt and the Gross Domestic
Product (GDP), Gross National Product (GNP) and
economic development. The research study also ex-
plores and analyzes the legal and regulatory frame-
work related to scal responsibility, and its core pillars
of transparency and accountability of public actors
and institutions, recognized as best practices for s-
cal responsibility and good governance. The study
found that in the last four decades the government
of Puerto Rico has been under pressure to respond to
the demands of its citizens and to restructure policies,
capabilities, and scal resources to effectively inte-
grate Puerto Rico into the world economy.
The literature of governance has gained relevance
in public administration studies. One of the main con-
tributions has been its connection with economic
competitiveness, prosperity and citizens well being. In
today’s “ecosystem” of governance, 1 transparency
and access to public information plays a pivotal role
in building a government capable of meeting social
needs, open to public scrutiny, with a high level of
accountability and scal responsibility on the part of
public ofcials, and the participation of non-govern-
mental components and civil society in the design
and evaluation of public policy.
When examining the situation of Puerto Rico the
study found that there is broad consensus in various
1 The term “ecosys-
tem” in the biolog-
ical eld refers to a
natural system con-
sisting of a set of liv-
ing and interdepen-
dent organisms that
share the same hab-
itat. The concept
is metaphorically
used in the context
of governance to
highlight the bene-
ts of using network-
ing schemes and
associations of indi-
viduals, businesses
and organizations.
The “ecosystem” of
governance can
generate responses
to public problems
(economic, scal
and social) through
multidisciplinary ap-
proaches and deci-
sions that translate
into better results
with added value
for society.

110
Eneida Torres de Durand / Rafael Durand Aldea
sectors of society that the island is lagging in good
governance, processes and systems that set the stan-
dard for economic competitiveness and sustainable
development. Some manifestations of this failure in-
clude a weak legal and institutional framework; the
continuity of an obsolete economic model; the lack
of transparency and accountability; the hierarchical,
centralized, bureaucratic government model; the
lack of quality in the provision of public services; and
a deteriorated political system and lack of political
will to tackle the reforms needed to move forward
the sustainable development of the Island.
In the last decade transparency has received con-
siderable attention from both policy makers and re-
searchers. Transparency is a concept widely used in
the scal context, measuring the level of efciency
and effectiveness of public expenditure and promot-
ing the democratization of the budgetary processes.
Transparency promotes awareness to those affected
by scal measures not only of the resulting gures, but
also of its scal policies, mechanisms and processes.
A study on The State of the Legal and Regulato-
ry Framework of Transparency and Accountabili-
ty in the Government of Puerto Rico performed by
the Center for Public and Corporate Governance
(CGPC, 2013) concluded that Puerto Rico still lacks
legal or formal mechanisms regarding transparency
and accountability requiring ofcials to disclose rele-
vant information on government performance and
results. This absence contributes signicantly to the
level of actual and perceived transparency.2 Without
transparency in public administration (both formal or
legal /real or perceived) accountability cannot ef-
fectively operate. The obligation of public actors is
to assume responsibility for their actions in managing
the affairs entrusted by citizens. It is vital to promote
a transparent and accountable government able to
make decisions for the common good and that it´s
actions are efcient, effective and ethical as possible
(CGPC, 2013).
The concluding remarks of the research study on
transparency and accountability stresses that:
2 It refers to the ac-
tual access to public
information and the
opportunity for citi-
zens to participate
effectively in gover-
nance, which is irre-
spective of the legal
framework.

111
Reframing the “Rules of the Game”:
Through Governance, Transparency and Fiscal Responsibility
“The practice of transparency in government, that is, to make
accessible and understandable all public matters to ordinary
citizens, should lead to greater scal responsibility on the part
of ofcials [...] and greater efciency and effectiveness in the
use of public resources. It should also drive citizens to become
watchdogs of the actions and decisions of government and
strengthen citizen participation in decision-making and the for-
mulation of public policy. [...].
Accountability therefore, must be understood within the context of
management (administration) of results, having a public manage-
ment that promotes compliance with government goals and strategic
objectives. Accountability encourages focus on the quality of pub-
lic services and meeting the specic needs of citizens. Government
components are centered in obtaining measurable results, disclo-
sure to citizens and effective use of public resources. This is achieved
through the formulation of strategic plans including long terms goals
and measurable objectives, implementation plans and periodic re-
sults reporting along with full disclosure mechanisms “.
However, it is well known that Puerto Rico faces a series of circum-
stances that adversely impact the governance of public affairs, pro-
cess through which government institutions conduct matters of com-
mon interest, manage public resources and guarantee the attainment
of human rights (UN, 2006). The profound crisis of the last decade has
exposed the government’s inability to maintain economic stability and
generate results that promote sustainable development, economic
competitiveness and social well-being.
Concerning the political system, José Joaquín Villamil (2013) states that
in Puerto Rico there is a marked “institutional gap” with considerable po-
litical ruptures. Politics has become the mechanism to support a system
that has transferred the capacity for innovation and management of
the Island to federal agencies (which by denition have a limited scope).
The political class has become a privileged economic class. Staying in
political power has been the source of personal wellbeing (the political
party and their relatives), which has relegated the general welfare of
Puerto Rico. 3
The political rupture is also evidenced by the growing dissatisfaction
and disillusionment of citizens with regard to politicians and political
parties in general that do not demonstrate long-term vision, causing
3 Villamil, J. Cometary the presentation of the book Una Nueva Gobernanza para Puerto Rico ,
March 13, 2013, Universidad del Turabo, Caguas,
Puerto Rico. Available in: http://www.suagm.edu/ut_pr/gobernanza/pdfs/Resena-Presentacion.
Libro-Una.Nueva.Gobernanza.PR.pdf

112
Eneida Torres de Durand / Rafael Durand Aldea
lack of credibility and condence
in the system and alienation from
the political scenario. This makes
the political process a poor indi-
cator of social preferences and in
fact only certain groups advance
their agendas through the politi-
cal system.
Another indication of the gov-
ernment’s inability to accomplish
its purpose is its commitment to a
public administration paradigm
that for the past decades has
created a bureaucratized and in-
effective structure to meet social
and economic needs. Elected of-
cials have exercised an almost
autocratic role in generating re-
sponses and decision-making of
public affairs without obtaining
the desired results in the public
interest. The lack of integration of
diverse social actors in the search
for solutions to the problems fac-
ing Puerto Rico has hindered fur-
ther development and effective
management of public long term
economic and scal policies.
Similarly, in Puerto Rico signi-
cant commitment to the econom-
ic development model of the 50s’
which focused on industrialization
and essential conditions (cheap
labor, access to the US market,
and federal and state tax incen-
tives) that are virtually nonexistent
today. Furthermore, there is signif-
icant dependence on foreign in-
vestment capital (mainly from the
US) whose production is basically
for export and its relationship with
the rest of the Puerto Rican econ-
omy is minimal (Ruiz, 1982).
The island demonstrates a sub-
tancial decit in the quality of
governance to the extent that
it cannot effectively guaran-
tee the constitutional right to
free public education, at prima-
ry and secondary level, and the
advancement of human devel-
opment (quality education), nor
the achievement of aspirational
rights such as housing, adequate
nutrition, suitable medical care,
among other social protection
and access to justice rights.
The United Nations Develop-
ment Program (UNDP, 2008) has
stated that the institutional ca-
pacity of government depends
on the administrative capacity
and its ability to integrate and net-
work with various actors in society
and citizens towards solving prob-
lems, as its management structure
alone is not enough to advance
the necessary reforms. Institution-
al capacity fosters effective and
efcient actions that repeat over
time, and bring about manage-
ment transformation. At one level
capabilities manifest as effects,
impacts or outcomes. At a sec-
ond level capacities are drivers
of change (strategic leadership,
knowledge, human resources skills
and mechanisms of accountabil-
ity). The activities at this level are
reected in products (outputs).
A priori, factors which mainly con-
tribute to the decit in the quality
of the management of public af-
fairs in Puerto Rico are the lack of
institutional capacity to perform
functions, solve problems, dene
and achieve objectives in a sus-
tainable manner and lack or abdi-

113
Reframing the “Rules of the Game”:
Through Governance, Transparency and Fiscal Responsibility
cation of political will. Political will,
implies the desire to resolve public
problems and improve social con-
ditions through democratic politics
and the institutions that dene it.
Refers to take action to create
the changes expected by groups
and stakeholders. It is to observe
and enforce the rules, agendas
and commitments above parti-
san and personal interests or the
convenience of public actors and
create conditions for change as
expected by society.
In the words of Ko Annan, sev-
enth Secretary General of the UN
during the period 1997-2006:
The will of the people
must be the basis of gov-
ernment authority. This is
the foundation of democ-
racy. This is the founda-
tion of good governance,
which will give every citizen
... A real and lasting role
politically, economically
and socially in the future of
their societies.
Reecting on the reality of Puerto
Rico in the context of governance
it is evident that the Island nds it-
self in a paradox and a crossroad.
On the one hand, governance
is essential to promoting good
governance and advance a sus-
tainable development agenda;
whereas, policy makers and pub-
lic administrators seem to avoid
at all costs the strategies and
processes that advance a reform
and transformation agenda4 The
apparent inability of public actors
to undertake a new road towards
good governance with new and
varied forms of social interaction
makes it necessary to strength-
en the partnership between the
government, the private sector,
non-governmental and civic inter-
est groups to push forward collec-
tively determined solutions to the
4 Last year the Center for Public and Corpo-
rate Governance law has driven without suc-
cess in this direction. In particular, has driven
the Draft Law on transparency, access to infor-
mation and accountability in governance as
an effort to establish the public policy of the
Government of Puerto Rico in this eld and
regulate the principles for implementation; to
recognize the right to public information as
one critical and autonomous and establish
procedures to ensure the effective exercise of
this right; to establish public policy regarding
the regime or system of exceptions to the dis-
closure and right of access to information; to
provide mechanisms for the establishment of
strategic planning and performance measure-
ment of public programs and the dissemination
of results and impacts of public administration,
among others. The intention to move this bill,
which was the result of the rst research proj-
ect of the Center for Governance, has been
to strengthen transparency and accountabil-
ity in governance Puerto Rican, through an
integrated and coherent legislation allowing
ordinary citizens to know governance, have
the relevant information and strengthen pub-
lic condence in public institutions based on
the knowledge of its operation and the re-
sults obtained for the work they perform their
ofcials. The ultimate goal is to guide public
action to serve the specic needs of citizens,
according to the principles of legality, efcien-
cy, effectiveness, economy, speed, simplicity,
accessibility, timeliness, consistency, transpar-
ency, good faith, honesty and accountability
accounts, among other relevant principles.
The Bill was articulated in consideration of the
importance of education, prevention, action
and nally the disclosure of the specic con-
sequences of non-compliance with the rules of
transparency, access to information and ac-
countability. All this initiative was intended to
lay the foundations of budget transparency as
a sine qua non for it to operate effectively sur-
render and relevant accounts in which citizens
participate of government work.

