finanzas

JUAN MOLINAR HORCASITAS

Financing Political Parties in Mexico.

By Juan Molinar HorcasitasEl Colegio de México.

INTRODUCTION.Giovanni Sartori (1962, 4) reminded us that democracy is a deontological concept that conveys normative and positive meanings. It has normative contens, because democracy is an intellectual creation, an invention. Thus, we can not discuss them without references to what they ought to be. On the other hand, is also a positive concept, because there are real democracies in the world. Thus, we can discuss them from a positive perspective, too. Of course, the starting point of any empirical study is a normative assumption, because to study a democracy we must be able to identify it. That takes us back to its definition, and to the idea of what a democracy ought to be.

Clearly, the same is true for the study of the relations between money and politics. In this paper, I approach the subject both normatively and empirically. In the first part, I study the linkages of money and parties in Mexico from the normative point of view, and in the second I approach it empirically. In the first part, I make a brief description of the regulations concerning the financing of political parties and elections in Mexico, and then I propose some reforms. In the second part of the paper, I describe the current situation of public financing of parties and elections in Mexico, and then I discuss the effects of party expenses on electoral returns.

1. THE NORMATIVE ASPECTS OF MONEY AND POLITICS IN MEXICO.The electoral reform movement in Mexico has moved a long way since times when electoral fraud was open and flagrant, but if the current reformism movement is not fighting the worst expressions of ballot stuffing or violence on election day, it still has a lot to do. Today, the focus of the agenda is on three issues: independence of the electoral authorities, fair access to mass media, and the regulation of campaign and party finances. Most of them have been addressed by one of the nearly 20 reforms of the electoral laws. Regarding the financial issues, we are entering the fifth phase of reform since the promulgation of the Constitution, in 19171.

The first stage covers almost six decades from the first post-revolutionary electoral law to the reforms of 1963. During this stage, the electoral laws were completely silent regarding the financial aspects of elections and parties.

1 For an overview of the electoral reform movement in Mexico, see Molinar, 1991.

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The second stage covers the period from 1963 to 1978. The Constitutional reforms of 1963, which created the so called “diputados de partido” were accompanied by a minor reform to the electoral of 1954, which introduced some fiscal exemptions to political parties. Ten years later, the electoral law of 1973 introduced the concept of party prerogatives and granted some postal and telegraphic franchises to the national political parties. The law said nothing regarding party or candidate expenditures, and did not establish reporting obligations to the parties, nor monitoring powers to the authorities.

The third stage goes from the issuing of the Ley Federal de Organizaciones Políticas y Procedimientos Electorales of 1978 to 1987. This law extended other subsides in kind to political parties, such as printing material, and limited access to radio and television during electoral campaigns. The law provided very lax and vague rules for determining the amounts of public funding. The law mentioned no formula to allocate funds, and did not provide any legal procedure to administer and oversee them. The Comisión Federal Electoral, which was under complete control of the Secretaría de Gobernación (Ley Federal de Organizaciones Políticas y Procesos Electorales, articles 48 and 49) received full and discretional authority in this matter. The Partido Acción Nacional criticised this latitude and refused to receive the subsidies for the next nine years.

The fourth phase goes from the issuing of the 1987 Código Federal Electoral to the present. The 1987 law was the first to introduce non-discretionary provisions to determine the amounts of public funding for the parties. According to this law, public funding for parties varied proportionally to electoral returns, and to the percentage of seats won in the Chamber of Deputies (Código Federal Electoral, article 61). Only then, PAN accepted public subsides.

The law established clear rules for the allocation of public funds, but very few provisions for the reporting and monitoring of party finances.

The next step in the reform of the money and politics in Mexico came with the Código Federal de Instituciones y Procedimientos Electorales of 1989 (COFIPE). This code introduced new rules for the provision of public financing. The new formula distributed the funding among parties according to four criteria: electoral returns, seats in Congress, equal base, and party activities. Later, they added a fifth source, intended to support the development of small parties.

