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For an alternate social policy: the production of public service.

I. Introduction

The crisis and economic adjustment policies of the 1980s added a dramatically high social cost to an accumulation of unresolved social problems. Data from international organizations reveal that close to half of all Mexicans now live in poverty, and of those, some 17 to 20 million are officially classified as living in extreme poverty, i.e., they are unable to afford even the minimum essential diet.(1)

Although the severe depression of wages and growing underemployment and unemployment (Gutierrez, 1989) explain a good deal of the deterioration in the social conditions of working people, another contributing factor is the reorientation of social policy and the 27% decrease in social spending between 1981 and 1989 (Poder Ejecutivo Federal, 1989a). The most relevant consequences of this situation are, on the one hand, a decreasing satisfaction of health care and educational needs, and, on the other hand, a marked deterioration of the public and quasi-state institutions that supplies these services.

The magnitude of the social problems contrasts with the lack of emphasis they are given in official proposals and measures taken to resolve the crisis. This is clearly related to the government's neoliberal approach, which emphasizes the fiscal crisis and the excessive size of the state. Thus, the strategy outlined in the 1989-1994 National Development Plan (Poder Ejecutivo Federal, 1989b) -- which is essentially a continuation and deepening of the neoliberal-neocorporatist project of the previous administration -- claims that social welfare will be achieved through economic growth based on private investment; state action as a solution to social problems is only emphasized in reference to aiding the most impoverished groups, particularly through Pronasol (the Mexican government's poverty program). However, a social policy with these characteristics represents a political problem for the government, which finds it necessary to present economic and social policies as though they were conceptually separate. This is expressed in the ideological formulation regarding how the state-as-property-owner is incompatible with the social state.(2)

Nevertheless, a growing number of social and political organizations are attempting to project alternate solutions to the crisis by giving maximum priority to social democracy. That is, they propose as the goal of their projects an economic recovery directed toward guaranteeing the fulfillment of the population's social rights. The existence of abroad current representing this perspective highlights the need to promote debate about the alternatives available to social policy as a state tool for addressing unresolved social problems and guaranteeing social rights.

This article attempts to contribute to this process by analyzing a specific area of social policy, specifically, the production of health and education services. The first section assesses the principal changes since 1983, recognizing the continuity of policies since that date and the current problems in this area. Then the article delineates the strategic axes of an alternate policy that (1) makes the strengthening and the democratic transformation of the public institutions that produce the services priorities, (2) favors the redistribution of social wealth toward the working classes, and (3) paves the way for eventually removing the obstacles to the integration of single systems of health and education with universal access. This allows us to clearly present the option implicit in the government's project and contrast it with the option delineated here. Only in this way can we generate an informed public debate, which is a necessary condition for democratic participation in the resolution of social and political problems.

II. A Diagnosis

As a point of reference to characterize social policy, one can distinguish, in broad terms, between two general models that are based on the character and importance of the state's role in regulating, producing, and financing activities designed to guarantee the welfare of the population. The first model would be an assistance-oriented social policy, in which social services are treated as commodities and state intervention is reduced to a few gestures of social assistance directed toward the indigent population. This social policy corresponds to the liberal state and is driven by the market. The second model would be a policy of social welfare based on recognizing that the population has a series of social rights that are a public concern and that the state has a duty to fulfill. This policy corresponds to the welfare state and is driven by state action in which the market is clearly subordinate.

Crisis and Social Policy

It is interesting to review certain aspects of the relationships among crisis, productive restructuring, economic policy, and social policy, since the corresponding debate tends to be more ideological than factual. There is general consensus that any solution to the crisis necessarily entails a process of productive restructuring to permit resolution of the problems of technological backwardness, productivity, and competitiveness. However, contrary to the general argument, neoliberal economic and social policies are not necessarily the means to achieve restructuring. An example is Sweden, where, under a social-democratic government and with a powerful trade-union movement, productive restructuring was carried out while maintaining an advanced policy of social welfare and preserving full employment and the previous wage levels (Therborn and Roebroek, 1986).