114
Eneida Torres de Durand / Rafael Durand Aldea
pressing problems facing Puerto
Rico and ultimately the satisfac-
tion of social needs.
FISCAL
RESPONSIBILITY AND
ECONOMIC
PERFORMANCE:
PR’S LANDSCAPE AT
A GLANCE
The fundamental premise is that
economic and scal performance
of a country is inuenced by fac-
tors such as the ability of public
sector administrators, the various
functions of public spending and
the scal structure through which
the public sector is nanced. A
look at prior scal results of Puer-
to Rico in the past years shows
continued scal negligence on
the part of the public actors who
formulate the annual income and
expense budget, a signicant in-
crease in public spending, a per-
sistent scal decit and a high lev-
el of borrowing. Recognizing these
circumstances, Puerto Rico is
challenged to achieve long term
scal sustainability and to recover
sustained economic growth.
The study on Fiscal Responsibili-
ty emphasizes the role played by
scal practices and outcomes;
transparent and open gover-
nance; the capacity of public
institutions; the legal and reg-
ulatory framework; proper co-
ordination of planning, budget
formulation and evaluation; trans-
parency and accountability of
public affairs and interactions
through which this affects scal
policy and economic develop-
ment. This perspective suggests
that an open and transparent
governance can generate trust
among the various stakeholders
and introduce appropriate mea-
sures to promote balance among
the various economic public pol-
icy variables; reducing inequality
and inuence favorably public
investment through scal policy;
while generating an impact on
private investment, distribution of
wealth and the creation of social
capital for reforms (CEPAL, 2007;
IMF, 2013; ILPES, 2006).
During the past two decades, in-
ternational organizations such as
the International Monetary Fund
(IMF), the International Budget
Partnership (IBP), the Organization
for Economic Cooperation and
Development (OECD) and the
World Bank (WB), have supported
efforts to increase transparency,
accountability, scal responsibility
and participatory budget proto-
cols which have been identied
as important to cope with the -
nancial crisis (IMF, 2013; IBP 2015;
OECD 2005).
Fiscal transparency is part of a
broader notion of transparency or
access to information in the pub-
lic sector. Transparency has two
distinct dimensions: rst, access
to information about the process-
es and procedures by which the
public sector makes and imple-
ments decisions; and second, ac-

115
Reframing the “Rules of the Game”:
Through Governance, Transparency and Fiscal Responsibility
cess to information generated, owned and used by
the public sector.
Fiscal transparency is important because it allows
citizens and nancial markets to accurately assess
the government’s nancial position and the true costs
and benets of government activities, including pres-
ent and future economic and social implications”.5
Disclosure of scal information reduces market risks
and asymmetries of information allowing markets to
function more efciently. By enabling accountabili-
ty for public spending, scal transparency can also
reduce duciary risks and improve efciency and ef-
fectiveness of public spending. Cross-country analy-
ses have shown that countries with more transparent
public nances display better scal discipline, a low-
er perceived level of corruption, better credit ratings
and lower public sector borrowing costs.6
In recent years, transparency has become an in-
tegral part of a broader good governance agenda
pursuing to achieve improvements in accountability,
institutional capacity and government performance.
The term is also used in reference to the develop-
ment and administration of a balanced budget in
which operating expenses do not exceed revenues.
It is related to the commitment of government of-
cials to act with prudence in public spending and to
maintain a balanced budget.
Fiscal responsibility is dened as the state’s commit-
ment to generate the revenue needed to operate
the government apparatus without imposing an un-
sustainable burden on citizens and the obligation to
prudently manage public resources. The term is also
used in reference to the development and adminis-
tration of a balanced budget in which the operat-
ing expenses do not exceed revenues. It is related to
the commitment of government ofcials to act with
prudence in public spending and to maintain a bal-
anced budget.
According to the research ndings, the necessary
institutional capacity to solve the problems facing
Puerto Rico depends on both the design of coher-
ent public policies, administrative, legal and scal
capacity and the political authority (the ability to in-
tegrate and interact with various social actors and
5 George Kopits and
Jon Craig (1998)
Transparency in
Government Opera-
tions, IMF Occasion-
al Paper 158.
6 Farhan Hameed
(2005) Fiscal Trans-
parency and Eco-
nomic Outcomes,
IMF Working Paper,
WP/05/225.

116
Eneida Torres de Durand / Rafael Durand Aldea
citizens), as the government structure alone is not
enough to advance the necessary reforms.
The most relevant scal performance outcomes of
Puerto Rico found in the research includes: a scal
decit of unsustainable levels; poor budget formu-
lation and execution, accompanied by noticeable
discretionary public spending; a lack of accountabil-
ity by public policy makers and public actors; lack of
reliable and accessible scal information, and lack
of coordination between strategic planning, budget
formulation and execution and managing for results.
Over the past decade or so there has been growing
evidence that the best way to improve the allocation
of public nances is through budget systems that are
transparent, open to public engagement and scru-
tiny, and that have robust oversight institutions and
mechanisms. (OECD 2005,2002, IMF 2003, 2013). Re-
search commissioned by the IBP nds that, after con-
trolling for various economic variables, countries with
higher levels of scal transparency have higher credit
ratings and lower spreads between borrowing and
lending rates, thus reducing governments’ borrowing
costs.7 Even for countries with similar credit ratings,
higher transparency is associated with lower spreads.
An International Monetary Fund (IMF) study found
that an important predictor of a country’s scal cred-
ibility and performance is the level of transparency in
its public nance system and practices. In looking at
the recent global economic crisis, the IMF study attri-
butes almost a quarter of the unexpected increases
in government debt across the countries studied to
a lack of available information about the govern-
ment’s scal position.8 In other words, opacity in scal
matters contributes signicantly to the suffering being
felt directly by the citizens of the crisis-stricken coun-
tries in Europe.
The new evidence on the impact of budget trans-
parency and accountability indicates that: Transpar-
ency can help attract cheaper international credit;
Opacity in scal matters can undermine scal dis-
cipline; Transparency and public participation can
help shine the light on leakages and improve ef-
ciency in public expenditures and Transparency and
public participation foster equity by matching na-
7 See http://in-
ternationalbud-
get.org/wp-con-
tent/uploads/
IBP-Working-Pa-
per-1-Budget-Trans-
parency-and-Finan-
cial-Markets.pdf.
8 See http://inter-
nationalbudget.
org/wp-content/
uploads/IMF-Fis-
cal-Transparen-
cy-Accountabili-
ty-and-Risk.pdf.

117
Reframing the “Rules of the Game”:
Through Governance, Transparency and Fiscal Responsibility
tional resources with national priorities.
Given such evidence, and the current scal environment, it is not
surprising that there is a growing international consensus among gov-
ernments, civil society, and other public nance and economic de-
velopment actors on the need for greater budget transparency and
accountability. This consensus has spurred several global, multistake-
holder initiatives to promote open and accountable governance.
Notwithstanding, in Puerto Rico there is no genuine commitment to
comply with the constitutional provision that public spending should
not exceed tax revenues in order to attain a balanced government
budget. The study highlights that in 1999-2012 the government exceed-
ed the amount budgeted for spending by $ 6.8 billion, while, revenues
were overestimated by a total of $ 4.7 billion. The persistent practice
of underestimating expenses and overestimating revenues is a high-
ly negligent scal practice allowed and encouraged by the lack of
openness, transparency and access to relevant, accurate information
understandable to the public during the budget formulation and exe-
cution process (See Table1);
TABLE NO. 1 BUDGET OF INCOME VS. COLLECTIONS
Budgeted income vs. collection levels of the executed budget
Fiscal Year Budgeted Collected Difference %
1999 6703 6540 (163) (2.4)
2000 7043 6877 (166) (2.3)
2001 7490 6745 (745) (10.0)
2002 7342 7186 (156) (2.1)
2003 7554 7341 (213) (2.8)
2004 7771 7834 63 0.8
2005 8144 8603 459 5.6
2006 8699 8423 (276) (3.2)
2007 9065 8718 (347) (3.8)
2008 9104 8207 (897) (9.9)
2009 9340 7583 (1757) (18.8)
2010 7512 7593 81 0.6
2011 7933 7994 61 0.7
2012 8522 8573 51 0.6