Regarding expenses, the COFIPE introduced electoral expenditure limits for the first time. However, these limits were so high that they failed to serve the purposes of the electoral reform movement. Suffice it to say that, according to regulations, a political party could have spent almost one billion new pesos in the 1994 federal campaign. At the rate of 3.5 pesos for dollar, that amounted to more than 263 million dollars. That is quite a sum for a country like Mexico.

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The COFIPE also established some procedures for the reporting and monitoring of party finances, although they are clearly ineffective. Anyway, compared to its precedents, the current law constitutes a considerable advance in the direction of regulating party and election campaigns in Mexico. Yet many political actors in Mexico still insist in the need of moving forward. The main objections against the current law are that it still allows enormous electoral expenses, and that it has too many loopholes that make it ineffective. The fifth phase of reform should deal, precisely with those issues.

The current movement of electoral reform is aiming at the establishment of fair play conditions in the electoral arena. The basic ideas are to lower the caps for donations and expenditures, to modify the formula for the allocation of public spending, and to fill the loopholes of the law to make it enforceable. To fulfill these goals, it is necessary to reform the electoral law, but also to restructure the institutional provisions for the overseeing of public expenditures. In the following pages, I will present a brief analysis of the problem.

The current regulation of party financing and campaign expenditures lacks precision and has too many loopholes. I have classified the different aspects of the financing issue using a matrix formed by four variables, covering the most relevant aspects of the issue. First, the matrix considers the basic distinction of income and expenditure. Second, it considers the private or public origin of funds. Third, it attends the period of regulation, separating the regular operation of parties, from the electoral campaigns. Fourth, it looks at the subject of the regulations, parties or candidates. The combination of these variables produces a matrix of 12 areas or arenas of regulation, shown in table 1. The shading of the matrix areas represents the degree of regulation in the COFIPE (darker areas being the more regulated ones).

[INSERT TABLE 1. HERE]

INCOME.Public funding (areas I to III): Article 49 of the current law regulates the public funding of political parties. This is the area of political financing that is better regulated, but still has some loopholes and deficiencies.

One of them is the almost complete lack of regulation of candidates. The Mexican electoral system is party-centred, and candidates as individuals play only a marginal role. This is especially true in the case of financial regulations. Generally speaking, parties, and not candidates are the beneficiaries of public subsidies and the subjects of obligations (thus, areas III, VI, IX, XII y XV in table 1 are not shadowed). In fact, one of the few mentions to candidates in the financial sections of the electoral law says that the national committees of parties shall

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determine the limits to the donations that candidates can give to their own campaigns (Article 49,11,a,II).

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This emphasis on parties and not candidate has had some advantages for the development of a party system in Mexico, but has also some negative consequences, because the lack of financial legal obligations may induce irresponsible behaviour in the candidates. The granting of some prerogatives to candidates in exchange for legal obligations may be in order.

There are some other weak points in the regulation of public subsidies to the parties, such as the situation of political parties that do not pass the threshold of 1.5% but get more than 1%. However, these are the areas that are better regulated in the current law, and most parties have agreed that the COFIPE needs only minor adjustments.

Income from private sources (areas IV a VI):In this issue there is consensus, and even PRI leaders have paid at least lip service to the reduction of the current ceilings. Currently, the individuals may give up to one percent of the total public financing of parties, and although corporations can not donate money to parties or candidates, “personas morales” can. “Moral persons" are similar to the Political Action Committees in the United States, and they can give up to five times the limit for individuals. In 1994, these limits were equivalent to $ 2,013,800 or US$ 575,371 for individuals ($10,690,000 or US$ 2,876,855 for collective entities). That “ceiling” is 600 times higher than the comparable figure in the United States, while the Mexican economy is 50 times smaller. Besides, the opportunities for evasion are much better in Mexico, and authorities have less overseeing capacity.

Additionally, the law regulates donations to political parties, but it says almost nothing regarding the candidates as individuals. Finally, it is necessary to strengthen reporting and monitoring regulations, because the current regulations make enforcement virtually impossible. The best example of these limitations is the infamous “Dinner of the Billionaires”. This was a “fund-raising” dinner offered by Mr. Antonio Ortiz Mena, former Secretario de Hacienda and former Director of the Inter American Bank. The dinner, was attended by President Salinas, Genaro Borrego, chairman of PRI, Miguel Alemán, Secretary of Finances of PRI, and by 29 of the richest Mexican entrepreneurs. There, President Salinas himself ask them for donations. The minimum cooperation per person was 75 million pesos each (21 million dollars), for a total target of 2,175 million pesos (725 million dollars). Supposedly, the owner of the largest Mexican broadcasting company, Televisa, replied that he would gladly give more than that (Chávez, 1993).