In contrast, where neoliberal policies have dominated, as in England and the U.S., social inequality has increased through a regressive redistribution of social wealth, while both unemployment and the size of the poor population have increased significantly (Taylor-Gooby, 1989). These changes have produced what Mike Davis (1986) has called a pattern of overconsumption-underconsumption. However, despite these features and the fact that the discourse of the New Right proclaims the end of the welfare state through a combination of cuts in social spending, privatization of public services, and the targeting of social spending solely on indigent groups, this agenda has not been implemented completely in countries with consolidated welfare institutions like England (Taylor-Gooby, 1989). Thus, during the onset of Thatcherite neoliberal policy, from 1975 to 1981, social spending was not reduced; in fact, it continued to grow, although at a slower rate (an average of 2.5% annually) than during the previous period. Social services were not privatized and a coherent policy of focussing social spending never materialized (Ibid.).

This discrepancy between discourse and deeds can only be explained as a function of real political processes. That is to say, to the extent that governmental action has to be submitted to the electoral test in countries with parliamentary regimes, the governing party cannot violate basic societal values without risk of losing the election. Thus, for example, while some privatization may be acceptable to a majority of the electorate, this is not true of the elimination of social benefits that in many cases have become universal social values (Therborn, 1985). Accordingly, only in the U.S., where workers' interests are not expressed clearly through a political party and where the poorest social sectors suffer substantial political exclusion, were there significant setbacks in social policy with a sustained process of privatization of health services and education (Navarro, 1989).

This situation marks an important difference between the developed countries and Mexico, since what is a discourse with limited practical implications in the former has become reality in our country. Here the neoliberal economic project has been instituted under conditions of political weakness on the part of workers, a situation explained by the corporatist regime of the state party and by the refusal of the Institutional Revolutionary Party (PRI) to recognize the defeat of its project in the 1988 electoral process. Thus, as a general tendency, there has been a serious rollback in the fulfillment of social rights and a switch toward an assistance-oriented policy in accord with neoliberal postulates. Moreover, it should be emphasized that the changes in social policy are taking place in the context of a selective social-security system and restrictive benefits coverage.

Tendencies in the Production of Services

In the area of health services and education, the central goals of neoliberal projects -- such as those being implemented in Latin America under the determined meddling of international agencies such as the World Bank and the International Bank for Reconstruction and Development (Marquez and Engler, 1990) -- are budget cuts, concentration of public spending on groups in extreme poverty, decentralization, and privatization.(3) In Mexico, the first three are explicit policies or easily observable. Although the intent to privatize has not been declared publicly, privatization is nevertheless clearly en route, as we shall see below.

Despite repeated declarations about the priority of education and health, important budget cuts for these areas were made in the 1980s. Consequently, by the end of the decade, government expenditures on health and education were even 27% less than in 1981, after having been cut in half in 1986 and 1987. In addition, the population grew by nearly 20% during the decade, resulting in a per capita decline of 38% in public spending on health and education.

Likewise, in relation to total public expenditures, spending on education decreased from 8% to 5%, while spending on health dropped from 4.7% to 2.7%. Contrast this decline with the high and increasing percentage of public expenditures dedicated to servicing the debt (from 25.9% in 1980 to 60.9% in 1989). It is also worth noting these tendencies in the context of United Nations recommendations that 8% of the gross domestic product (GDP) be spent on education and 5% on health: by the end of the decade Mexico was spending only 2.5% and 1.6% respectively.

Given the budget restrictions, current expenditures were privileged over investment. Thus, in the health sector overall, investment declined by 71% between 1982 and 1983, and by 1986, it represented only 30% of the 1982 figure. This tendency was even more marked in social security institutions where investment declined by 75% in 1983 and remained at the same level in 1986 (Ochoa, 1990). Likewise, in education, investments in physical plant declined and efforts already underway to consolidate basic services were suspended (PRD, 1990). This sustained restriction of investment not only impeded expansion of services, but also provoked a gradual deterioration.

The policy of focusing public spending on the most impoverished groups is most clearly expressed in the founding of Pronasol, an organization that has as its explicit goal the channeling of resources to groups living in extreme poverty. However, dating from the last administration, this policy has been carried out by setting institutional priorities and changing the schemes for financing distinct institutions. Thus, health and education institutions have been given the explicit priority of covering the basic level, i.e., primary care in health (SSA, 1984) and primary school in education (SEP, 1989), as budget allocations alternate between cutbacks and recovery. Additionally, during the last administration, the federal government reduced its financial obligations to IMSS (Mexican Social Security Institute), leaving almost the totality of its financing to patrons and workers, and channeled the freed-up resources to the Secretariat of Health (Diario Oficial, 1986).

