Perhaps the true reasons behind Fox's co-optation will not be known until he leaves office. But it seems that Fox has stopped governing the country, or even trying. Lately, a string of reports and books have appeared about the corruption of, and wealth allegedly amassed by, the first lady's children, further isolating and weakening the president.

Moreover, Fox cannot point to any great strides in producing a more prosperous Mexico. Though feeble economic growth over the last several years--resulting in large part from America's recession--is not his fault, the worsening quality of government largely is. According to several leading surveys (among them Transparency International, the World Bank and the World Economic Forum), corruption has increased, while government and business efficiency have declined. It is true that under the Fox Administration some small progress has been made in foreign investment and education. But these were trends inherited from Zedillo. Fox trumpeted a government study claiming that poverty had decreased 2.1 percent in his first three years. As it turned out, this was mostly due to migrants' increased money transfers to their relatives--which, as the IMF reminds us, is not a substitute for sound economic policy.

As in all botched transitions, the revival of the old regime was almost inevitable. The PRI has blocked Fox's most important proposals in Congress, including labor, energy and tax reform, and has used its networks inside the federal government to continue funneling resources to its campaigns. The main theme of the PRI's successful campaign for the 2003 midterm elections was "The government of change changed nothing."

So, although many believed the PRI would be finished after its 2000 defeat, it has bounced back with vigor as the Fox Administration and the PAN have faltered. It has won virtually all the gubernatorial races since 2000, and it regained its congressional plurality after the 2003 elections. The disenchanted Green Party left Fox and allied itself with the PRI. Suffering from "learned helplessness" as the perpetual loser since its founding in 1939, the PAN did not react to these outrages until recently. Today, however, some of the liveliest criticism of Fox can actually be found in the PAN's official magazines, such as La Nación and Kratos.

The most ominous question is whether Mexico at the national level is following the trajectory we saw in the northern state of Chihuahua during the 1990s. There the PAN won a historic victory in 1992, taking over the governorship--but six years later the PRI returned to power and imposed once again its managed pluralism and electoral fraud. One chief reason for the loss seems to be that the PAN governor had used a personnel strategy similar to Fox's, thereby dooming his party to a pyrrhic victory.

The Post-2006 Outlook

THE LEAST pessimistic scenario for the 2006 presidential elections contemplates a less ambivalent reformer winning. The perceived frontrunner has been Mexico City's mayor, Andrés Manuel López Obrador, or "El Peje" as he is popularly known, of the Party of the Democratic Revolution (PRD), the renamed Communist Party that merged with a disenchanted branch of the PRI in 1988. Beloved of his poor constituents for his irreverent style, populist message and positioning as a victim of the system, Peje was made into a hero recently because of a clumsy attempt by Fox and the PRI to legally prevent him from running for president. But a string of corruption scandals by his close associates helped weaken Peje and put him on the defensive, and his rhetoric is becoming increasingly menacing. His and his party's closeness to Castro, their anti-Americanism and their financing by some of the oligarchs they criticize are bound to add even more strain to the divisive PRD in the run-up to the elections in July. In addition, Peje's popularity in Mexico City may not translate into the rest of the country, where the PRD barely has a presence. This was most evident in the recent elections in the Estado de MŽxico, the country's most populous state, where the PRD faced a crushing defeat despite Peje's direct involvement.

Another scenario is Fox's party winning again. Though some pundits rule this out, the PAN still has a good chance. Unlike most liberal parties that overthrow a dictatorship, the PAN remains surprisingly united. Though it has lost most elections since 2000, the PAN may yet see what party insider René Bolio calls the "tsunami panista." Bolio points out that although the PAN has indeed lost most gubernatorial elections since 2000, it has actually obtained a record share of the vote within many of those states, even making inroads into traditionally hostile territory. Whereas the Fox-friendly interior minister, Santiago Creel, had been widely seen as the likely presidential candidate, the frustrated party faithful instead chose Felipe Calderón, a former party chairman at odds with Fox. One dark horse had been the former governor of Jalisco state, Alberto Cárdenas, who is well respected in PAN circles for his radical reforms that essentially crushed the PRI machine and prevented its return.