EXPENDITURES.Direct spending (areas VII to IX):

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For the first time, COFIPE introduced a set of regulations over direct campaign expenditures. This is one of the major steps toward a better financial regulation. Yet, current law shows three shortcomings:

First, as we said, spending limits are so generous that, in practice, they are no ceiling at all. To put it briefly: according to the 1994 regulations, a political party could have spent a grand total of $ 922'741,309 or US$ 263,640,374 in all four campaigns (one for president, 300 for deputies, 64 for senators, and 40 for members of the Mexico City Assembly).

If we compared those 263 million dollars with the amounts spent in the United States elections, the disparities are obvious. The current spending ceiling for presidential candidates that accept public funding in the United States is US$ 62 million, for the general election, plus US$ 15 million for the primaries, and US$ 12 million for the National Convention. The limit for the 1992 general election was US$ 55 million. In contrast, the limit for presidential candidates in Mexico during 1994 was US$ 40.7 million. Of course, the actual cost of an American presidential is much higher than that, because the official limit does not cover money spent by private citizens on behalf of a candidate or party. But then again, Mexican loopholes are so large that most analysts agree that the Mexican presidential candidate of the PRI spent much more than the official limit of US$ 40.7 million. Thus, at least on that issue, Mexican elections are not that far from American standards.

Of course, it is almost impossible to estimate the actual expenditure of political parties and candidates. Yet, one case, the “Tabascogate”, may illustrate the gap between formality and reality. This political scandal exploded when an anonimous source delivered dozens of boxes full of original campaign documents of the PRI campaign in Tabasco the PRD leader Andrés Manuel López Obrador. According to López Obrador, the documents proved that the PRI spent in Tabasco 270 million pesos, this is, more than double the amount offically spent by PRI in the national presidential campaing. The documents were sent to the Attorney General. After a long judicial struggle with PRI governor Madrazo, who tried to block a judicial investigation, the Attorney General said that there was fully documented proof of a total expenditure of 128 million pesos (36 million US dollars at the exchange rate of 1994) .2 That amount was 30 times higher than the officially reported figure. Madrazo’s scandal may be an extreme case, but at any rate, it tells us something about the gap between official reports and actual spending.

Besides, regulation over party spending is very lax. Accounting books are not mandatory, disclosure rules are almost non-existent, and fiscal overseeing is nil.

2 “Indagará PGR fondos de Madrazo”, Reforma, June 7, 1996.

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Indirect spending (areas X to XII):Another shortcoming of the law is that it does not regulate indirect expenditure, made by third persons on behalf of political parties and candidates. Thus, most observers suspect that large corporations spent considerable amounts of resources on behalf of the PRI candidates, without reporting.

Externalities (areas XIII to XV):I use “externalities” as an euphemism for the illegal use of public resources. This is the core of the problem in Mexico. Extensive patronage, and abuse of public funds on behalf of the government party, are the “open secret” of the PRI financial system. This is a problem that goes far beyond the scope of the electoral code, because it permeates the whole functioning of the government in Mexico. One party control of both Executive and Legislative branch has led to a long pattern of corruption and patronage. This goes from the direct use of government resources (money, personnel, equipment, logistic, information, etcetera), to the crudest forms of pork barrel politics.

This spoiled relation between PRI and government is so deeply entrenched, that its solution not only demands a complete overhaul of the laws dealing with the use and overseeing of public funds. It requires a major political change, because any institutional arrangement that we may devise, will succumb to the complete control of executive, legislative, and judicial offices by one party.

In 1994, PRI and PAN proposed their own reforms to the process of government expenditure overseeing. The main difference is that the PRI project allows the president to nominate the overseeing officers. PAN demands the strengthening of a multiparty system, with strong leverage of opposition parties in the comptroller’s office.