Although the policy of focussing spending on the most impoverished groups might seem just, it must be judged within the socioeconomic context of Mexico and in relation to the social-policy model it implies. No one can deny the drama of extreme poverty experienced by 17 million Mexicans, but neither can one deny the fact that nearly half the population lives in conditions of poverty and that the absolute majority of workers are experiencing a serious deterioration in their living conditions. Given this situation, to focus spending on the poorest groups is not a just policy, but rather an ideological artifice to justify the state's neglect of its constitutional obligation to guarantee the social rights of all Mexicans. To this can be added the fact that Pronasol, which is administered at the discretion of the executive, is marked by political manipulation and clientelism.

The model of social policy taking shape is much closer to that of an assistance-oriented policy than to a policy of social security. That is because it does not present a social-policy scheme aimed at making social benefits universally available to the population; on the contrary, it is a model based on a redistribution of diminished public spending toward the poorest stratum at the expense of other pauperized sectors, as is clearly illustrated by the financing of IMSS.

The third central element of the neoliberal projects, decentralization, has been promoted in both the health and education sectors since the last administration and it continues to be a declared intention of the National Development Plan (PND). Again, this is a proposal that, in the abstract, may seem attractive given the oppressive centralism of the Mexican system. However, the characteristics and effects of decentralization demonstrate its serious limitations. Decentralization was decreed by the executive and has been implemented undemocratically -- from the top down. It couldn't be any other way, since it was never intended to redistribute real decision-making power over programs among those involved in the services, i.e., the government agencies, the clients, and the workers. Even had this occurred, it would have been a mere formality in Mexico's corporatist system, in which democratic mechanisms do not operate in the absolute majority of city governments and mass organizations, thus impeding any real representation of citizens and workers, both rural and urban.

In addition, the haste with which the process was undertaken did not allow for adequate technical preparation (Menendez, 1990). Under these conditions, the resources transferred to the state and municipal levels did less to increase institutional efficiency than to provide a pork barrel for local groups. Finally, the decentralization precipitated conflicts in both sectors between bureaucratic groups who tried to defend or promote their particular interests. Particularly notable among such conflicts are those between the Public Education Secretariat (SEP) and the National Union of Education Workers (SNTE) in the education sector and between the Health Secretariat (SSA) and the Social Security Institute (IMSS) in the health sector. In the face of such realities, decentralization appears to be suspended because of its very high costs in terms of institutional functioning. Nevertheless, given that the neoliberal variant of decentralization is a means of dismantling the state that permits the implementation of new schemes for service products and financing, it will probably continue once the necessary institutional adjustments have been made.

Problems New and Old

Among the problems provoked or aggravated by this social policy is, in first place, a growing inequality between the different groups and social classes in terms of real access to services, as well as the type and quality of services available to each. Behind such problems is the abandonment of a social-security policy whose goal it was to build singular education and health institutions with universal access. In contrast, the current policy results in the definitive separation and divergent development of the subsystems in both education and health.

Within the education system, there is an ever growing inequality of resources available to public and private services. Such a tendency cannot be stopped with a public policy of restricted spending, which means setting priorities not for education overall, but only for the primary level. Moreover, within the public school system, there is an unequal distribution of resources at the local and regional levels that leaves poor zones clearly disadvantaged and has an impact on educational opportunities. Thus, after a 6.6% increase in school enrollment in 1980-198 1, there has been a tendency toward stagnation since 1984-1985, with growth rates below 1%. In addition, of the children who enroll in primary school (grades one through six), 21% never make it to the third grade -- in other words, they do not become fully literate -- and only 61% finish sixth grade. The progressively exclusionist nature of the school system means that only 48.5% enter secondary school (grades seven through nine), 28.6% begin high school (grades 10 through 12), and 9.8% enter the university, of which only half finish (Fuentes, 1989). This pattern of unequal educational opportunities is closely linked to family economic conditions and tends to be most serious in rural areas. However, it is notable that the primary school completion rate from the Federal District declined from 86% in 1988 to 80% in 1989 (Poder Ejecutivo Federal, 1989a: 185).

The situation of health services is similar. Despite the formation of the National Health System during the last administration, this sector is divided into three subsystems:

1. The state sector, with a small budget, which directs services to the

population with the fewest resources;

2. The public social-security system, which is directed essentially to

organized workers and their families; and

3. The private sector, generally endowed with abundant resources and

directed toward upper middle sectors and the bourgeoisie.