118
Eneida Torres de Durand / Rafael Durand Aldea
Figure1. Budget of Income vs. Collections
Table 2. BUDGET OF INCOME VS. COLLECTIONS
Fiscal Year Budgeted Collected Difference %
1999 4530 4430 (110) (2.4)
2000 4952 4887 (115) (2.3)
2001 4755 4778 18 0.4
2002 6908 8542 1634 23.7
2003 7187 7366 179 2.5
2004 7537 7942 405 5.4
2005 8128 8908 780 9.6
2006 8419 9461 1042 12.4
2007 8511 8786 275 3.2
2008 8458 8809 351 4.1
2009 8840 9927 1087 12.3
2010 9582 9640 58 0.6
2011 2949 9075 126 1.4
2012 9081 9911 830 9.1

119
Reframing the “Rules of the Game”:
Through Governance, Transparency and Fiscal Responsibility
Real
Budgeted
Figure 2. Budgeted Expenses vs. Expenditures
The continuous budget decits have led to yearly
budget insufciencies nanced through loans, de-
cisions that were not adequately disclosed to the
public. Balancing budget decits with borrowing
and constantly renancing debt close to maturity
increased the total public debt from 1972-2013 from
$ 2.6 billion to $ 70 billion, the latter being greater
than the current Puerto Rico GNP. The enormous in-
crease in public debt is also due to the use of an ex-
tra-constitutional nancing mechanisms which today
represents 85% of total public debt or approximate-
ly $59.4 billion. Of this amount $25.6 billion has been
generated by public entities and corporations.
From 1999 to 2012 the central government trans-
ferred to public entities and corporations close to
$15.0 billion of their already limited funds, as most
of these do not generate enough revenue to cover
their operational costs. These fund trans“The contin-
uous budget decits have led to fers have seriously
worsened the fragile scal poyearly budget insuf-
ciencies nanced through sition of the government
of Puerto Rico (See Taloans, decisions that were not
adequately ble 3; Graphic 3; Table 4; Table disclosed
to the public”. 5)

120
Eneida Torres de Durand / Rafael Durand Aldea
TABLE 3. INCREASE IN PUBLIC DEBT 1972 - 2013 ( BILLIONS )
Fiscal Year Public Debt % In-
crease GNP
Public /
GNP
Debt
1972 $2596 -5,768 45%
1976 $5587 115.00% 7,550 74%
1984 $8693 56.00% 14,183 61%
1992 $14336 65.00% 23,696 60%
2000 $25284 76.00% 41,827 61%
2004 $37434 48.00% 51,827 72%
2008 $53393 43.00% 62,703 85%
2012 $69948 31.00% 68,698 102%
2013 $70043 0.14% 70,740 99%
80,000
1969 - 1972
1973 - 1976
1977 - 1984
1985 - 1992
1993 - 2000
2001 - 2004
2004 - 2008
2009 - 2013
70,000
60,000
50,000
40,000
30,000
20,000
10,000
0
Periodo
Deuda Pública (Billones)
Figure 3. Increase in Public Debt

121
Reframing the “Rules of the Game”:
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TABLE 4. DISTRIBUTION PR PUBLIC DEBT
(IN MILLIONS) JUNE 30, 2013 (BGF, 2013)
Nature of Debt Ouantity % Observations
General Obligations $10,599 15.2 Guaranteed with
General Found
Debt Guaranteed by
the Commomwealth 5,634 8
COFINA 15,224 21.7 Guaranteed by tax
collections
Corporations and
Public Agencies 25,575 36.5
Guaranteed to
revenues generated
by corporations and
public agencies
Municipalities 3,882 5.6 Guaranteed by pro-
perty taxes
Other 9,129 13
Total: $70,043
TABLE 5. TRANSFERS FROM THE GENERAL FUND TO ENTITIES
AND PUBLIC CORPORATIONS (IN THOUSANDS) 1999-2012
Year Quantity
1999 $1,643,557
2000 1,803,020
2001 2,030,523
2002 583,809
2003 677,214
2004 980,681
2005 808,797
2006 936,617
2007 921,373
2008 514,492
2009 1,100,289
2010 *1,071,259
2011 1,071,259
2012 991,303
Total: $15,062,934
In some instances the central government has funded the scal de-
cits of public entities and corporations with the intention of postpon-
ing increases in the costs of the services provided by such entities. This
practice has hindered the urgent transformation of public entities and
corporations into highly efcient and effective institutions.

122
Eneida Torres de Durand / Rafael Durand Aldea
The ndings of the research analysis regarding the eco-
nomic policies of the past four decades reveals that the
development strategy based on foreign direct invest-
ment (FDI) has created a signicant difference between
GDP and GNP. For the past 50 years, Puerto Rico´s GNP
- GDP ratio has decreased while this ratio for the United
States has remained stable. This means that the income
produced on the island is much higher than the income
received suggesting that federal transfers from the Unit-
ed States have not offset the benets of US companies
and the granted tax exemptions (See Graphic 4).
Similarly, the results of the Granger-Wald test Modied,
Toda and Yamamoto (1995) indicate that in the line.
120
110
100
90
80
70
60
50 55 60
US Puerto Rico
65 70 75 80 85 90 95 00 05
Figure 4. GNP-GDP ratios: USA and Puerto Rico
Short term the scal decit has caused a deterioration
in the current account of Puerto Rico. This is corrobo-
rated by using scal spending instead of scal decit.
In other words, increases in government spending have
also worsen the current account. One of the reasons for
Puerto Rico´s current account position is its primary de-
cit (See Graphic 5). A persistent current account decit,
with a stagnant economy and a level of debt of in ex-
cess of 100% of GNP, worsens over time the repayment
capacity of the public debt of Puerto Rico leading to

123
Reframing the “Rules of the Game”:
Through Governance, Transparency and Fiscal Responsibility
potential insolvency and worsens the present conditions and future of
the population. This situation is exacerbated by cost increases in the
economy such as energy costs, bureaucratic costs and the effects of
the Jones Act (see Table 6).
.0
-.1
-.2
-.3
-.4
-.5
50 55 60
Current Account-GNP (Left-hand side)
Fiscal Surplus -GNP (Right-hand side)
65 70 75 80 85 90 95 00 05 10
-.08
-.10
-.12
-.14
-.16
-.18
Figure 5. Fiscal Account -GDP and current account GDP (1950-2011)
Less private investment (gross capital formation) less government spend-
ing minus the change in stocks. The tax bill is direct taxes less government
consumption. Data obtained from the website of the Planning Board.
TABLE 6. GRANGER CAUSALITY TEST -WALD MODIFIED
Excluded Variables
Dependent variable Fiscal Account - GNP Current acount - GNP
Panel A)
Fical Account - GNP -------- 0.02
Current account - GNP 6.08* --------
Fiscal Expenditure - GNP Current account - GNP
Panel B)
Fiscal Expenditure - GNP -------- 0.03
Current account - GNP 7.75** --------
Critical Values of Chi-square
Degrees of freedom (1)
5% 3.841
10% 2.706

124
Eneida Torres de Durand / Rafael Durand Aldea
The manufacturing structure of
Puerto Rico is very fragile affect-
ing its short and long term perfor-
mance. The persistently negative
current account makes Puerto
Rico a net debtor, in need of cap-
ital (longterm or external funding)
to fund private and public con-
sumption, and private investment.
Econometric evidence, apart from
the weak manufacturing structure
and the effects of the Jones Act,
indicate that the main determi-
nant of this persistent external de-
cit is the scal decit. A persistent
current account decit with a
stagnant economy worsens over
time its ability to repay its debt.
The economic insolvency of Puer-
to Rico today has led to the reduc-
tion of essential public services; job
losses in the public and private sec-
tor; an overall impact on the eco-
nomic climate and investment; an
increase in taxes, license fees and
other taxes; increases in the cost of
living; increases in the cost of pub-
lic services, among others.
Furthemore, Puerto Rico´s lack
of institutional capacity (legal,
scal, administrative, policymak-
ing and political will) is linked to
the absence of a coherent pub-
lic policy that promotes transpar-
ency and accountability in the
public sector as well as the lack
of integration between strategic
planning and the budgeting pro-
cess in all its phases. In this context,
governance (capacity of public
institutions), governance (how to
manage public affairs) and the
legal framework governing public
processes is very frail.
The lack of institutional manage-
ment capacity of the past de-
cades has been linked with high
politicization of public administra-
tion; a lack of vision and coherent
planning to promote sustainable
development; high levels of bu-
reaucracy in civil service and high
operational costs; poor quality of
services and the lack of results and
outcomes to meet citizens’ needs.
“The lack of institutional
management capacity of
the past decades has been
linked with high politiciza-
tion of public administra-
tion; a lack of vision and co-
herent planning to promote
sustainable development;
high levels of bureaucracy
in civil service and high op-
erational costs; poor quali-
ty of services and the lack
of results and outcomes to
meet citizens’ needs”.
In the context of the study, the
lack of metrics and information
about the nancial risks and fu-
ture scal plan that meets interna-
tional standards of transparency,
accountability and scal respon-
sibility prevented the formulation
of appropriate responses to cope
with the social, economic and s-
cal crisis that it faces.
The research ndings reveal that
scal policy in Puerto Rico can
improve through a change in the
way public affairs are governed. It
is imperative to raise awareness at
all levels of public organizations of