Regardless, the PAN may not be the hope it was in 2000. While it failed to change the cozy PRI system, the reverse may not be so. Reports of previously unheard-of corruption among PAN officials, closeness to the PRI oligarchs, the television duopoly, and opportunities for profit and power may have corroded the once pristine PAN into another cog in the system. Since the PAN is Mexico's largest liberal party, its perceived lassitude could further discredit the idea of economic liberalism and democracy.

Of course, a possible scenario is a victory for the PRI. The likely candidate is former Governor and party Chairman Roberto Madrazo. A victorious PRI might then reabsorb the PRD and thereby unify the main leftist and populist forces in one tent, although the PRI has both the will and many of the tools to reconstitute its system of managed pluralism by itself.

No matter the outcome of the elections next year, Mexico will not collapse for failing to reform, and some growth will return in tandem with growth in the United States. But this does not mean that all will be well south of the border.

Surveys reveal that the citizens' faith in political institutions, including parties, has decreased during Fox's presidency--witness the record absenteeism in the 2003 midterm elections. If this trend continues, the party system itself could be discredited, opening the door to a Hugo Chávez-like figure. Colombia-style terrorism and guerrilla activity may also increase. According to Pax Christi, a Catholic human rights group, Mexico is just behind Colombia in kidnappings in Latin America. A leaked federal report also detailed how the Zapatista camps and guerrillas in Chiapas (which captured the world's imagination in 1994 but are suspected of receiving support from narcotics trafficking and former insurgents in Central America) had essentially trebled since Fox unilaterally evacuated the army in 2001. In addition, Cuba has sent upwards of 500 "educators" and "sports instructors" to various parts of Mexico on the invitation of PRD governors. Such figures were crucial in Chávez's consolidation of power in Venezuela.

On top of the prospect of renewed social and political unrest is the reality that the reform movement in Mexico has stalled. Unlike central and east European countries--which, in addition to a desire to "return to Europe", also had to meet assorted political and economic criteria in their bid to join NATO and the European Union--there are no equivalent pressures on the Mexican authorities to continue with the reform process. Besides lack of will by most of the elites, there is no national consensus as to where the country--with half its population living below the poverty line--should go. The civic-minded but small middle class cannot stop a form of perverse symbiosis between the other two classes. The cynicism of the elites is compounded by the unfortunate Mexican (and Latin American in general) proclivity for tolerating--even admiring--corruption and the corrupt. This all but ensures that developmentally, if not politically, Mexico will remain in the Third World for decades to come.

What about the Special Relationship?

BECAUSE MANY in the U.S. foreign policy establishment--including, at the time, candidate George W. Bush's foreign policy advisors Robert Zoellick and Condoleezza Rice--did not expect the then-pro-American Vicente Fox to win (Zoellick had even gone so far as to tell Fox campaign representatives, "Sorry, but we only play with the big boys"), both the outgoing Clinton Administration and then-Governor Bush believed the next president of Mexico would be the PRI's candidate, Francisco Labastida. Bush even tacitly endorsed him three months before the July 2000 elections.

To his credit, Bush attempted to make up for his initial mistake, and after his own victory, he seemed to confer on Mexico the same "special relationship" status usually reserved for the United Kingdom (jilting Tony Blair in the process). Fox was Bush's amigo, and there was hope that both gentlemen ranchers and conservative former governors would forge a new businesslike partnership based on equality and trust. There was also much goodwill in the U.S. Congress. A majority of congressmen and senators interviewed by the Fox-PAN delegations before and after the victory seemed inclined to work on the illegal-immigration issue to Mexico's advantage. Alas, as mentioned earlier, this opportunity also went untapped. A discreet and businesslike relationship with Washington could have probably cemented a comprehensive amnesty deal for the illegal immigrants and other policies to Mexico's benefit. But instead, Fox's and Castaâ€"eda's regrettable (and seemingly pointless) geopolitical theatrics returned Mexico to its traditional role of indignant supplicant.

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