President, Congress, and Budget-making in Argentina and Mexico: The Role of Informal Institutions

Abstract

Latin American political systems are characterized by powerful presidential institutions vis à vis legislatures. Presidents hold significant power resources to control the budget process, leaving the congress as a mere rubberstamp. This situation is bolstered not only by formal institutional engineering, but also by informally institutionalized mechanisms at the macro (political system) and micro (budget process) levels. Building on the literature on institutions, executive-legislative relations, and budget-making, this dissertation addresses the following question: How have informal institutions influenced presidential control over the allocation of resources in Argentina and Mexico from 1994 to 2006? My core argument is that when political decision makers resort to informal macro institutions (control over nominations and political careers, and clientelism) and micro institutions (delegation of powers, and the tactical use of economic data and revenue estimates for budgetary projections,) this tends to enhance the power of the president and governors vis à vis the legislature in countries with PR electoral rules and low legislative reelection rates, or where there is no immediate reelection. This situation is enhanced under an economically favorable context - economic growth, low inflation rates, and a fiscal surplus - and a majority presidential contingent in Congress with high levels of party discipline. In this study, I draw on extensive interviews and analysis of budget data to trace the processes by which presidents, governors, and legislators exercise power in the budget-making arena. I find that divergence in the influence of informal institutions explains why the Mexican budget-making process has become more evenly balanced between the legislature and the presidency, while Argentina has seen budget-making power increasingly concentrated in the hands of the executive.