125
Reframing the “Rules of the Game”:
Through Governance, Transparency and Fiscal Responsibility
the importance of discipline and
efciency to achieve scal perfor-
mance and the macroeconom-
ic effects of scal policies. In this
process of change is important to
assess the role played by each so-
cial actor as part of a society that
has common expectations.
A noteworthy nding of the study
is that scal responsibility legisla-
tion should clearly establish how
the government will disclose pro-
posed and adopted scal poli-
cies to ensure that citizens know
how government will comply with
the principles of responsible scal
management adopted. The IMF
establishes the best practices prin-
ciples required in a scal respon-
sibility law: (1) The publication of
a statement of budgetary policy
that contains the strategic priori-
ties for each nancial year, specify
the short-term scal intentions, and
express, in turn, its medium and
long term goals; (2)The projection
and disclosure of the impact of
scal decisions over a multiyear
period; (3) The inclusion of all -
nancial information according to
international generally accepted
accounting principles; (4)Provide
timely, adequate and accessible
to the public of all scal, economic
and nancial statements required
by law; (5) Demand greater re-
sponsibility to the heads of agen-
cies with incentives to those who
comply and penalties for those
who breach compliance; (6)Es-
tablish processes for assessing and
measuring results of public man-
agement indicators.
To address the lack of scal disci-
pline Puerto Rico needs to reform
its government spending practic-
es, its tax and budget policies and
control its level of debt to retake
the path toward scal sustainabil-
ity, sustainable development and
economic growth. It is also nec-
essary to adopt a comprehensive
and coherent institutional and
legal framework that addresses
the following issues: High discre-
tionary public spending; Failures
in the formulation and implemen-
tation of public budgets; The lack
of mechanisms to control public
spending and scal decits; The
lack of government accountabil-
ity; The lack of scal targets, with-
out medium-term planning, cri-
teria or evaluation mechanisms;
and the absence of indicators of
public sector performance.
LEGAL AND
INSTITUTIONAL
FRAMEWORK
The institutional framework is deter-
mined by the legal framework. This
refers to the group of institutions, or-
ganizations, networks and agree-
ments, national or municipal that
are linked in one way or another to
the implementation of laws, rules,
regulations, policies and guide-
lines for the provision of services.
An institutional framework lays out
the roles and responsibilities of the
different institutions involved in the
provision of services and the levels
of authority and monitoring, and

126
Eneida Torres de Durand / Rafael Durand Aldea
their interaction and ways of sharing information (adapted from IEEC
2006 HERRÁN C. 2012).
On the other hand, the legal framework is the set of laws, rules, and
regulations that generally relate to each other and provide the regula-
tory information needed to perform activities by a given sector.
There is no categorical list of the principles of sound scal responsibility.
However, studying and comparing scal responsibility initiatives in the
international arena we identied several principles that transcend the
boundaries of the countries analyzed, which in turn are recognized by
organizations such as the IMF and the IBP. The research study highlights
ve key principles: (1) Identify and clearly delineate the roles, responsibil-
ities, goals and objectives; (2) Establish transparent and open methods
of formulation and statement of public policy; (3) Enact transparency
rules for public information on scal policies; (4) Require accountability
and assurances of integrity; and (5) Establish a system of sanctions and
responsibilities, both administrative and at the citizens level. However, it
should be noted that these principles do not work in isolation, as they
are interconnected and dependent on each other, so that compli-
ance with one, sets forth the basis for the requirement and eventual
achievement of the other. This paper examines the scal responsibility
legal framework that an increasing number of countries are using as a
tool of governance. Table No. 7 details the general legislative guiding
principles adopted by: New Zealand, Australia, Brazil, Colombia, Mexi-
co, Chile and the United States discussed in this research study.
TABLE 7. GUIDING PRINCIPLES
FOR FISCAL RESPONSIBILITY LEGISLATION
Country Year of
approval
Guiding Principies
Roles, res-
ponsibilities,
goals, and
objetives
clearly
delineated
Transparent
procedures
for formu-
lating and
reporting
public policy
Availability
of informa-
tion on scal
policies and
economic
accounta-
bility and
assurances
of integrity
Penalties and
admminis-
trative and
citizenship
responsability
Nueva
Zelanda 1994
Australia 1996
Brasil 2000
Colombia 2003
México 2006
Chile 2006
EEUU Varies
Puerto
Rico
There is no integrated scal responsibility legislation, although there are scattered
laws that serve some of these international principles

127
Reframing the “Rules of the Game”:
Through Governance, Transparency and Fiscal Responsibility
TABLE 8. ANALYSIS OF INTERNATIONAL CRITERIA FOR FISCAL
RESPONSIBILITY PRESENT IN THE LEGISLATION OF PUERTO RICO
Country Year of
approval
Guiding Principies
Roles, res-
ponsibilities,
goals, and
objetives
clearly
delineated
Transparent
procedures
for formu-
lating and
reporting
public
policy
Availability
of infor-
mation on
scal
policies
and
economic
accounta-
bility and
assurances
of integrity
Penalties
and
admminis-
trative and
citizenship
responsa-
bility
Constitución
de PR 1952 Yes Partially Partially No No
Ley Núm. 230
Ley de
Contabilidad
1974 Yes No No No Yes
Ley Núm. 147
Ley Orgáni-
ca OGP
1980 Yes No No No No
Ley Núm. 91
Fondo interés
Apremiante
2006 No No No No No
Ley Núm. 103
Reforma
Fiscal y
enmiendas
2006 Partially No No Partially Yes
Ley Núm. 236
Sostenibili-
dad Fiscal
2010 Yes No No Partially No
Ley Núm. 236
Sostenibili-
dad Fiscal
2014 Yes Partially No No No
Ley Núm. 71
Cumplimien-
to
Corp.
Públicas
2014 Yes No No No No
With regard to Puerto Rico the study reveals that the island still lacks an
integrated and coherent legislation on transparency and accountabil-
ity, Table 8 examines Puerto Rico´s legal framework legislation in the
light of the aforementioned international principles.
The discussion of the legal framework in countries analyzed in this re-
search study by key principles found that:

128
Eneida Torres de Durand / Rafael Durand Aldea
1. ROLES, RESPONSIBILITIES,
GOALS AND CLEARLY
DELINEATED OBJECTIVES
Fiscal responsibility laws are char-
acterized by identifying the roles
and responsibilities of the actors
involved in the budget process
and clearly outline
the goals and scal targets, al-
low the correction of goals not
achieved and provide a contin-
gency clause for scal emergen-
cies. Thus, scal management of-
cials and the public will know in
advance where to direct the ef-
forts of the management of pub-
lic affairs.
New Zealand and Australia, be-
ing the pioneer countries in this
eld, have laid the groundwork for
other countries to establish clearly
dened roles, responsibilities, goals
and objectives. For example, in
New Zealand, before presenting
the budget proposal to the Legisla-
ture, the government must dene
and disclose short term and long-
term scal objectives. It must also
describe the annual budget and
the medium-term strategy that
serves to achieve scal targets.
While in Australia, the develop-
ment of a scal strategy is required
with medium-term goals and short
term objectives in order to improve
public nances. The medium term
strategy is aimed at increasing
public savings. The main objective
is to ensure that government sav-
ings would be enough to cover
future investments, without the use
of private nancing. To achieve
scal balance over the economic
cycle it is necessary to incorporate
scal targets, such as: (1) maintain-
ing scal surpluses while continuing
growth, (2) reducing the public
debt ratio, and (3) appropriate re-
sources to sectors in greatest need.
In 2000, Brazil joined the interna-
tional trend towards scal responsi-
bility and passed legislation to that
effect. The Fiscal Responsibility Act
of Brazil was innovative in urging
the state to include a schedule with
the scal targets. The approved
law contains clear and precise
rules for the management of pub-
lic revenue and expenditure, the
level of indebtedness and asset
management in general. In Brazil
spending limits were established
for ofcials of the three branches
of government and different gov-
ernment levels (union, state, fed-
eral district and municipality), a
balance budget and public debt
limits and a requirement for an
emergency reserve.
In 2003, Colombia passed a law
on scal responsibility with the pri-
mary aim of rationalizing scal ac-
tivity, limiting sustainable public
debt and to generate economic
stability that allows reaching ex-
pected levels of development. This
law determines the rules, process-
es and procedures for the different
administrative bodies on public
nances, to a constant account-
ability on the use of public resourc-
es. Among its objectives is the
sustainability of debt through the
preparation and presentation of a
balanced budget and streamlin-
ing the programming and budget
execution, among others.

129
Reframing the “Rules of the Game”:
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Moreover, Chile established in
the Fiscal Responsibility Act (2006)
the obligation of the President,
within 90 days of the date he as-
sumes his duties, to outline the s-
cal policies that will apply during
his administration. This statement
should express the implications
and effects that such policies will
have on the structural balance.
Also, it must provide information
on the structural state of public
nances, reecting the sustain-
ability of scal policy and its mac-
roeconomic and nancial impli-
cations. Thus, the calculation of
the structural balance of the pub-
lic sector is incorporated into the
nancial program.
In 2006, Mexico had the oppor-
tunity to incorporate international
experiences with scal responsibil-
ity to enact legislation in this direc-
tion. For example, Mexico´s Legis-
lation requires that the country be
in a stable and sustainable medi-
um-term scal position and facili-
tate the reallocation of resources
to higher priority applications with
the necessary exibility. This law
has focused on strategic plan-
ning through clearly delineated
goals and objectives, including in-
centives for entities that operate
more efciently and obtain the
expected results. Requires that
the interests of society and the
new parliamentary activism (de-
mocratization of the budget) are
reected and that transparency
and accountability in the use of
resources is promoted.
The Act applies throughout Mex-
ico, all public spending, including
legislative, judiciary and auton-
omous entities. All are bound to
account for the administration of
public resources. So administra-
tors of public expenditure should
have a management unit, respon-
sible for planning, programming,
budgeting, measures for internal
administration, monitoring and
evaluating their activities on pub-
lic expenditure. Although the law
seeks a balanced budget, it rec-
ognizes that certain circumstanc-
es may generate a scal decit.
On the other hand, the United
States Constitution has no specic
provision for the adoption of the
federal budget; but states that
“Congress shall have power to im-
pose and collect taxes, tariffs, du-
ties and consumption; to pay the
debts and provide for the com-
mon defense and general welfare
of the United States; but all duties,
taxes and excises shall be uniform
...”. Section 2 provides that “Con-
gress shall have power to borrow
money on the credit of the United
States.” Similarly, “any bill to in-
crease revenue shall originate in
the House of Representatives; but
the Senate may propose or con-
cur in the same way as on other
projects.” And although the initial
responsibility is conceived as a
constitutional requirement, unlike
the aforementioned countries, the
legal situation in the United States
differs by the absence of a law as
the basis and guiding principles.
Puerto Rico´s Constitution, con-
fers authority to the legislature to
enact general budget laws, in-
cluding budget allocations and