While the state subsystem essentially guarantees selective primary care to those who are not members of the public social-security system and leaves 10 million without coverage (Ruiz de Chavez et al., 1988), the social-security institutes, in principle, cover those who qualify for all three levels of care. However, the demand for services increased substantially because of the increasing number of those insured by the public social-security system -- social-security coverage increased by 35% between 1982 and 1989 -- and of those excluded from private health insurance due to its high cost. Simultaneously, the budget per person insured decreased by 46% (Poder Ejecutivo Federal, 1989a),(4) forcing these institutions to strengthen the bureaucratic obstacles to access to their services. In this way, since 1986, when coverage began to increase rapidly, all indicators of services provided (general and specialization consultations, hospitalizations, births, etc.) have declined systematically in relation to the number of insured (Ibid.)

Another factor making access to public health and education services difficult is the introduction or the increase of various types of fees. Likewise, access to private services, which depends directly on economic capacity, has clearly been restricted due to their high cost and to the eroded buying power of many middle-income salaried employees.

Neoliberal policies have also led to an increase in serious labor conflicts in public institutions, by forcing public-service workers to shoulder the burden of resolving contradictions created by resource cutbacks. These workers have suffered marked wage decreases since 1983 (Rodriguez, 1990). Accompanying this phenomenon has been a growing wage differentiation between the public and private sectors. This situation tends to drain the public sectors of its most skilled personnel and channels them into the private sector.

Additionally, the processes of rationalization based on the ideas of scientific management of labor -- which conceives of the experience and initiative of workers not as a positive potential, but as something that should be regulated and suppressed -- have led to the growing vertical control of labor and the imposition of strict norms. The direct effect is a process of deskilling institutional labor. This situation has further contributed to the abandonment of employment in public institutions and to a recomposition of the skill levels in the public sectors, together with a tendency toward its feminization, as has become commonplace in poorly paid and unskilled jobs (Kent, 1986). Added to the deskilling of labor, there has been a deterioration in the conditions of work as a result of the policy of providing more services without a corresponding increase in the resources necessary to carry out the work. The public-service workers are the ones who must daily confront the pressure from clients and the complaints about deficient services, without being able to count on the material conditions and decision-making power to improve them.

The discontent of public-service workers is further aggravated because the decline in wages and working conditions has been unilaterally imposed from above and outside the framework of any effective bargaining. A sign of such discontent is the continual resurgence of democratic trade-union movements in health and education institutions.

Budget cutbacks, authoritarianism, the deskilling of labor, and poor working conditions have provoked a marked deterioration in public services that has contributed to an erosion of their prestige in society. Slowly, they have been transformed from institutions that legitimate the state (Navarro, 1976) to sites of social conflict in which clients who find it increasingly difficult to obtain services clash with those who produce the services under inadequate conditions. Conflict and eroding prestige are found most intensely in those institutions that have deteriorated most drastically, or in those used by organized sectors, or those most able to make their demands felt, such as the institutions of social security and higher education.

It is within the context of the growing deterioration and eroding prestige of public institutions, both state and para-state organizations, that we can discern the possible paths toward the privatization of education and health care. First, we must distinguish between charging for public services as a means of financing them and privatization per se. Second, it does not appear that the dissolution of public institutions, along the lines of what has been done to public enterprises, is being considered. The basic feature of privatization, then, is the parallel growth of private initiatives, with their expansion into sectors previously covered by the state. The privatization of some public services is occurring, but not to the extent that the private sector will become dominant in these areas, as it has, for example, in Brazil (Cordeiro and Zavaleta, 1987). Although these features are shared by both the health and education sectors, there are some differences in their concrete manifestations.

Privatization of education is being carried out directly, that is, with the increased number and importance of private institutions. For example, while the public budget dropped by 39% between 1982 and 1988, private spending on education grew by 24%, coming to represent 10% of total expenditure on education in 1988 (Fuentes, in PRD, 1990). Although this increase has occurred at all levels of education, particularly noteworthy is the growing importance of private universities, both numerically and politically. Take, for example, the well-known role played by the Instituto Tecnologico Autonomo de Mexico (ITAM) as an adviser and producer of cadre for the current government, or the rapid expansion of the Instituto Tecnologico de Monterrey, which now has 25 campuses throughout the country.

