Mexico

While I concur with the first sentence, my experience is that the second sentence is overstated. Let me provide an example.

In Mexico, electric bills are left at the house about once every two months. If it is particularly windy or if someone picks your electric bill up before you do, you may not be aware that the bill has been delivered. At least in our area of Mexico, the bill must be paid within 14 days of delivery.

So, on one occasion when we didn't receive our bill the CFE guy came by and took away our electric meter. (They don't just turn off your power; they take the meter away.)

The contractor who built our house happened to be chatting with the CFE guy a while later who mentioned this. Our contractor paid the guy N$100 to reconnect the meter. With the meter still connected, our contractor, who was heading back in to town that day, was able to pay the outstanding amount at CFE.

This saved a 45 minute drive to the CFE office, payment of something like N$500 to have the account reinstated, payment of a deposit, then a 45 minute drive back.

Was this a matter of "The honest ones are honest, and the crooked ones will shake you down every chance they get."? (We have never had any reason to pay the meter guy anything again.) Or was it a matter of a recognition that things don't have to be as complicated as it appears?

This is not to say that corruption is not a problem in Mexico. (Having said that, and having been stopped more times than I can remember in various police, military, hacienda and fitosanitario roadblocks and having renewed my FM-3 visa repeatedly, and having had a house built in Mexico... I have never been expected to pay a bribe.)

I think a major contributor to the system of "la mordida", aside from the historical basis, is the abysmally poor wages of public sector employees in Mexico. The starting wage of a police officer in Mexico City is US$300/month and they are required to provide their own uniform. And the cost of living in major urban areas in Mexico is not cheap. I bought chicken in the Comercial Mexicana grocery store a few weeks ago. I paid the same there as I paid at Safeway in Canada. I bought a floor fan at CM and paid more than I paid at Canadian Tire for the same fan.

Employees of migracion, hacienda, STC, etc. are equally poorly paid. Imagine the corruption we would find in the US and Canada if we paid
public employees that poorly.

There is a saying about public sector workers. "Pay them well... or somebody else will."

 

I don't know if it is tax evasion or the distribution of wealth in Mexico. Mexico has a small middle-income group with a tiny wealthy group and a huge low-income group. Many, many people subsist on minimum wages of only a few US dollars a day. Many of those people do so without employment in a labour market. There is no opportunity to collect taxes there and even if there were, the amount of taxes collected would likely be less than the cost of collecting them.

At the other extreme, people like Carlos Slim have unimaginable wealth. I don't know whether the tax system is structured such that the extremely wealthy pay little tax without tax evasion. They may simply be able to legally avoid taxation.

By way of example, the Bronfman family recently moved C$2,000,0000 out of Canada, avoiding C$700,000 in taxes in the process. I suspect there are equal or greater examples in the US.

In the middle income, large numbers of Canadians and Americans pay taxes to provide public services. In Mexico, there are so few middle income people that there are few people to pay the taxes.

Mexico is a country with a lot of wealth. That wealth has historically, and remains currently, concentrated in the hands of the very few.