130
Eneida Torres de Durand / Rafael Durand Aldea
rules for disbursement. The prepa-
ration of the budget draft consti-
tutionally has been delegated to
the Executive; who in turn, has the
responsibility to implement it when
approved by the Legislature.
The study demonstrates that in
the past fty years Puerto Rico has
not clearly established goals, even
in the short term. In more recent
years, the State of the Common-
wealth address has not included
the facts and information needed
for the formulation of a program
of economic and scal legislation.
It has become more a progress re-
port and the formulation of politi-
cal promises, while the spending
proposal is forwarded separate-
ly near the end of the legislative
session, detached from the pro-
cess of managing for results and
accountability. Consequently the
public does not have access to
the information necessary to de-
termine the strategic direction of
the commonwealth, much less
how it relates to the budget.
2. OPEN PROCESS FOR
FORMULATING AND
REPORTING PUBLIC POLICY
A scal responsibility law has scal
transparency as its guiding princi-
ple. Any proposed tax imposition
has to be transparent and include
timely and adequate information
on the institutions involved, reli-
able statistical data and project-
ed scal and social risks.
The New Zealand Act details how
the government should disclose its
proposed scal policies to ensure
that the legislature and the pub-
lic can learn how the government
will comply with the principles of
scal responsibility. It lays the foun-
dation for procedures and policy
statements aimed at reducing
debt. In turn, it requires the gov-
ernment to publish a statement of
scal policy including the strate-
gic priorities for the next budget,
detailed short -term scal inten-
tions, and, indicates the long-term
scal objectives, prior to the sub-
mission of the document to the
legislature. Moreover, the govern-
ment must disclose the impact of
scal decisions over a three-year
forecast period, with appropriate
updates in economic, tax and ex-
penditure matters. Nonetheless,
it recognizes that situations may
arise where the government can
set aside or temporarily postpone
the principles adopted, but must
do so publicly, and provide the
justication for such changes, and
report how and when it will meet
the standards adopted.
The “Charter of Budget Honesty”
of Australia requires establishing a
scal strategy based on the prin-
ciples of good administration and
facilitate public scrutiny of scal
policies and performance evalu-
ation. In compliance with interna-
tional principles of transparency,
the Charter of Budget Honesty
requires that the scal strategy
be disclosed, on or before the rst
budget, then the annual report
at the end of the scal cycle. This
will increase public awareness
about the government’s strategy,

131
Reframing the “Rules of the Game”:
Through Governance, Transparency and Fiscal Responsibility
and in turn, provide a benchmark
for evaluation. The scal strategy
should include, among others, an
explanation of the priorities on
which the budget is based; eco-
nomic assumptions used; scal
measures that the government
considers important; objectives,
goals and budget estimates for
the scal year and the next three
years; disclosure of risks and ex-
pected results. Similar to New
Zealand, the law allows that if the
government changes or amends
the scal strategy, if it known in
advance by the public.
Furthermore, in Brazil the Law
recognizes the importance of the
processes of planning and scal
management complemented by
the Budget Guidelines Law (LDP)
and the Annual Budget Law (LPA)
which establish the basis for nan-
cial planning. In the area of trans-
parency, the Law refers to the LDP
processing and publication of two
annexes: Tax Goals and Fiscal Risks.
The rst Appendix (Fiscal Tar-
gets), provides information on the
assessment of compliance with
the scal targets the prior year,
setting goals and priorities for the
next two years, changes in equi-
ty, actuarial projections, assess-
ment method and estimates tax
waivers, among others. This report
gives exibility to the government,
and in turn, lays the foundation for
the following scal year. Further-
more, the Law provides for gov-
ernment to make decisions that
include the foregoing of income
either by amnesty or other tax
strategy. In addition, it must show
that the waiver of revenue will be
offset by other activity, either by
increasing or formulation of a new
tax or contribution. In that case,
the waiver will only apply when
compensation is insured by in-
creased revenue.
For its part, the Annex Fiscal Risks
report includes three categories:
(1) budget scal risks (possibility of
not achieving revenues and/or ex-
penditures); (2) scal risks of debt
for government securities (arising
from changes in interest rates, ex-
change rates and/or ination); and
(3) contingent liabilities, especially
those involving judicial disputes.
This toolkit aims to inform society of
the evolution of public accounts,
to demonstrate to the taxpayer
how funds raised are used.
In Colombia, to ensure ac-
countability and transparency in
their scal processes, a horizontal
planning process is promoted for
a period of 10 years. This displays
the future effects of decisions on
taxes, spending capabilities and
level of indebtedness. The Me-
dium Term Fiscal Framework is a
key instrument of the Colombian
law on scal responsibility, which
requires the delivery of a nan-
cial plan, which must consider
the historical trend or behavior of
income or earnings for the three
years prior to the annual cycle in
question and the inclusion of new
policies. It will also include a report
on macroeconomic and scal
current year results, evaluation of
public services, and an estimated
cost of exemptions, deductions or
discounts it offers. Thus, it is intend-

132
Eneida Torres de Durand / Rafael Durand Aldea
ed that the development of each
annual budget, each agency an-
alyze its scal responsibility to en-
sure debt sustainability. Manag-
ers of public resources should be
cautious in the calculation and
estimation of revenues, greater
control of their operating costs,
and meet the goals established
primarily to service the debt.
In Chile procedures for scal
transparency and public policy
are highlighted by the creation
of two funds to maintain and in-
vest the tax savings resulting from
the structural balance approach:
the Pension Reserve Fund (FRP)
and the Fund for Economic and
Social Stabilization (FEES). This, in
order to distribute over time the
nancial burden.
The FRP was created with the
aim of providing nancial stabili-
ty to the treasury, to build part of
scal surpluses to secure funding
from the public budget for decit
years. With FEES Chile avoids ex-
posing social spending and pub-
lic investment to changes in the
economy, while facilitating public
savings. For both funds, the law
provides different percentages
and formulas by which the contri-
butions should be increased, and
the investment ceiling.
However, in Mexico the prin-
ciples of transparency require
that scal instruments be devel-
oped on the basis of objective
and quantiable parameters of
economic policy. They must be
accompanied by performance
indicators, based on the objec-
tives, strategies and annual goals.
Projections must cover a period of
ve years and the exercise of the
scal year in question, which are
reviewed annually; while the re-
sults of public nances, including
nancial requirements, must also
be projected for a period of ve
years immediately preceding the
scal year in question.
Under this Law Mexico will al-
ways procure a balanced bud-
get, however the law recognizes
that due to economic and so-
cial conditions, it may incur in a
budget decit. If this happens,
the specic amount of funding
needed to cover the decit, the
reasons for it, and the time and
actions required to eliminate the
decit to restore budget balance
must be revealed to the public.
The constant changes in -
nancial regulations in the United
States makes it difcult to identify
whether scal transparency is im-
plemented in the formulation and
statement of public policy. For ex-
ample, when the Budget Control
Act (2011) was adopted, several
mechanisms, such as the creation
of the Congressional Joint Select
Committee on Decit Reduction
and the “budget sequestration”
were introduced. This law delegat-
ed to federal agencies and de-
partments budget cuts. Two years
later, Congress approved the Se-
questration Transparency Act of
2012 to require the President and his
administration to report in 30 days
detailing how it will implement the
automatic cuts. The report would
include an estimate for each cate-
gory of percentages and amounts

133
Reframing the “Rules of the Game”:
Through Governance, Transparency and Fiscal Responsibility
necessary to achieve the required
reduction and identication of the
accounts, estimates of resources
and projects, among other details.
Reviewing the situation in Puer-
to Rico, we observe that it is far
from adopting transparent pro-
cedures and formulation of scal
policy similar to those enacted in
the countries analyzed. There is a
constitutional provision that tax al-
lowances for any scal year may
not exceed the total resources
calculated for that year. The Con-
stitution also requires that there
be a budget; and if there are no
funds, it establishes an order of
priority, where debts are paid rst
and then other spending priorities.
Although there is a clear legal limit
for a balanced budget of income
and expenses, the practice in re-
cent years has been to use non-re-
curring sources of income (debt)
to cover recurrent costs (nanc-
ing of government operations).
These sources of income are not
disclosed to the public when the
budget is established, but when
obligations are to be met and
there are no resources available,
the legislature then authorizes the
issue of new debt.
The Tax Reform Act passed in
2006 to address the econom-
ic and scal crisis of Puerto Rico,
established that the government
should develop a Strategic Plan
which would contain strategies
for scal stabilization, including
restructuring of agencies, auster-
ity measures and other govern-
ment management measures.
All budget requests submitted by
the Governor would be accom-
panied by a seven year Strate-
gic Plan. A review of the Strate-
gic Plan of Puerto Rico reveals
that it contains a broad general
statement of the goals set for the
required period. However, the
process for approval of the Plan
is not clear, and the strategies de-
scribed are not transparent, they
do not reect the sources of reve-
nue or identify measures and per-
formance indicators.
3. PUBLIC ACCESS TO
INFORMATION ON TAX
POLICIES
Another essential principle of
transparency and scal responsi-
bility, is the disclosure to citizens of
proposed and adopted policies.
This implies that citizens should
be provided complete informa-
tion on past and present scal
activities and major scal and so-
cial risks. The information must be
timely, adequate, complete and
accessible.
The New Zealand Act details
how the government should dis-
close its proposed policies to en-
sure that the legislature and the
public can learn how government
is complying with the principles of
scal responsibility. All nancial in-
formation must be presented ac-
cording to generally accepted
accounting principles. The gov-
ernment has a duty to inform the
projected scal position, including
income, expenses, operating bal-
ance on an accrual basis, total
debt and equity. All the required

