Mexican President-elect Andres Manuel Lopez Obrador pledged Sunday in his victory speech night to eradicate corruption and to hold his friends and supporters accountable. The Instituto Mexicano para la Competitividad (IMCO) has an easy way citizens can see whether he keeps his promise.
IMCO prepared the chart above from a massive analysis it conducted of Mexican federal government procurement data. The chart shows that when Lopez Obrador’s predecessor, Enrique Peῆa Nieto, took office in 2012 there were 73 companies that between them had won 29 percent of all the public contracts awarded that year. But as Peῆa Nieto settled into office, these firms won fewer and fewer contracts. As the blue line indicates, their share of the procurement market plummeted — from 29 percent to barely one percent in the space of four years — a remarkable change in any market let alone one marked by the stability common to public procurement markets.
By contrast, a second group of companies prospered extraordinarily during Peῆa Nieto’s first four years in office. As the red line on the chart shows, whereas in 2012 between them they had won but 2% of the total amount awarded, by 2016 their share had jumped to over 32%. Once again, a very large, very unusual change in market share in such a short period of time.
Readers of this blog (here and here) and the Mexican press will know that the extreme volatility IMCO spotted in the nation’s procurement market is likely not the result of some unseen economic turbulence. Rather, most probably it results from Peῆa Nieto paying off supporters. For decades, press accounts had suggested this was happening. IMCO’s data now makes these suspicions ever more patent.
Only a detailed investigation of an individual procurement will prove whether it was corrupted. IMCO’s data shows it is long past time to undertake such investigations and it provides a road map for auditors, journalists, and opposition parliamentarians looking for where to start. It also provides the president-elect with a way to monitor whether his underlings will abide by his election day pledge or fall back into the old ways that have characterized Mexican politics for too long.
Congratulations Mr. President-elect on your victory and click here to view IMCO’s web site.