In sum, the agenda for the reform of political financing in Mexico covers the following aspects:

· Regulation of income and expenditure of candidates and elected officers, since this omission in the current law allows for evasion and induces the buying of candidates by big interests.

· Reduction of legal ceilings to private donations. · Reduction of ceilings for campaign spending.· Introduction of more effective overseeing instruments, and the

establishment of better accounting and reporting practices for political parties and candidates.

· Reform of the government expenditure overseeing process.

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2. MONEY AND ELECTIONS: AN EMPIRICAL ANALYSIS.Until very recently, we did not have serious studies of the financial aspects of Mexican elections only secrecy or rumors. See, for instance, the book of Mario Guerra Leal (1978), a corrupt opposition politician that unveils many anecdotes of how the government used public funds to corrupt opposition parties. Yet, the growing concerns of opposition leaders and public opinion has produced a vast number of articles and books on the subject of reform, and a few good empirical studies that provide some basic data (Jorge Alcocer, 1993, Arturo Sánchez, 1992, Oscar Hinojosa, 1994, Miguel Alemán, 1995). However, this still is an open field in Mexico. In the final sections, I will provide the basic figures of the financing of political parties in Mexico. Then, I will discuss some of the links between campaign spending and vote in the 1994 election.

2.1 THE PUBLIC FUNDING OF PARTIES AND ELECTIONS.Public financing of political parties in Mexico has not been an equaliser. Almost half of all the public funds allocated from 1989 to 1996 went to the coffers of the ruling party.

The formula for the distribution of public funds to political parties has a built-in bias against medium size parties, this is, against the stronger rivals of PRI. This is not an exceptional feature of the Mexican party system. On the contrary, we know that electoral formulas in Mexico have been biassed in favor of the largest and the smaller parties, punishing the medium size organizations (Molinar, 1991, Valdés, 1994, Weldon, 1995). The formula for the allocation of public funds follows the same principle. A brief analysis of the distribution of funds in 1996 will illustrate the point.


The current formula uses five criteria to distribute the public funding of parties. First, it considers votes. The largest part of the budget, covering almost 50 %, is proportional to party votes, and thus is unbiased.

Second, it considers seats. It makes 30% of the total budget. This track favors PRI, because PRI has been over-represented in the Chamber of Deputies, but especially in the Senate, for decades.

The third concept is called “general activities". It covered 12% of the 1996 budget, and it distributed funds evenly to all parties. This criterion has a built in favor of all parties bellow the average size of 16.6% (or 100% / six parties).

The fourth concept, which determined 5% of the funds favour the smaller parties (distributing a common fund to promote “the development” of political parties).

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The last criterion is variable, depending on the expenditure that each party devoted to research and development during the previous fiscal year.

However, the public financing of political parties has been instrumental in the growth of opposition. The amount of public financing to political parties grew constantly since 1989, following a seasonal cycle with peaks in electoral years (see figure 1). Yet, in dollar terms, it grew steadily from 1989 to 1994, but it has stagnated after then (see figure 2).

[INSERT FIGURES 1 AND 2 HERE]

2.2 EFFECTS OF MONEY ON ELECTIONS.The literature on the links between money, parties and elections is enormous (Alexander, 1976, del Castillo, Gunlicks, 1983, Heidenheimer, 1970, Malbin, 1984, Pinto-Duschinsky, 1981). For these two countries, we even have detailed empirical studies of the electoral effects of constituency expenditures (Green and Krasno, 1988, Jacobson, 1978a, 1978b, 1990, Johnson, 1979,1987, Krasno, 1994), which are rare or non-existent elsewhere. Two institutional features of these countries favour the production of suitable data, inducing scholars to study the issue. First, both countries had established regulations over the expenditures of parties and candidates. Second, their single-member-district electoral systems induce the disaggregation of data, while multi-member-district electoral systems induce the aggregation. For many years, Mexico has have single member districts, but, as I said before, until 1986 the law had very few provisions for the reporting of party finances. Provisions for the reporting of party expenditure at the constituency level were established for the first time in 1994. Thus, for the first time we can study the effect of expenditures in elections, with a caveat: these provisions are so lax, that we should expect all parties to under-report their expenditures. Anyway, the recently available data is the best approximation we have ever had3.