134
Eneida Torres de Durand / Rafael Durand Aldea
nancial statements are similar
to those of any private compa-
ny and include a statement of
responsibility, where the Minister
of Finance afrms the integrity of
the information contained in the
nancial statements.
In Australia, the Charter of Bud-
get Honesty requires that annual
reports be published with the scal
budget and economic outlook.
This annual report shall include,
among others, estimates for the s-
cal year and the next three years;
economic assumptions used; sen-
sitivity analysis; summary of esti-
mated tax expenditures for the
budget year and the next three
years; and a statement of risks.
The law in Brazil establishes trans-
parency as a control mechanism
by publishing reports and certi-
cations on budget execution and
provide the taxpayer the actual
use of public resources. Speci-
cally, it outlines the instruments of
transparency in scal manage-
ment, among which are public
hearings, accountability publica-
tions, and scal reports. The Act
provides that public hearings be
conducted at the time of the
preparation and discussion of the
budgetary documents (multian-
nual plan, budget directives law
and annual budget law). It also
establishes the requirement, ev-
ery four months, for the Executive
to publish and assess compliance
with scal targets.
Colombia´s Medium-Term Fiscal
Framework must be reviewed pe-
riodically and as if the assessment
shows that it has not met the proj-
ect goals it must make the neces-
sary adjustments. Adjustments re-
quire a justication and a review
to meet debt sustainability. Both
the framework and the nancial
plan and the corresponding eval-
uation must be accessible to the
public, including through elec-
tronic means.
Legislation in Chile requires the
Treasury to issue quarterly reports
on the status of the sovereign
funds, and in turn, prepare every
three years an actuarial study to
assess its sustainability. The State
shall maintain permanently avail-
able to the public through their
websites, updated information
at least once a month, of various
government activities, including
information on the allocated bud-
get and reports on its implemen-
tation, under the terms provided
in the respective Budget Act each
year. In addition, the government
must provide the results of nan-
cial year audits of each entity
and, when appropriate, addition-
al clarications.
In Mexico the principle of acces-
sible information is covered in the
law by requiring public institutions
to deliver monthly and quarter-
ly reports. Quarterly reports must
be submitted with monthly break-
downs and must include informa-
tion on the Income and Expendi-
ture Budget performance and on
the economic situation, including
an analysis on production and em-
ployment, wages and prices; and
the situation of public nances and
generation of tax and non -tax rev-
enues, status of collection targets,

135
Reframing the “Rules of the Game”:
Through Governance, Transparency and Fiscal Responsibility
realization of public expenditures,
among others. These also include
key indicators on the results and
progress of programs and projects
in meeting the goals and objec-
tives and the social impact, in order
to facilitate its evaluation.
The US has established the Of-
ce of Budget and Management
which is responsible for reporting
the scal situation, including the
“budget sequestration” agen-
cy. This includes adjustments to
spending limits for the scal year
and each succeeding year, as
required by law. The law requires
a timetable for presentation and
disclosure of reports, including
the holding of public hearings, if
necessary.
In the case of Puerto Rico, its
Constitution proclaims one of the
most fundamental parliamentary
functions in a democratic society:
Keep citizens informed by various
means on legislative procedures.
This constitutional provision also
applies to aspects related to tax
legislation and budget. Howev-
er, this regulatory progress on the
principles of transparency, access
and availability of information, has
not gone hand in hand with our so-
cial reality. The Constitution does
not set a term or deadline for the
State to provide relevant informa-
tion. In practice it is difcult to nd
ofcial documents; statistics are
not updated, and public reports
do not contain all information
necessary for proper evaluation of
policies and scal practices.
4. ACCOUNTABILITY AND
ASSURANCES OF INTEGRITY
Another guiding principle, which
is shared among the legislations
analyzed, is accountability and
providing assurances of integrity.
Accountability ensures that the
government provides and
demonstrates that the decisions,
actions, or authorized and imple-
mented projects are consistent
with clearly dened and approved
goals. In addition, information and
scal practices must meet certain
accepted quality standards and
are subject to independent veri-
cation. Thus, without the principle
of transparency in the budgeting
processes accountability cannot
operate effectively.
The New Zealand Act requires
the State to follow the legislated
principles and publicly assess their
scal policies against such prin-
ciples. The Act requires that the
government present all nancial
information in accordance with
accepted accounting practices.
All required nancial statements
are similar to those of any private
company and include a state-
ment of responsibility, where the
Minister of Finance ensures the
integrity of the information con-
tained in the required nancial
statements.
In compliance with the princi-
ples of accountability and scal
transparency, the Charter of Bud-
get Honesty Act of Australia re-
quires the government to analyze
and publish to the public a report
and statement of responsibility,

136
Eneida Torres de Durand / Rafael Durand Aldea
within six months implementation
of the budget. The purpose of this
report is to present the econom-
ic and scal outlook and provide
updated information to allow cit-
izens to assess government scal
performance against previously
established and disclosed scal
strategy information. The informa-
tion contained in the reports must
include all government decisions
and circumstances that may
have an effect on the scal and
economic outlook.
The government of Australia has
to provide a report on the eco-
nomic and scal outlook within 10
days of the order issued for gener-
al elections. This report should in-
clude the situation of government
for the year and expectations
for the next three years; with the
economic assumptions that have
been used in the preparation of
tax estimates; An updated list of
risks, including data declaration.
The information provided should
reect, to the extent possible, all
decisions of the government and
other circumstances that may
have a signicant effect on the
scal and economic outlook. In
addition, the law requires that the
report be signed by the responsi-
ble ofcials asserting that the re-
port reects their best professional
judgment; which includes all the
nancial information provided by
the Treasury Department and all
scal information available; and
incorporates the tax implications
of government decisions.
The law in Brazil provides that
top government ofcials should
be available for public consulta-
tion. Reports of public accounts
must provide a portrait of the per-
formance of public spending to
test the government’s scal posi-
tion. The law provides for ample
disclosure of the results of the as-
sessment of the accounts and that
these remain available for consul-
tation and assessment by citizens
and institutions of society. Similar-
ly, uniform procedures for all gov-
ernment agencies are regulated
which facilitates the standardiza-
tion of reports. By complying with
the rule of transparency, publica-
tion of consolidated accounts in
electronic format is also expected.
On the other hand, the process
of transparency and accountabil-
ity established by law in Mexico is
the evaluation of programs. This
is to verify compliance targets,
which show the results of the al-
location of public resources. All
evaluations are made public and
contain at least general data of
the external evaluator, general
data of the responsible admin-
istrative unit to monitor the eval-
uation; the hiring process of the
evaluator; evaluation contract
type, the database generated
for analyzing the evaluation; the
data collection instruments (ques-
tionnaires, interviews and formats,
among others); the methodology
used; an executive summary out-
lining the main ndings and rec-
ommendations; and the total cost
of the external evaluation, with its
source of funding.
The United States requires ac-
countability through various forms,

137
Reframing the “Rules of the Game”:
Through Governance, Transparency and Fiscal Responsibility
special laws and the establish-
ment of inquiry commissions. While
these mechanisms are known to
the public, its exercise is essential-
ly by the legislature, which is insuf-
cient. The presidential message
to the House of Representatives is
interpreted as a form of account-
ability to the people.
The Commonwealth of Puerto
Rico, approved in 2010 a public pol-
icy that every government agency
should implement a program to
optimize performance and service,
which should be achieved through
the formulation of strategic plans
with measurable goals and objec-
tives. Thus, the State intends to im-
plement a system of accountabili-
ty and open government in which
the government components are
directed to the achievement of
goals and objectives to determine
the efciency, effectiveness and
quality of services through the dis-
closure of results.
This legislation was novel and
took a step in the right direction
by requiring a strategic planning
document to agencies and pub-
lic corporations. Nevertheless, we
found that this law did not have
the necessary elements for the
creation of an integrated assess-
ment and implementation tool
to evaluate the outcomes and
measure their impact; it does not
contain mechanisms for quali-
ty control in the development of
agency strategic plans; does not
set the parameters for the dis-
closure of plans or require that
plans be linked to the budgeting
process. Also, the law does not
require agencies to review and
certify that the strategic plan de-
veloped is aligned with the agen-
cy mission as manifested in the
law which governs its operations.
Less than a third of the agencies
(49 as of 2013) have submitted
their strategic plans to OMB and
of these just a few publish a prog-
ress report on its Web site.
A look at the OMB web site re-
veals the absence of a timetable
established for the evaluation of
public services. Citizens have no
ofcial information about the ser-
vices rendered or the economic
or social impact evaluated. An
evaluation report or audit must
provide the public an explanation
for the accuracy and reliability of
the use of public funds, including
whether it has complied with the
laws and administrative guide-
lines, and efciency and effec-
tiveness of government spending
(IBP, 2011). Disclosure and evalua-
tion of public services performed,
provides citizens with a glimpse of
the implementation of the bud-
get during the scal year.
5. DEFINITION OF PENALTIES
AND ADMINISTRATIVE AND
CIVIL RESPONSIBILITY
Notably, as social control is essen-
tial for the enforcement of legal
compliance, establishing sanc-
tions serves as a powerful tool for
initiating responsible governance
(Almeida, 2008).
In Brazil the lack of publication
of the required reports can cause

