July 5, 2018 Print

From left to right: Panel participants at “The Architecture of Branch 23” Press Conference. Academic Denise Dresser; Ex-Minister of Tax Administration Service, Aristoteles Nuñez; México Evalúa Executive Director, Edna Jaime; and Senator Martha Tagle.

México Evalúa, an Atlas Network partner based in Mexico City, is a civil society organization that monitors the Mexican government’s operation in order to raise the quality of public policy outcomes. Its recent study, “The Architecture of Branch 23,” used data analysis — along with eight state-level case studies — and found that the federal government uses funds from a department referred to as “Ramo 23” (Branch 23) to extend political influence over states.

Despite the fact that the Mexican Congress handles editing the annual budget, there is no specialized body to review how the budget is used. Many Congressmen are also not fiscal specialists, so incorrect and insufficient macroeconomic projections are often used for the budget approvals. The lack of fiscal controls, combined with the absence of a specialized body to review the budget and monitor its implementation, allows for intentional misuse of funds.

From left to right: Ex-Minister of Tax Administration Service,Aristoteles Nuñez and Senator Martha Tagle, speaking about the importance of the Branch 23 study and its implications for fiscal policy.

“This study focuses on how the Congress acts in an omissive, and I would even say a submissive way, sometimes acting as an accomplice, when it comes to budget oversight,” said Martha Tagle, a senator in the Mexican Senate. “I think it is very important that we, as legislators, generate the necessary reforms, like the ones this study proposes, in order to control government income and how Branch 23 resources are spent.”

México Evalúa’s analysis revealed that in past election years, the party in power has increased the amount of Branch 23 funds transferred to allied state governments, while reducing the transfers to state governments controlled by opposing parties. This has occurred under both Institutional Revolutionary Party (PRI) and National Action Party (PAN) administrations, leading researchers to hypothesize that ruling parties use Branch 23 funds to “buy” state governments’ loyalty and bolster their party’s efforts to win presidential elections. From 2013 to 2017, the study reveals that while the Mexican Congress approved Branch 23 transfers totaling $1.5 million USD, the executive branch actually spent $16.7 million USD.

“The way that Branch 23 operates is not accidental,” said Edna Jaime, general director of México Evalúa. “We are confronting an institutional architecture that has already exceeded its limits because it permits authorities to make decisions without guaranteeing objectivity and this results in poor quality public spending.”

From left to right: México Evalúa Public Finance and Accountability Program Coordinator, Mariana Campos, explains the Branch 23 study methodology, accompanied by academic, Denise Dresser.

México Evalúa’s study brought the issue to the mainstream, with 228 mentions in national media outlets discussing the need to better regulate Branch 23 funds, including La Jornada, El Economista, Bloomberg TV, and ADN 40. Additionally, Senator Tagle, Senator Gabriela Guevara, Senator Luis Francisco Bohórquez, and Deputy Jorge Maynez publicly expressed their commitment to promote legislation based on México Evalúa’s recommendations in order to regulate Branch 23. As a final result of the study, the Citizen Participation Committee, part of the National Anti-Corruption System, added the need to better regulate Branch 23 to its work agenda. This committee is charged with holding the government accountable to citizens and was created as a result of one of the largest civil society initiatives in the country’s history.

Read “The Architecture of Branch 23” (link in Spanish). 

México Evalúa has received an Atlas Network grant from Atlas Network in support of its work on the project.