Obviously, there are very few studies available on the links of money and politics in Mexico, and none of them deals with the electoral effect of constituency level spending. Among the best studies available one should mention those of Ames (1969), Molinar and Weldon (1994), Brophy (1994), Davis and Coleman (1994), and Buendía (1994). Ames found that Government spent more in states with stronger opposition; Molinar-Weldon found a strong electoral relationship between an important government program (PRONASOL), elections, and parties. Specifically, Government spent more money in states having local elections and strong leftist opposition. Brophy found evidence that the leftist vote is positively

3 Additionaly, the reports show a big variance in the amount spent by parties at the district level. The variance is big between and within parties. This variance does not mean that the data are reliable, but the converse is true: a small variance in the reported expenditures would have been an additional motive of caution when using the data.

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related to inflation, and negatively related to income per capita. Davis and Coleman found that perceptions of welfare and access to government resources affect voters’ decisions. Buendía found a similar link between vote intention and evaluations PRONASOL.

Those studies show that economics, and money, matter, but there is nothing written on the relationships between electoral expenditure and vote intentions in Mexico. The reason is simple: until 1994, we had no data on campaign expenses. This section of my paper will deal specifically with the electoral effects of party expenditure at the district level.


Table 3 presents a national summary of the officially reported campaign expenditures of the main parties in 1994. As it can be seen, PRI candidates outspent opposition contenders by far. According to the report of the financial director of PRI, his party spent 325 million pesos in all federal elections in 1994. The second most expensive campaign, that of Partido Acción Nacional, PAN, came very far from PRI levels, totalling 43 million pesos, while the third party, PRD, spent less than 20 million pesos. The remaining six parties spent around 27 million pesos, or seven percent of the total. This means that PRI outspent PAN by a factor of 8 to 1, and PRD by a factor of 17 to 1. At the light of such numbers, there is no wonder in the PRI victory. The interesting aspect is that the margin of victory was “only” 1.8 to 1 against PAN, and 2.5 to 1 against PRD.

These figures are even more contrasting for the congressional elections, since opposition parties husbanded most of their resources in the presidential race, while PRI was able to spread them more evenly. For instance, PAN and PRD spent 75 and 60 percent of their total purse in the presidential race (that is, 32 and 11 millions respectively), while PRI reported a 128 million spent in the presidential campaign, which mean a mere 41 percent of its total reported expenditure. In fact, since that figure was just a few millions shy of the legal expenditure limits, it is not unthinkable that some money spent in the presidential campaign was distributed, for accounting purposes, throughout the other 404 electoral reports.4 Additionally, most independent observers agree that the official reports of the PRI were grossly underestimated. The “Tabascogate”, that I described briefly in a previous section of this text, makes the point.

Thus, we must accept that the figures rendered by all parties, but especially by PRI should be taken with more tha a grain of salt. However, I think that we can use them, because we know that the biass is to the underreporting of expenditures, and

4 These 404 reports correspond to reports 300 single-member seats in the Chamber of Deputies, 64 majority seats in the Senate, and 40 single-member seats in the Legislative Assembly of Mexico City.

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we can assume that this bias affect equally all candidates across all districts. At any rate, the fact is that while PRI presidential candidates, Luis Donaldo Colosio and Ernesto Zedillo, outspent the panista 4 to 1, and the perredista 11 to 1, the ratio is even larger in Congressional elections.

The numbers for the Chamber of Deputies are the following: PRI spent 104 million pesos, while PAN and PRD spent a little over 5 million pesos each. This means a 20 to 1 ratio in favour of PRI (which contrast poorly to a less than 2 to 1 ratio in electoral returns). Evidently, these contrasting ratios show that the “marginal productivity” of each peso spent by the priístas is much lower than the moneys spent by opposition parties.5

Regarding Senate elections, the ratios are similar. According to official reports of the 1994 election, PRI outspent its rivals by far. While PRI spent 80 million pesos, PAN spent 5 million pesos, and PRD only 2.5 million.