138
Eneida Torres de Durand / Rafael Durand Aldea
the offender the suspension of all
voluntary budget transfers and
the prohibition to contract cred-
it operations. The LRF is comple-
mented by the Penal Code and
the Law on Tax Crimes to address
penalties for noncompliance. The
penalties are classied as civil (to
repair the damage); administra-
tive (loss of ofce, disqualication,
nes, suspension of political rights)
and criminal (commission of of-
fense). The law emphasizes that a
civil case does not preclude crim-
inal or administrative proceed-
ings. Furthermore, the omission of
a ministerial duty under law brings
about the sanctions described
(Almeida, 2008).
Penalties are classied as per-
sonal or institutional. Institutional
penalties befall on the adminis-
trative bodies responsible for the
irregularities, while personal sanc-
tions affect the agents or individ-
uals who committed the wrongful
act. The author points out as an
example: the prohibition to carry
out voluntary transfers is an institu-
tional sanction and removal from
public ofce is a personal penal-
ty. The penalties associated with
noncompliance of the LRF have
varying degrees of severity, but
require from the public adminis-
trator: integrity; acceptance of
responsibility, and commitment
to legality and transparency of
their actions. Penalties apply to
all those responsible in the three
branches and the three levels of
government.
Notwithstanding, the article, “Fis-
cal Responsibility Law: The Experi-
ence of Latin America”, explains
that although it is unlikely that a vi-
olation of the law reaches criminal
charges because of the slowness
in the judicial system, many poli-
ticians prefer to avoid entangle-
ment in the process. The law serves
as a tool for denying political fa-
vors. In several places in Brazil signs
have been posted expressing the
repercussions of failure to under-
stand why certain projects are not
possible. However, in Colombia a
breach of this law, by a public ser-
vant, “will be considered as a dis-
ciplinary offense” under the provi-
sions of Act 734 of 2002.
On the other hand, in Mexico
situations that could lead to dis-
ciplinary measures are identied.
The law asserts that the acts or
omissions involving its breach be
punished in accordance with the
Federal Law of Administrative Re-
sponsibilities of Public Servants
and other applicable provisions.
The law lists various situations re-
quiring sanctions, and in relation
to accountability, transparency
and scal accountability high-
lights the following:
... not comply with the
general provisions on pro-
gramming [budgeting]
exercise, monitoring and
evaluation of federal pub-
lic spending established in
law; do not adopt the bud-
getary and accounting re-
cords in the form and terms
established by this Act, with
reliable and accurate in-
formation; comply with the

139
Reframing the “Rules of the Game”:
Through Governance, Transparency and Fiscal Responsibility
obligation to provide time-
ly and required informa-
tion; take actions or incur
in omissions that impede
the efcient, effective and
timely exercise of resourc-
es and the achievement
of annual goals and objec-
tives; and perform actions
or incur in omissions that
deliberately cause failure
to meet targets and annu-
al targets in their budgets.
In addition to the penalties pro-
vided by law, public servants
which cause harm or damage
will be responsible for paying the
due compensation. However,
sanctions and compensation will
be imposed regardless of the re-
sponsibilities of political, criminal,
administrative or civil character, if
any, come to be determined by
the competent authorities.
In relation to non-compliance
with scal laws in Puerto Rico, as
in the US, we have segmented
laws that consider this problem.
For example, Article 24 of the Tax
Reform Act establishes sanction
to any person who willfully vio-
lates any provision of this Act shall
be charged with a misdemean-
or, and upon conviction shall be
punished with ne from $ 1,000
to $ 5,000, which will be paid by
the ofcial or employee who, for
his carelessness, negligence or in-
tention, commits the violation. In
addition to any appropriate disci-
plinary action against any ofcer
or employee who carelessly or
negligently violates or assists in the
breach of any provision of this Act
or of any laws, regulations or rules
adopted under it.
CONCLUDING
REMARKS
The research team ascertains that
Puerto Rico must embrace the
challenge to sustainable devel-
opment by reframing its gover-
nance practices. The absence of
good governance principles and
practices in Puerto Rico has cre-
ated uncertainty and lack of con-
dence in citizens, entrepreneurs
and investors. The lack of consis-
tency in the development and
management of scal policies
has increased governance prob-
lems and a lack of capacity of
government agencies to comply
with their mission. The lack of insti-
tutional capacity in the manage-
ment of public affairs in the past
decades has been linked to high
politicization of public administra-
tion; lack of vision and coherent
planning to promote sustainable
development; high levels of bu-
reaucracy in civil service and high
costs operations; the poor quality
of services and the lack of results
to meet citizens’ needs.
Among the most signicant nd-
ings of this study we can mention:
the fragile scal situation of the is-
land; numerous aws in the bud-
geting process; a high govern-
ment decit; unsustainable levels
of indebtedness; lack of planning

140
Eneida Torres de Durand / Rafael Durand Aldea
of public expenditures; lack of clear goals and metrics
for evaluating results; signicant discretionary public
spending; lack of reliable and accessible information
and statistics to citizens and an obsolete manage-
ment model utilized during the past four decades.
Moreover, Puerto Rico lacks an integrated and
coherent scal responsibility legal and institutional
framework. The lack of a clear and consistent scal
policy has led to weak performance by the entities
in charge of managing economic and scal matters.
Among the major recommendations of the study
we can highlight the adoption of scal policies of
transparency and accountability that attune with the
best practices guiding principles followed by nations
globally and used by successful countries such as: In-
creased participation of institutions and public sector
agencies; Reporting and publishing comprehensive-
ly the public assets and liabilities of the government;
Publish more frequent and timely scal reports; Using
a more rigorous approach to developing scal pro-
jections; Develop and implement standards to align
strategic plans, budgets, statistics and accounts. Build-
ing on experiences of countries such as New Zealand,
Australia, Mexico, Chile, and others are valuable and
can serve as a reference to move forward. In addition,
the study provides general and specic recommen-
dations to strengthen the institutional capacity of gov-
ernment; develop a coherent institutional and legal
framework; and strengthen the capabilities of human
capital among other pressing matters.
The research study also proposed a model of open
and transparent governance of public affairs an-
chored on international principles (the model pro-
posed by the Governance Center model in its book,
Una Nueva Gobernanza para Puerto Rico) is a sci-
entic roadmap to guide the process of formulation
and implementation (Figure no. 1);
To articulate pillar 1, culture of good governance, it
is necessary to focus on transparency, accountability
and government scal responsibility. Pillar 2 address-
es economic competitiveness by improving the in-
vestment climate, generating capital, creating jobs
and developing a culture of entrepreneurship and
productivity.

141
Reframing the “Rules of the Game”:
Through Governance, Transparency and Fiscal Responsibility
Pillar 3, developing social capital, emphasizes the importance of fos-
tering the skills and capabilities of human capital, social culture and
resilience to overcome adversity, uncertainty and crisis management
capabilities. Finally, to successfully advance the governance reforms
a platform of indicators and metrics to assess the results and impacts
of the progress of efforts is necessary to ensure that they maintain sus-
tainability in the long run and that transparency and accountability
permeate the whole process.
Figure 6. Governance Model Source Una Nueva Gobernanza para Puerto Rico 2013
The study also emphasizes, the following key ndings: Puerto Rico must
adopt an integrated scal responsibility legislation as a rst step to pro-
mote order and discipline in the management of public nances; The
establishment of general rules and strict reporting requirements to fos-
ter a more transparent budget formulation process, improve the qual-
ity of public spending, control the level of indebtedness and provide
a framework to improve public policy and weigh the effects of scal
decisions; Enhance the government institutional capacity (design of
policies, systems and administrative, legal, scal processes and political
authority) suitable and sufcient to manage public affairs in an increas-
ingly complex and volatile environment with limited resources; Adopt
a national strategic plan with long-term strategic vision for sustainable
development which considers short and medium term actions to ensure
a balance between planning, budget formulation, scal discipline and
managing for results and outcomes; Adopt the international principles,
practices and metrics of transparency and accountability in the man-

142
Eneida Torres de Durand / Rafael Durand Aldea
agement of scal affairs as a pillar
to create an environment that dis-
courages corruption; Undertake
structural reforms in public admin-
istration anchored on strengthen-
ing human capital competencies
management; Adopt transpar-
ency and accountability policies
in scal affairs that incorporate
components used by success-
ful countries; Develop a model
of sustainable development of
the economy of Puerto Rico to
take into account its competitive
strengths and address and reduce
risk and the impact of unfavor-
able conditions; Develop a trans-
parent, accessible, coherent and
integrated results management
and budget planning as a tool to
promote quality in the delivery of
public services and more efcient
use of limited public resources;
Adopt the criteria and standards
established by the IMF and the IBP
for transparent budget processes
and involve citizens in the discus-
sion of the budget as a measure
to improve the formulation, im-
plementation and evaluation of
scal policy; Develop multi-year
budgets as dened in internation-
al standards; and Strengthen infor-
mation technology infrastructure
as a mechanism to improve the
quality of data as a basis for gen-
erating better quality information
to support the decision-making
process in scal and budgetary
matters (“e-government”, “open
government”).
In summary, for Puerto Rico it is
imperative to take advantage
of the deep and prolonged cri-
sis as an opportunity to advance
structural reforms which require
commitment and willingness. Ad-
vancing the agenda for manag-
ing public affairs in the current
historical juncture to generate re-
sponses and produce the results
will require talent, participation
and willingness of all. In the words
of Albert Einstein “the crisis is the
greatest blessing that can hap-
pen to people and countries
Given the complexity and depth
of the challenge Puerto Rico must
focus on the necessary reforming
agenda anchor on strengthen-
ing governance, improving scal
practices and reforming public
institutions. The understanding
needed to develop the roadmap
to mobilize action to undertake
the structural (economic, scal,
budgetary, and public adminis-
tration) reforms and generate re-
sponses and outcomes for society
are clear. Furthermore, all the tools
needed to advance reforms are
at hand: consensus on standards,
stakeholders and understanding
of current deciencies. If these
tools are used properly and in a
concerted manner, Puerto Rico
can achieve historic progress in its
capacity to govern public affairs
that allows scal transparency,
accountability and scal respon-
sibility can be accomplished for
the common good and prosperity
of the Island.

