Impressions From Mexico

I'm back after a vacation in the Puerto Vallarta area of Mexico in the Mexican states of Jalisco and Nayarit. Seeing new places always brings new insights, so here are some of my impressions:

Urban Planning

One of the most striking aspects of the cities I visited is that there is no visible sign of any zoning or land use regulation. Industrial facilities, hospitals, shops, warehouses, farms, zoos, car repair or car part stores, auto dealerships, restaurants, real estate offices, schools, markets, notary offices, police stations, hotels, adult clubs and so on are cheek by jowl. Shops and restaurants in primarily residential neighborhoods, sometimes operated out of a garage or residence, seem to be common.

There is also none of the enforced tidiness seen in towns that strictly enforce local ordinances on subjects like weed control or public rubbish piles, or the equivalent enforced by home owner's associations. There is a high tolerance for visual messiness.

There is also a strong indication that people do not trust government law enforcement to provide sufficient private safety. There are lots of private security guards. Most shops are closed with metal curtains when they are not open.  Most homes seem to be built in walled complexes with razor wire or spikes atop the walls with only slight attention paid to the exterior appearance and a focus on creating beautiful private interior spaces.

The Real Estate Market

The recent formal legalization of foreign direct real property ownership has spurred lots of for sale signs and real estate offices, but seemingly not very inflated real estate prices and not a lot of real estate sales activity. There is also surprisingly little development and construction activity for an urbanized area of this size, with many undeveloped vacant lots available in prime locations listed for sale, and lots of spaces available for rent at pretty modest rents.

Water and Plumbing

Storm sewers routinely empty, unfiltered onto the beach and into the sea.

Outside the resorts, tap water quality is dubious and almost everyone drinks bottled water in the places that I observed. No restaurants provide free water with a meal. Free public toilets are also pretty much entirely absent. 

Water and sewage service would almost always be a local government function in  the U.S., and is pervasively done poorly in all but a few isolated pockets of Mexico.

Traffic and Transportation

There are no crossing light controlled cross-walks there, and traffic laws (while not ignored) are often taken to be guidelines. Ambulances, fire trucks, and municipal police officers get no respect in traffic. People are routinely carried in the back of pickup trucks, both privately and for fares.

There is a high volume of bus service that isn't pretty but very competitive and inexpensive. It is arguably the most vigorously hustling industry in the area. Local bus services appear to be operated by municipal license rather than by a governmental entity. Per Wikipedia:

Puerto Vallarta is serviced by three municipal bus unions that provide coverage for most of the greater Puerto Vallarta area (e.g. Ixtapa, Mismaloya, Pitillal). Most of the population of the Municipality of Puerto Vallarta travels by municipal bus. Automobile ownership is not rare, but cars are seldom used to commute to and from work. They are typically reserved for family outings and major shopping trips. Parking in Puerto Vallarta is scarce, and this makes automobile commuting impractical. 

Throughout the central area of the city and along the coastal strip, roads are generally paved, often with cobblestones. In the residential areas outside of the central commercial area dirt roads are the norm, and many of them are in poor condition and not suitable for normal cars except at very low speeds. 

The city is also served by a large fleet of taxis. Rates are controlled by a taxi driver's union, and set in negotiations between the union and the city. Rates are based on established zones rather than using taxi meters.

It could be that Puerto Vallarta is at a localized advantage here, because the urbanized area doesn't go very far inland, allowing most areas to be served with a pretty much a handful of one dimensional routes serving strips of the coast at a couple of levels inland.

Services v. Things

Many aspects of the local economy appear to arise from a much lower cost of services relative to goods than in the United States.

Indeed, overall prices for most retail good and services run about half the price of comparable goods and services in the U.S. although it is hard to know how much of that is due to temporarily favorable exchange rates (the dollar buys about 50% more Mexican pesos than it did just 2 years ago) and how much is due to a lower cost of living. I suspect that both factors are at work.

* Veterinarians make house calls.

* Resorts are heavily staffed compared to comparable U.S. establishments with maids, people delivering drinks, landscapers, and so on.

* Bus service is cheap and thriving, which may be a product of bus driver's being paid less, because bus drivers and not buses are the main cost of a bus system. (Buses running full are also incredibly fuel efficient vis-a-vis even extremely fuel efficient single occupancy or single family occupancy vehicles.)

* Taxi service is cheap. We got a cab from just outside the formal pickup area of the airport to a resort downtown for the equivalent of $5 U.S. Another 40 minute taxi trip from a house where I was staying in Nayarit state, directly to the airport, was $15; a comparable trip in Denver would cost $67-$75.

* It is apparently economically profitable to have someone man even very marginal shops with very little business.

* Many people are employed walking up and down beaches and in other public areas hawking trinkets or gifts of all kinds.

* Many low level retail salespersons have the authority to haggle over prices. This is rare in the U.S., in part, because low paid retail sales employees on hourly wages can't be trusted with this responsibility. You see little haggling in retail sales in the U.S. below the price threshold of an automobile, outside DIY sales of used goods where there are no agency issues.

* Per Wikipedia: "Residents of the United States, particularly those living near the Mexican border, now routinely cross the border into Mexico for medical care. Popular specialties include dentistry and plastic surgery. Mexican dentists often charge 20 to 25 percent of U.S. prices,while other procedures typically cost a third what they would cost in the US."

Innovations

* An interesting practice I observed in fast food was to serve food on a non-disposable plate covered with a plastic bag. When you are done, you discard the bag, but return the clean non-disposable plate.