Given these enormous inequalities, the electoral victories of PRI seem all but inevitable. However, we still can learn something from the study of links between expenditure and vote at the constituency level. For that purpose, I have run a regression modeling of the PRI, PAN, and PRD vote at the district level (N=300). It measures, for PAN, PRD, and PRI, the electoral effects of campaign expenditures of all parties at the district level, controlling for previous electoral competitiveness, region, and some sociodemographic characteristics of the districts. The dependent variable is percentage of vote in the district. The independent variables are:

· PAN expenditure: thousand of pesos spent by each PAN candidate for deputy in his or her district, as reported to the Instituto Federal Electoral.

· PRI expenditure: thousand of pesos spent by each PRI candidate for deputy in his or her district, as reported to the Instituto Federal Electoral.

· PRD expenditure: thousand of pesos spent by the PRD candidate for deputy in his or her district, as reported to the Instituto Federal Electoral.

· Number of parties index: “Number of parties index” of each district. It is an index that varies from 1 to N depending on the concentration or dispersion of votes among parties.6

· North: A dummy variable. It is 1 if the the district is in the states of Chihuahua, Coahuila or Durango, and 0 elswhere.

· Northwest: A dummy variable. It is 1 if the the district is in the states of Baja California, Baja California Sur, Sonora, Sinaloa, and Nayarit, and 0 elswhere.

· Center-West: A dummy variable. It is 1 if the the district is in the states of Aguascalientes, Colima, Guanajuato y Jalisco, and 0 elswhere.

5 This finding is consistent with the “incumbent advantadge effect” found in the United States (Jacobson, 1978).6 It is a derivation ofd the Laakso-Taagepera “number of parties” index. For a discussion of the index and the exposition of its formula see Molinar 1991b.

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· D. F. State of Mexico: A dummy variable. It is 1 if the the district is in the states of Mexico of in the Federal District, and 0 elswhere.

· South: A dummy variable. It is 1 if the the district is in the states of Chiapas, Oaxaca, Guerrero, Tabasco, Campeche, or the southern tip of Veracruz, and 0 elswhere.

· Michoacan: A dummy variable. It is 1 if the the district is in the state of Michoacán, and 0 elswhere.

· Metropolitan population: percentage of population of the district living in cities of 50,000 or more inhabitants.

· Low salaries: percentage of population earning no more than one minimum wage.

· Industrialization: percentage of economic active population occupied in the manufacturing industries.

I introduced a measure of competitiveness to capture in a single variable the

relative strength of parties in the previous election. I introduced regional and socioeconomic variables because we know from previous studies that correlate with the parties' constituencies7.

The first two interesting findings are closely linked. First, I found that the coefficients for PRI, PAN, and PRD expenditures at the district level are not discernible from zero (see table 4). This means that there is no evidence that the PRI vote is affected at all by the level of campaign expenditure of any local candidate.8

The factors that explain most of the PRI vote variance are the level of competitiveness of the district, as meausred by the effective number of parties in the previous elections. I found that the PRI percentage of vote in the district fell 2,97 units for each additional unit of effective number of parties.

Regionally, the 1994 election was full of novelties, since tthe strongholds of PRI support were not the usual ones. For insance, the traditional southern stronghold became a weak region for the PRI candidates. On average, southern PRI candidates received about 7 percentual points less than the average candidate. Obviously, this trend reflect the conflicts of Chiapas, but also the strong PRD performances in the oild districts of Tabasco and southern Veracruz.

The performance of PRI candidates in the states of Mexico, D. F., and especially Michoacán (the state of Cuauhtémoc Cárdenas) were, as expected, poorer than the average. Yet, the strong performance of PRI candidates in the North, which is 7 For a discussion of these constituencies see Klesner 1994 and Molinar and Weldon 1990.8 The signs of the coefficients that measure the effect of PRI and PRD on PRI vote are as expected (positive and negative, respectively). The sign of the coefficient of PAN expenditure (positive) is not, but it is not statistically discernible from zero (it shows a small t-statistic of 0.51). The t-statistics for PRI and PRD coefficients are -1.40, and 0.49, as can be seen in table 4.