The expansion of private medical services runs up against the obstacle of its high cost (Ruiz de Chavez et al., 1988), and consequently it requires mechanisms for a guaranteed and stable market. The existing market among small, high-income groups is not a sufficient base for such expansion, which appears to be possible only through medical insurance, particularly group insurance. If this is the case, the clientele sought by private institutions will have to be organized labor, with incomes set above the minimum wage -- in other words, those making up the principal part of the population insured by the social-security institutes. Seen in this light, a series of developments appears quite logical: the deterioration and delegitimation of the social-security institutes, the state's partial withdrawal from financing them, the granting of unsolicited group medical insurance for groups such as university employees (SITUAM, 1990), and new regulations on the participation of foreign capital in insurance markets (Zepeda, 1990). These developments point toward the expansion of the private market through group medical insurance. The result of such a process would be to seriously weaken the social-security institutes, since they would lose their role as the motor force in the expansion of social-security benefits to the entire population and would be redirected toward providing services to the poorest sectors of workers and to administering programs such as IMSS-Complamar within the framework of an assistance-oriented policy. Thus, there would not be a direct privatization of the social-security institutes, but rather a privatization of services previously provided by them.

Another fact pointing to such a form of privatization is that private group medical insurance is now in place among employees of banks, the subway system, insurance companies, and many companies in Monterrey. Additionally, we must consider the fact that the production of medical services is highly and increasingly profitable: the before-tax income for the industry represented 63% of the gross product in 1989 and grew to 70% in 1988 (Ruiz de Chavez et al., 1988). Likewise, contrary to general belief, private medicine is now an important force within the Mexican health system: it employs 157,000 people and represents 40% of the gross domestic product of medical services (Ibid.).

However, in the face of the tendency toward privatization, there is an important countertendency toward the defense of public institutions. Thus, while it is true that the daily shortcomings and difficulties encountered by everyone tend to be interpreted as inherent to public institutions and as justifications for their privatization, there is a growing collective consciousness that the problem is not necessarily in public institutions as such, but rather in the policy orientation imposed on them. Consequently, in the union struggles of recent years -- e.g., those of the teachers, the IMSS, and the university employees -- and in the struggles of the "users," there has been an insistence on the defense, recovery, and democratic transformation of public institutions. When this has occurred, the conflict between workers and users has been converted into a strategic alliance around common goals, which forms the trench of resistance against the neoliberal project and the embryo of a project for alternative change.

III. For an Alternate Policy

This analysis of the development and the current situation of health and education services reveals the necessity of proposing a total reorientation of social policy and, within this framework, of delineating the strategic principles for solving the problems described. The task, then, is to make a proposal that allows for overturning neoliberal social policy and to put forth feasible measures that favor a democratic transformation, strengthening, and expansion of public institutions, as well as a deepening of their role in redistributing social wealth toward the working classes. We must caution that feasibility has to be addressed in economic and political terms. This reality should be considered as the starting point for an alternate project, so that its construction can help change the correlation of forces in favor of the popular-democratic bloc.

Universal and Free Public Services

The complete reorientation of social policy will rest on the basic principle that the state has the obligation to guarantee social rights; in other words, fulfillment of social rights is seen as a public function. In the Mexican case, this means reclaiming the constitutional mandate regarding social rights as a central guideline of a social policy based on a universal public system of social welfare. Any proposal not based on this principle tends to deepen social inequality.

The dichotomous public-private health and education systems have been shown to have serious disadvantages from the point of view of social equality. This can be illustrated with the case of the United States, where the private sector has become the main obstacle to the establishment of a national health service, because it considers this a threat to its particular interests and has sufficient power to block it (Whities and Salmon, 1987). In other words, one of the principal problems stemming from the development of an important private sector is that it acquires the strength to block and confine the growth of the public sector. Moreover, the model of private production of services increases their costs and creates coverage deficits. Thus, for example, no other country spends as much on health care as the United States -- 11% of GDP -- without even providing services to all of the population -- 16% are without stable coverage (Navarro, 1988).

Under current conditions in Mexico, it is not possible to immediately restore public and egalitarian systems of education and health care with universal and free access; moreover, obstacles are greatest in the health system. However, there is no impediment to taking specific measures aimed at paving the way to that goal. This would necessarily mean a central, active, and dynamic role for the state.

Democratization of Public Action

Today, antistatist discourse is fed by the discrediting of state activity characterized by the authoritarian and discretionary exercise of power, favoritism, bureaucratism, clientelism, inefficiency, and corruption. The discourse of privatization builds on this real situation and proposes only one solution to such problems: transfer many of the state's functions into private hands. Yet this obscures the alternate solution, which is the democratic and technically competent transformation of state activities and institutions.