Healthcare

Per Wikipedia:

Healthcare in Mexico is provided via public institutions, private entities, or private physicians. Healthcare delivered through private organizations operates entirely on the free-market system, i.e., it is available to those who can afford it. This is also the case of healthcare obtained from private physicians at their private office or clinic. Public healthcare delivery, on the other hand, is accomplished via an elaborate provisioning and delivery system put in place by the Mexican Federal Government. In 2012, Mexico instituted universal healthcare. . . . 

While private hospitals account for 2/3 of all hospitals in Mexico with 2,988 institutions, less than 10% of the Mexican population has private insurance coverage, paying for care mainly "out of pocket" . . .

Public Healthcare delivery is accomplished via an elaborate provisioning and delivery system instituted by the Mexican Federal Government. It is provided to all Mexican citizens as guaranteed via Article 4 of the Constitution. Public care is either fully or partially subsidized by the federal government, depending upon the person's (Spanish: derechohabiente) employment status. All Mexican citizens are eligible for subsidized healthcare regardless of their work status via a system of health care facilities operating under the federal Secretariat of Health (formerly the Secretariat de Salubridad y Asistencia, or SSA) agency. 

The Secretariat of Health's Seguro Popular offers coverage to Mexicans who do not have formal employment. The program currently covers over 55 million people. 

Employed citizens and their dependents, however, are further eligible to use the program administered and operated by the Instituto Mexicano del Seguro Social (IMSS) (English: Mexican Social Security Institute). The IMSS program is a tripartite system funded equally by the employee, the private employer, and the federal government. There are 58 million people covered through IMSS. 

The IMSS does not provide service to public employees, who instead are serviced by the Instituto de Seguridad y Servicios Sociales de los Trabajadores del Estado (ISSSTE) (English: Institute for Social Security and Services for State Workers), which attends to the health and social care needs of government employees. This includes local, state, and federal government employees. There are nearly 13 million people covered through ISSSTE. 

The government of the states in Mexico also provide health services independently of those services provided by the federal government programs. In most states, the state government has established free or subsidized healthcare to all their citizens. 

The Secretariat of Health (Secretaria de Salud) is the largest public healthcare institution, operating 809 hospitals throughout the country. 

The Mexican Social Security Institute (Instituto Mexicano del Seguro Social - IMSS) grants hospital care and services to employed citizens and their dependents - there are 279 hospitals affiliated to IMSS. 

The Institute for Social Security and Services for State Workers (Instituto de Serguridad y Servicios Sociales de los Trabajadores del Estado - ISSSTE) grants hospital care and services to government employees - there are 115 hospitales affiliated to ISSSTE. 

The remaining 279 hospitals are affiliated with 9 government dependencies, including State Facilities, Secretariat of National Defense (Secretaria de Defensa Nacional), Mexican Navy (Secretaria de Marina), Petroleos Mexicanos (PEMEX), and the Red Cross (Cruz Roja). . . . the public hospital infrastructure relies on a vast network of small hospitals. Over 50% of public hospitals have less than 50 beds. . . . 

On December 1, 2006, the Mexican government created the Health Insurance for a New Generation (also called "Life Insurance for Babies"). This was followed by a February 16, 2009, announcement by President Felipe Calderon where he stated that at the current rate of progress Mexico would receive Universal Health Coverage by 2011, and a May 28, 2009, announcement in which his administration made public Universal Care Coverage for Pregnant Women. In August 2012 Mexico installed a universal healthcare system.

Vagrancy

Many people in Mexico are obviously poor. But, beggars and vagrants are virtually absent on the streets, and there are very few visibly homeless people. 

I have no real intuition regarding why this is the case. It could be that there are laws against it that are enforced, it could be that the social safety net, a healthy employment market and a low cost of living makes this rare, it could be that there are slums to which the poor are confined that tourists don't see. I couldn't tell you, and would welcome comments from anyone who has more insight into this reality.

(Incidentally, the lack of visible vagrancy is also something I've observed to other places in Mexico that I've visited that are not primarily tourist destinations.)

Criminal Justice

My understanding is that municipal police handle only traffic offenses and minor matters, while federal police handle serious matters. The municipal police appear to get little respect from the public. 

As noted regarding urban planning, build people spaces in a way that reflects little or no public trust that they will be secure without strong self-help measures designed to actually stop burglars and vandals rather than to merely indicate that an area is not open to the public symbolically.

Federal police on patrol appear to travel in packs of a couple of SUVs with about six heavily armed policemen (or policewomen who were definitely visible) in paramilitary garb. A recruiting sign in the airport for the federal police indicated that they were a paramilitary gendarme force that was part of the extended organization of the military. The closest U.S. analogy to this status might be to the U.S. Coast Guard.

The concept of "community policing" seems to be absent for the federal police. They act like occupying army military police in their demeanor and attitude.

There is apparently no posse comitatus law in Mexico as uniformed soldiers are visible guarding a variety a non-military facilities in the area (e.g. port facilities and the airport).

Intellectual Property

Lots of branded items (e.g. sports teams and popular TV series) are publicly sold in circumstances when it is clear that the vendors do not have licenses from the trademark/copyright owner to sell the goods. It is a pretty marginal part of the overall economy, but important to the livelihood of many select vendors.

Overall

Overall, Mexico comes across as a country with a weak state and in particular weak local government institutions, relative to the U.S., and as a very thinly regulated economy in general. It is something of a free market economist's dream that comes with pluses and minuses, but has not caused Mexico to have a level of development comparable to the U.S. or Canada.