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suppossed to be a panista bastion was a big surprise. The surprise was specially big in Chihuahua, where PRI received its highest percentage returns, and defeated PAN candidates almost everywhere.

Regarding socioecomic variables, there are no surprises. PRI still performs better in rural and poor contexts (see the coefficients for metropolitan districts and districts with lower average salaries).

A second finding, or lack of, was that there is no evidence to support the hypothesis that the expenditures of PRI candidates for the Chamber of Deputies at the district level have any impact on the level of vote of their opposition rivals. Indeed, the coefficients that measure the effect of PRI expenditure at the local level on PAN, and PRD voting are not discernible from zero (see tables 5 and 6).9

These results are counter-intuitive, but they have a somewhat obvious explanation. These nil results do not mean that expenditure by PRI at the district level have no effect at all on the vote. What they mean is that when presidential and congressional elections concurred, the national presidential campaing of the PRI does most of the job of getting out the vote.

After all, the official expenditure of the PRI presidential candidate (128 million) was higher than the total expenditure of the eight opposition parties put together, including presidential, senatorial, deputies, and legislative campaigns (90 million). If we limit the comparison to the main opposition parties, then we find that the PRI presidential candidate spent twice as much as the 808 candidates for president, senators, deputies and legislators of the PAN and PRD combined.

The cottail effects of the presidential campaign expenditures are even more impressive if we look at the figures spent on mass media advertisement. This is a critical issue, for every survey polls found that most voters gathered their electoral information from radio and television. Of course, the presidential campaign of the PRI took the lion’s share of the commercial advertisement in the campaing. According to the official reports of campaign expenditures, the nine political parties spent 105 million pesos in commercial propaganda in press, radio and television. The PRI was the big spender, absorbing almost all the expenditure on mass media: 84 million, or 81% of that total. PAN came in a distant second, with 15 million, or 15 % of the total amount spent in media advertisement, and the rest of the parties make the remaining five percent.

Additionally, the concentration of resources spent in mass media by the presidential campaigns was even higher than in the rest. The nine contending parties spent 117 million in things other than media in the presidential campaings, which represents 38% of the total expenditures on non-media items by all parties in all their federal campaigns in 1994. In contrast, the nine presidential candidates

9 As it can be seen in the second line of tables 5 and 6, the t-statistics of the variable “PRI’s candidate expenditure by district level” are extremely low (0.33, and -0.38, respectively).

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spent 62 million, or 59% of the 105 million devoted to media advertisement by their parties in all their federal campaigns.

No need to say that most of those moneys came from the coffers of the PRI. The PRI presidential campaing was responsible for more than 47 million pesos spent in mass media, which amounts to 45% of all the resources spent by all parties in media advertisement. In fact, the presidential candidate of the PRI spent more money just in press, radio, and television than the total expenditures of the 3,000 non-presidential candidates of the eight opposition parties put together (47 million versus 39 million, respectively).

These tremendous inequities bewteen the campaign funds of the PRI presidential candidate and the opposition should suffice to explain the preponderance of the national campaigns over the constituency level campaings.

However, the study of the patterns of campaign expenditure at the constituency level do show some interesting findings. In particular, it shows that the Mexican electoral system induces competition among opposition parties, and not only between opposition parties against the government party. This feature of the Mexican electoral system has been instrumental in the survival of PRI.10

Table 5 presentes the determinants of PAN vote at the district level. Regarding spending, it shows that, ceteris paribus, panistas do better when they spend more money in their own districts, and that they do better as their PRD rivals spend more money in the same district. This is the expected effect of spending. According to the coefficients, the average PAN candidate gets one additional percentual point for each additional $14,304 (or US$ 4,086) spent by him in his own district. But it also shows that the average PAN candidate looses one percentual point for each additional $8,449 (or US$ 2,414) spent locally by his or her PRD rival. 11

These effects are simetric for PRD candidates. Table 6 shows that, ceteris paribus, PRD candidates do better as they spend more money in their own campaigns, and do worse as their rival panistas spent more money in the district. According to table 6 coefficients, the average PRD candidate gets one additional percentual point for each additional $6,220 (or US$ 1,777) spent by him in his own district, ceteris paribus. And just as in the PAN case, it also shows that the average PRD candidate looses one percentual point for each additional $14,751 (or US$ 4,214) spent locally by his or her PAN rival.12 As I said before, neither PAN nor PRD district level vote is affected by the expenditure of their PRI rival in the

