Seeds of Corruption


Mexico  I think it may be productive to look at some underlying things that that builds a culture of corruption. And although most of what we will talk about relates to México, we can see in recent history that these things have roots almost everywhere.

Consider a simple thing like getting a minor traffic violation ticket in México. Let’s say that it is for a parking violation. In the US, you could simply plead guilty and the payment of the fine can even be done via mail. In México, you have a choice: pay the „fine” to the policeman (bribe if you will) or do it legally. To do it the legal way, count on spending at least a working day standing in lines just to plead guilty and pay the court. I have a friend that went the „legal way” and spent three days going through the process the „right” way.

When traveling to México for the first time, I inadvertently ran a red light while getting lost going through Zacatecas. The traffic policeman suggested that we could settle it between us for about $25.00. I took him up on the offer and even got a police escort to help me find my way through the city. Smart move.
But trying to do things legally in México will always end up costing you a lot of time and trouble. A story in the Chicago Tribune tells of a man spending 14 trips to his local borough in México City to get a permit to paint his house. These processes to get permits and procedures are called tramites in Spanish. And if any „i” is not dotted or „t” not crossed, back to the end of the line with you. As a result, it is estimated that in Mexico, with a population of 105 million people, the yearly cost of bribes (mordidas, the „little bite”) is about $2 billion USD. Put another way, this is the cost of existing in México.

But remember corruption is like a weed. It has roots in the small things but these roots grow into ever larger and larger weeds. It becomes a culture.

President Calderón, shortly after becoming our president instituted a program to reduce the number of tramites required for various processes in México. In doing so, México would not only become more efficient, but less corrupt. Yet, so far, in his administration, the number of federal tramites has doubled to about 4,200. Sounds like Reagan’s promise in the US to reduce the number of federal workers in the government. At the end of Reagan’s term the number of workers doubled.

Now, the Calderón administration has a program in process for Mexican citizens to join a contest in suggesting ways to eliminate the most useless tramites. The prizes total $50,000 USD. A noble endeavor this is, but the resistance will be from the countless government workers that make a good part of their living on the mordidas.
On 9 January, the contest winners were announced. The first place winner received about $23,000.00 USD. It had to do with reducing the time to obtain a Mexican passport in less than 2 years. The winner’s remedy is going to be incorporated with new regulations. Good for her, she deserved the prize.

This brings to mind the personal property tax law in Illinois in the late 1960s. This applied to individuals and to corporations. For individuals, not only would you pay for property taxes on your home and property, but also a separate tax on the contents. And without subpoena powers to enter homes, the tax assessors were forced to accept what the homeowners told them what property was in their homes. Like nothing. Then the law was changed to only tax automobiles. Now it became a simple matter to tax registered automotive property. In the meantime, businesses were taxed on whatever machinery and equipment they had in their plants. In this case, a whole new legal organization of tax „adjusting” lawyers came into business. You hired one of these „experts” and paid him a fee. He would then settle your tax bill at the county court house steps for a reasonable fee and your tax bill was settled. If you tried to do it the legal way, the tax bill would simply put you out of business.

 The end result of this corrupt system was that in the 1970s, the personal property tax laws on businesses were simply eliminated. A small increase in real estate tax rates made up for the loss of revenue and a whole bunch of tax „adjusting” lawyers went out of business.

The lesson for México is simple. Make the processes of tax collection and legal processes simple and easy for the population to obey. And, of course, the enforcement processes must be corruption free. You will collect more revenue and start to whittle down the culture of corruption that the present systems engender. And national productivity goes up too.

This subject is brought to mind today as my wife spent the full day traveling to downtown and standing in many lines just to pay our annual real estate tax. And the payment had to be in cash, no checks or credit cards accepted. And if you want to reduce the bill, there are other „means” that are available to you.
Richard N. Baldwin T., a ( contributing columnist, lives in Tlalnepantla, Edo de México. E-mail at: [email protected]