143
Reframing the “Rules of the Game”:
Through Governance, Transparency and Fiscal Responsibility
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153
Vol. 1 No. 2 December 2015
DEMOCRATIC GOVERNANCE IN
LATIN AMERICA
EDITED BY SCOTT MAINWARING
AND TIMOTHY R. SCULLY
STANFORD, STANFORD UNIVERSITY
PRESS, 2010, 405 PP.
Piero Viteri*
If we consider part of the 80’s decade and the 90’s, the main concern
of most of the Latin-American countries lay in making the transitions
to democracy possible. Two decades after, the main challenge is not
reduced to achieve a fully democratic political system, but to ensure
good quality politics.
Mainwaring and Scully edited and published ‘Democratic Gover-
nance in Latin America’, a book that tries to quite clearly present a
state of the art of the regional reality in the rst years of the twenty-rst
century, submitting works that go beyond fundamental politics, eco-
nomics and public policies analysis. This accurate text brings together
different specialists not only from the ‘world of academics’, but also
thinkers, intellectuals who play or have played relevant positions at a
high political level in their respective countries.
Those points of view certainly enrich any analysis about the central
theme of the book, which has to do with the “democratic governance”.
The introductory part of the book made by the editors alongside
Jorge Vargas Cullell, conceive democratic governance in terms of the
success of public policies implemented by governments, that is to say,
in the ability to provide goods and services and to guarantee certain
rights for the welfare of citizens within democratic institutions.
It is possible to think of a restrictive approach of the initial statement,
given that is circumscribed to the improvement of the efciency of the
public sector, however, authors offer a methodological proposal consist-
ing in a measuring of success of governance applied to several coun-
* Research Professor, University of Santiago de Chile.

154
Piero Viteri
tries of the region and that consists
of nine dimensions that go beyond
the procedures. The dimensions
are as follows: level of democra-
cy, rule of the law, containment
of corruption, economic growth,
ination, job creation, poverty, ed-
ucation and citizen security.
The book is divided into three
parts. The rst part considers the
regional context and focuses
analysis on the level of success of
the governments of their public
policies. The second section refers
to the national cases studies and
their level of success in the mat-
ters of social policy. The third one
puts together two nal chapters
that deliver conclusions and an
urge to draw lessons regarding
democratic governance in Latin
America.
De Gregorio exhibits his chapter
from a strong defense of the free
market and economic growth in
Latin America, analyzing a group
of reforms that involved, among
other measures, tax expenses con-
trol, decline of public expense,
privatization of public enterprises
and utilities, market’s deregula-
tion to motivate competition, etc.
In the 90’s, many governments
of the region, with the exception
of Chile, managed to deploy a
large part of these measures, to
address severe macroeconomic
imbalances that came from the
last decade.
In retrospective, these eco-
nomic resolutions have not been
exempt from criticism and, as
Rodriguez emphasizes in its chap-
ter, some of them are focused
on the type of a mold criteria, as
he points out, “one size ts all”. In
other words, he gives importance
on framing unique recipes, with
a strong economist tone, leaving
aside social reasons, and above
all, the institutional political frame-
work of the countries.
That is why, following this rea-
soning, the United Nations Eco-
nomic Commission for Latin Amer-
ica and the Caribbean (ECLAC)
carried out an internal effort, not
programmatic and not idealized,
dened as the “productive trans-
formation with equity”, as a single
solution to all regional issues in a
way to counteract against the
applied model until then.
Foxley’s considerations on the
market and the State, has gener-
ated great debates on the future
of the State itself. Regrettably,
these discussions have had an
ideological bias, turning around its
size. The author believes that the
size of the State is a false dilemma.
The experiences in Latin America
for almost fty years point to the
need of having a smaller State,
but the complexity of the prob-
lems facing our society, and the
profound imbalances, requires a
more intelligent, strategic, regu-
lator State, a generator of equal
opportunities.
This raises the need for a reform
of State performed in carried out
in depth. The feasibility of this goal
collides with three obstacles: rst,
the idealization of the topic; sec-
ond; the tendency to consider
that the modernization of the State
is limited to the public services and

155
Democratic Governance in Latin America
their management; and third, the
low priority of this objective among
government programs.
The electorate requests health,
education, housing, quality of life
in the cities, citizen security, pro-
tection of the environment, re-
gional development and other pri-
orities that congure the electoral
platforms. Unfortunately, those
requests are made without notic-
ing that the compliance of such a
complex variety range of objec-
tives requires a new State with a
modern capacity to formulate ad-
equate well-timed public policies
for the solution of these problems.
The cases’ analysis that perform
Huber and Stevens in his chap-
ter, taking assorted elements of
regimes in the region show suc-
cessful results in the eld of social
policy. It is considered that Argen-
tina, Chile, Uruguay and Costa
Rica represent the most successful
cases in Latin America. This is due,
considering their specic historical
backgrounds, to the consolida-
tion of its party system as well as
the economic structural reforms
applied at the beginning of the
eighties decade.
However, despite this relative
success, the authors make an in-
vitation to question the evidently
economistic scrutiny of the anal-
ysis of social policies, calling for a
greater leading role of other social
sciences in order to provide more
inclusive solutions to increasingly
complex issues and that go be-
yond a simple economic analysis.
Brinks executes an analysis in
his chapter that attend to the in-
stitutional design and the judicial
efciency in ve cases of human
rights, emphasizes that we face
a reality that is, socially, strikingly
uneven and adds up an almost
non-existent presence of citizen
networks of support. This block, by
itself, the advances of the institu-
tional reforms that guarantee the
efciency of the judicial system.
The chapter addressed by Navia
and Walker gives a general over-
view of the regional political de-
velopments and the quality of de-
mocracy. It points up that there
are two obviously different ows
to cope with the neoliberal re-
forms implemented in the 90’s in
the region. The rst one, a populist
reform based on politicians per-
sonal agendas and a noticeable
internal leaderships; the second
one, a non-populist reform cen-
tered on the strength of its institu-
tions that have had certain cor-
rections in the neoliberal model,
to adapt them to the specicities
of each reality so its sustainability
can be ensured.
Finally, they emphasize in a series
of articles disseminated in the re-
gion over the last years that wide-
spread the expansion of the left
wing populist wave. This situation
according to authors is not support-
ed in reality and to prove it, they
point a couple of countries as ex-
amples to deny it. They perform a
fundamental distinction regarding
the association among political in-
stitutions, populism and democra-
cy.
Alan Angell analyzes the case
of Chile and the success in its

156
Piero Viteri
transition process and democ-
racy consolidation in the 1990s.
However he warns that this expe-
rience, many times acclaimed in
the region, can hardly be applied
as a model to other realities that
do not have a strong state as the
Chilean. On the other hand, An-
gell stresses that Chile has high
levels of citizen dissatisfaction with
democracy and institutional is-
sues not yet resolved to improve
its governance.
In this case, democracy is a
disconcerting paradox. On one
hand, it extends and is legitimat-
ed by the world, and on the oth-
er hand, consolidated democra-
cies, some mature and others not
so much, show a considerable
disappointment and discredit
on their institutions. Curiously, the
causes of this discredit are the
same elements that collaborated
on the democracy expanding,
such as the impact of capitalism
and the globalization of social life.
The chapter examined by Selig-
son and Franzoni presents anoth-
er case of success in the region,
Costa Rica. However, it puts in ev-
idence that despite a rich history
of governance, the implementa-
tion of neoliberal policies in the
country caused that broad social
sectors did not feel beneted with
the system and that only a few
take advantage of it, creating a
noticeable division and conict.
The former president of Brazil,
Fernando Henrique Cardoso, de-
fends the structural policies of eco-
nomic reforms based on his own
experience as president of Brazil in
the nineties. He considers that the
Brazilian experience is successful
given that he consolidated demo-
cratic governance in the country.
However, he underlines that know-
ing the successful experience of his
country, not all the implemented
actions are transferable to anoth-
er country, i.e. all decisions in this
regard must consider the reality
and the specic context of each
one. In summary, there is no single
recipe for success.
The book concludes with the
analysis of the General Secretary
of the Organization of American
States (OAS), José Miguel Insul-
za, who has some very interesting
reections regarding democrat-
ic governance in Latin America,
highlighting three central ideas.
The rst one, governance is con-
solidated with more democracy
and not with limitations of dem-
ocratic rights. Secondly, govern-
ments must have the capacity to
govern with greater effectiveness
and nally, consolidating a strong
institution is an essential condition
for ensuring the sustainable dem-
ocratic governance in our coun-
tries over time.
Finally, the editors conclude that
for the majority of Latin-Amer-
ican countries, the process of
democracy consolidation and
governance has turned out to
be complex, producing a variety
of experiences with very different
levels of success between one
and another.
Without doubt, this compilation is
a mandatory reference to under-
stand the changes and the future

157
Democratic Governance in Latin America
challenges for the State and its
institutions, to ensure good gover-
nance and the quality of democ-
racy in Latin America. The prime re-
sponsibility for the maintenance of
the governance resides in the State
itself, so for its achievement, State
must interact with civil society, the
private sector and the different so-
cial and economic agents.
Complementing the nal reec-
tions of Mainwaring and Scully it is
imperative to adequately, focus
the problem of governance. It is
easy to fall into the temptation of
circumscribing the problem sim-
ply to the improvement of gov-
ernment and its ability to manage
the process of economic devel-
opment and to manage the ef-
ciency of the public sector.
There are more deep and rel-
evant variables to consider such
as stability, legitimacy and gover-
nance of our political regimes. It
is worth to say, a broad systemic
approach surpassing the restricted
and instrumental gaze. This book
precisely provides us with some
answers to the great questions
that will continue to emerge on
the governance in Latin America.