Many of the current characteristics of state action stem directly from the Mexican political regime -- presidentialist, run by a state party, and based on corporatist domination of society -- that has been further unbalanced by the now hegemonic group. The precondition for transforming the state and public affairs is, therefore, the destruction of the current political regime and the construction of another based on political democracy free of corporatist domination. However, building a new public practice also requires:

1. Promoting a series of concrete changes that guarantee new power

relations between civil society and the state;

2. Sufficient resources distributed on an equitable basis;

3. Effective mechanisms to regulate and control public and private activity;

4. Honest public functionaries trained to do their jobs.

In Mexico, a system of electoral competition between parties representing the different social and political forces would be a mechanism to redistribute power between the state and organized society, since the party projects would have to submit themselves to a popular vote. Likewise, a different distribution of authority and duties among the executive, legislative, and judicial branches would allow for greater citizen involvement in the conduct of the state. However, for the theme addressed here, it is necessary to go beyond electoral democracy and a new division of powers, to propose specific mechanisms to implement the four points noted above.

The organization of the Mexican state confers extraordinary power on the political bureaucracy, something that, under the current rupture of the social pact of the Mexican Revolution, prevents the correlation of forces in society from being expressed through public institutions. Likewise, both because of its historical formation and of the sharpening of general sociopolitical and high-level intra-institutional contradictions, the political bureaucracy has become so autonomous that it is now possible to talk about the rise of a "bureaucratic subject" (Kent, 1987). To break this extraordinary bureaucratic power and to continue with the democratization of the institutions, the correlation of forces in society must be expressed in the institutions, and, in addition, a new correlation of institutional forces must be built.

Bureaucratic power is based fundamentally on control over decision-making processes and state resources. Therefore, it is necessary to provide mechanisms that diminish the discretionary powers of the upper bureaucracy and force it to:

1. Subject itself to general policy guidelines that are democratically set;

2. Share decision making with those involved in the specific problems

(workers and consumers); and

3. Submit their actions to a systematic evaluation by organized society.

One such mechanism would be to establish a system of democratic planning (not just nominal) to set the general guidelines for social policy and the goals for change, subject to approval by the legislative branch. Likewise, an aspect of the powers and duties of the planning bodies would be to systematically evaluate and report on the results of the programs, in terms of problems solved or real changes made, rather than on the basis of actions taken. That is, health programs should be evaluated in terms of how they have improved health conditions and not, for example, based on the number of consultations or vaccinations givens, etc. Education programs should be assessed in terms of decreased illiteracy rather than the numbers enrolled in adult education, or in terms of our collective ability to resolve the scientific-technical problems of society, rather than the number of research papers published.

If one of the central goals is to construct a new correlation of forces and one that is expressed in state institutions, then we must also base planning on the concept of strategic planning, particularly as formulated by Testa (1987), in which a central element is the problem of institutional power in its technical, administrative, and political manifestations. "Policy" is defined as a proposal for repartitioning power and "strategy" as the form of putting a policy into practice. To present the problem in these terms focuses the question of change as conflict between social and political forces and allows us to think about the implications of different strategies in terms of the strengthening or weakening of the forces involved (Chorny, 1990). In this general framework, it is also necessary to develop specific regional and local planning in the hands of representative, decentralized agencies with real power supported by the information necessary to make decisions.

Democratic and Egalitarian Decentralization

Another means of changing public action would be the process of democratic decentralization, as distinct from current decentralization. However, given the difficulties in making decentralization democratic and egalitarian (Belmartino, 1989), we would first have to guarantee the resolution of various problems.

The first revolves around the question of equity and its relation to the content and quality of services, as well as to funding schemes. In this regard, there would have to be guarantees that decentralization would not become a pretext for providing selective and cheap services to the poor in a public subsystem, while maintaining other types of services in the other subsystems (Menendez, 1990). Given that this separation is justified by the shortage of resources, funding must be managed with national redistributive criteria. In other words, we cannot have funding schemes based on local taxation that tend to broadly reproduce the inequality among rich and poor states and cities. In addition, even though there should be decentralized decision-making power, this must not be allowed to depart from the general social-policy guidelines. This is particularly important in Mexico where, even assuming a radical change in the political regime, structures of local control will not necessarily be broken open.

