Generating Participation and Democracy: An Illustration from Electricity Reform in Mexico

Abstract

Privatisation is a fundamental issue for both ‘developed’ and ‘less developed’ countries. Many see it as a requirement for access to a globalised economy, and furthermore imply that countries have no room for manoeuvre when it comes to ensuring that privatisation takes place. However, we would argue that a mere requirement leaves options for how privatisation is to be undertaken. We consider the possibility of an economy developing according to the aims of its people, and correspondingly of a privatisation model that contributes to the nurturing of democratic economies. How this might be achieved in practice is addressed by using the specific case of electricity in Mexico as an illustration. We explore an ownership and control structure that balances different interests. It is envisaged that pension funds could be important, linking investment back to individuals and groups with interests wider than those usually associated with international investors. While this could move towards the guiding principle of democratic control, it would fall short of being fully inclusive. Therefore a more direct incorporation of citizens, through a formal right to participate in strategic decision‐making, is also contemplated. Various governance mechanisms are identified that, with further refinement and positioning in the context of particular cases, might allow effective participation to be realised.