10 See Leonardo Valdés 1994, and Jeffrey Weldon1995.11 The coefficient that measures the electoral effect on the vote for PAN of each thousand pesos spent by that panista candidate in his or her own district is 0.069 with a t-statistic of 2.90. The coefficient that measures the effect on the vote for PAN of the expenditure of his or her rival PRD candidate is -0.118, with a t-statistic of -1.84.12 The coefficient that measures the electoral effect on the vote for PRD of each peso per capita spent by that PRD candidate in his or her own district is 0.160 with a t-statistic of 2.77. The coefficient that measures the effect on the vote for PRD of the expenditure of his or her rival PAN candidate is -0.067, with a t-statistic of -4.69.

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district, because most of the PRI spending effects are accounted by the national presidential campaign.

Regionally speaking, PAN and PRD are almost a mirror image. The strongholds of PAN candidates are the Center-West region, where, ceteris paribus, they get 6 points over the party average. The weak regions of panistas were Michoacán, Federal District-Mexico, and the South, where, ceteris paribus, its candidates got 2.1, 1.3, and 1.1 points below the party’s average.

The strongholds of PRD are Michoacán, where they get, holding everything else constant, 20 points above average. PRD candidates also performed better than the average in the South and the area covered by the State of Mexico and the Federal District, where they received, holding everything else constant, 10 and 16 points above the average. Their weak areas are North and Center-West, where they received , 3 points below average.

Tables 5 and 6 also show that the sociodemographic correlates of PAN and PRD are simmetrical. PAN does better in metropolitan districts and in districts with high proportions of population employed in manufacturing industries (8 and 4.6 points above average). In contrast, the electoral support of PRD candidates is not strongly associated with the urban-rural continum, showing that PRD still gathers support both from the cities and the countryside. This is an important characteristic of the PRD, because it is the only opposition party that has made build some support in the rural areas (Molinar and Weldon, 1990).

Of course, these results should be taken with caution. First, because as I said before, we should assume that there is considerable underreporting of expenditures by all parties, but especially by PRI. Second, because these it will be interesting to compare the effects of constituency level campaign expenditure in presidential and non-presidential elections. Yet, these findings give us some interesting clues, until we get more reliable figures, and evidence from presidential and intermediate elections, these findings.

3. CONCLUSIONS.The electoral reform movement will continue to press hard for a complete overhaul of the system that regulates money and politics in Mexico. Attention will be focused in the following issues:

· Reduction of legal ceilings to private donations. · Reduction of legal ceilings for campaign spending.· Introduction of more effective overseeing instruments, and the

establishment of better accounting and reporting practices for political parties and candidates.

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Regarding our knowledge of the electoral effects of expenditure in political campaings, we have learn that the national campaing of the PRI dominates the whole system. Thus, constituency level expenditure by PRI candidates does not have a powerful electoral effect, at least when presidential and congressional elections concur. Yet, I have found that the system induces competition between opposition parties, and that the district level expenditure of opposition candidates do have a positive effect on their own votes, and an negative impact on the vote of their opposition rivals.

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DATA FROM FIGURE 1: (MILLIONS OF PESOS)

YEAR PRI TOTAL 1989 $ 9.9 $ 19.21990 $ 14.9 $ 28.71991 $ 48.2 $ 106.11992 $ 44.4 $ 86.21993 $ 66.5 $ 135.21994 $ 99.4 $ 201.31995 $ 72.5 $ 171.61996 $ 140.4 $ 289.7

DATA FORM FIGURE 2:(MILLIONS OF US DOLLARS)

YEAR PRI TOTAL 1989 $ 4.0 $ 7.71990 $ 5.2 $ 10.11991 $ 16.0 $ 35.21992 $ 14.4 $ 27.91993 $ 21.4 $ 43.51994 $ 29.5 $ 59.61995 $ 11.3 $ 26.81996 $ 18.7 $ 38.6

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