A second type of problem is related to effective democratization, given the many negative experiences with "popular participation," e.g., in the form of health committees or parental associations. Therefore, it would be necessary to establish management bodies made up of popularly elected representatives from parties, social organizations, and the institutions involved, and endowed with the power to make decisions, manage resources, and evaluate programs. These bodies should have sufficient authority, within the general guidelines, to solve specific problems at the local level and the responsibility to account for their actions before those they represent. At the same time, this involves a struggle against authoritarian and clientelist practices and coming up with mechanisms to provide the necessary elements of judgment to the members of the management bodies, so as to avoid their being controlled by those with exclusive access to scientific-technical knowledge.

The third type of problem is the need to develop technical and administrative skills at the local and state levels, since incompetence in these areas has caused disasters in the already weak services of the periphery. Access to resources and democratic management will do little good if those administering the programs don't know how to make them work. The problem is not simple, because it involves simultaneously seeking to maximize technical and administrative competence while minimizing the predominance of technical-administrative power; this can only be carried out with a new political culture.

Finally, it would be necessary to guarantee that decentralization would not diminish the labor-union rights of workers through the pulverization of their unions or the disappearance of national collective contracts. In addition, it will also be necessary to thoroughly democratize these unions, a process already under way, especially among teachers. In this context, we should underscore that union democratization is not only a legitimate demand of the workers, but also a condition for democratic decentralization, which requires genuine representation of health and education workers.

Strengthen, Transform, and Democratize Public Institutions

The final goal or, if you prefer, the utopian horizon put forth in the proposed alternate social policy is a universal public system of social welfare. As noted, this project faces serious obstacles in the short run, but the proposed measures should lead in the right direction and contribute to its construction. Given the specific characteristics of the health and education systems, the concrete steps toward institutional reorganization and reorientation are different in each case.

Thus, bringing about a free unitary health service with universal coverage and access requires undertaking the integration of the public and social-security subsystems. The first steps, then, would be to establish a Secretariat of Health and Social Security, a single social-security institution, and uniform legislation, norms, orientation, and content of institutional services and financing. The principal problem is to avoid allowing the integration of the institutions to lead to even greater deterioration of services because of a sudden excess of demand, since this has been an important element in delegitimating health reform in other countries.(5)

There is also an immediate need for reconstruction and strengthening of the institutes, to reverse their deterioration and improve the quality of services. This entails providing them with the necessary resources and mobilizing the collective and creative capacity of the workers; both questions will be addressed below. Likewise, improving institutional action entails an emphasis on preventive and primary health care, with maximum and integral attention paid to establishing programs at the municipal and community levels, with the participation of democratic bodies and labor unions in planning and management. However, complete fulfillment of the right to health protection does not permit restricting access to primary care; rather, it requires the harmonized growth of all three levels of care and the construction of a system of referral and counterreferral.

Given that the education sector is divided between the public and private systems, the problem is to strengthen the public system and to recapture its role as rector of education and scientific research. As with the health system, this means making available the necessary resources and mobilizing the creative capacity of the workers.

In light of the growing numbers of people without access to the basic cycle and their exclusion at successive levels of education, a maximum priority must be to guarantee that the basic cycle is obligatory and free, and to begin creating conditions that favor real access for all youth to education. Likewise, it is necessary to reinforce the role of public institutions of higher education, both in the formation of professionals and in research into the strategic problems facing society. Achieving these goals, however, depends not only on a quantitative expansion of educational institutions, but also on changes in curricular and research orientation and pedagogical innovation, so as to address the demands created by the necessary expansion of educational access to the masses of the population (Fuentes, 1988).

Strengthening the public sectors requires an express policy regarding the private sectors in health and education, since, as we have seen, they tend to mutually condition one another. Therefore, it is necessary, first to regulate the private production of services, establishing both norms of quality and price controls. It is also necessary to reverse the tendency of the private sector's increasing weight so that it does not gain greater political force and become an obstacle to the expansion of the public sector. Likewise, we will have to consider specific mechanisms of control over the pharmaceutical and medical-equipment industries, to reduce their high cost and influence over the model of care.

Another central aspect for improving and transforming public services is to restore, in the near term, the economic and working conditions of public workers and to rehabilitate organized labor. This would permit bases to be established for a new "institutional pact" in order to mobilize the collective ability of the workers to creatively confront the necessities of health and education. Without such a basic institutional accord, the best programs would fail upon encountering the resistance of the workers.(6) The rehabilitation of labor means a process of permanent training and updating of skills and information, but it also means a reorganization of labor to increase workers' control and decision-making ability over their labor. Along with this goes the need to reestablish democracy in the labor unions as an integral part of institutional democratization.

Democratization of the management of the institutions is part of the general democratization of public action. Thus, it means establishing management bodies with the effective participation of workers and users, harmonizing their functions with those of other democratic bodies. Particular attention must be paid to the criteria for democratically appointing the leading cadre of the institutions and of setting norms for their performance. Minimally, these should include professional ability and the duty to carry out policies set by the management bodies and to be accountable to them. Likewise, we must undertake a vigorous fight against the various forms of corruption and abuse of power, submitting the management of institutions and public funds to censure by the democratic management bodies with the aid of systematic audits.

Increase of Resources and Redistribution of Social Wealth

The main argument made to justify the neoliberal slant of social policy is the scarcity of resources, which has allegedly required the cuts in social spending, the focusing of resources on the poorest groups, and the increasing responsibility born by society (read each individual) for satisfying health and education needs. As a consequence, public services have been turned into a marginal instrument for the general redistribution of social wealth, since they have almost no impact on the extremely asymmetrical distribution of disposable income between profits and remunerations (Poder Ejecutivo Federal, 1989a). Moreover, with the policy of maintaining a budget surplus so as to guarantee debt-service payments, working people do not even get back as public services what they paid out in the various taxes that brought in income six times greater than social spending (Ibid.).

Thus, it should be clear that the current policy of maintaining health and education spending levels below international norms is not an unavoidable necessity, but rather a conscious choice. An alternate policy, based on different priorities, would allow for a rapid increase of the state's budget and the channeling of resources into social spending,(7) with the added advantage that a greater supply of public health and education services is not necessarily inflationary. In addition, a policy of wage recovery would automatically increase the incomes of the social-security institutes, since they are directly proportional to the wages of the insured.

However, to channel the necessary resources for the universalization of high-quality public services and turn them into a real mechanism for redistributing social wealth would require a fundamental revision of distributive policy, both in terms of wages and taxes. Regarding the latter, and directly related to the problem of financing health and education services, special taxes directed specifically toward these services and a substantial increase in social-security quotas should be explored. Possible special taxes could include taxes on the sale of private health and education services and on alcohol and tobacco. The first is justified because of the high profit levels in the production of private services (Ruiz de Chavez, Marquez, and Ochoa, 1988). Regarding alcohol and tobacco, there are several ways of implementing a tax; one way would be to prohibit advertising these products and to establish as a tax a percentage equivalent to advertising expenditures, which would not affect the price structure -- or, alternatively, to set a tax of 100% on sales that would additionally satisfy those who believe that price is a disincentive to consumption.

Increasing social-security quotas paid by employers has the attraction of directly changing the distribution between profits and wages, assuming that the increase would not be passed on in the final price of the product. In addition, increasing Social Security payments has been one of the principal mechanisms for increasing state income in other countries (Baillet and Zimmermann, 1989). This could be an important mechanism for financing the construction of universal health and education services.

Within the framework of substantial and increasing expenditures on health and education, it would be possible to set up financing schemes that would lead to more rapid rates of growth in the most backward areas without sacrificing spending directed toward all public services. That is, an alternative with such characteristics sets priorities for a general expansion of public services and, within this framework, seeks to resolve in the short run the main accumulated problems -- all of which runs counter to the current policy of restricting public resources and then focusing the reduced spending on the poorest groups.


(1.) See the PNUD study, Proyecto regional para la superacion de la pobreza, Mexico, 1989, cited in Provencio (1989); and Rojas (1990). (2.) See Table 1 of Primer Informe del Gobierno (Poder Ejecutivo Federal, 1989a). (3.) See, e.g., Contreras (1986), Haignere (1986), Bello (1983), Balmartino and Bloch (1984), and Fleury (1989a). (4.) Figure adjusted according to the National Consumer Price Index. (5.) See, e.g., Fleury (1989b) and Berlinguer (1982). (6.) See, e.g., Fleury (1989a) and Torresgoitia (1987). (7.) See, e.g., Clark (1989).


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Title Annotation:Latin America Faces the 21st Century
Author:Laurell, Asa Cristina
Publication:Social Justice
Date:Dec 22, 1992
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