Emergence and sustainability of the innovation process of Mexico’s local governments

After analyzing 271 government programs self-qualified as innovative and submitting a questionnaire to the 79 persons responsible for some of the best practices in the municipal government in the years 2001, 2002 and 2003 (in accordance with the Government and Local Management Award), I identify and analyze the variables that have a bearing on the emergence and sustainability of the innovation process in Mexico’s local governments. The results show paradoxes in the process of innovation of organizations needing to accomplish increasingly complex objectives through a lack of mechanisms to accrue intermediate and long term technical expertise, as well as organizational learning. This document also describes the differences in the process of innovation according to three contextual variables: organization capability, institutional development and political and electoral competition. 1 This document was written with the financial support of Harvard’s Mexico Foundation and the Ford Foundation. The preparation of the database and the submission of the questionnaire was made possible by the support of the Premio Gobierno y Gestión Local, organized by the Centro de Investigación y Docencia Económica (CIDE). I express my deepest gratitude to Enrique Cabrero, General Director of the CIDE, and Winthrop Carty, Associate Director of the Ash Institute, for their wholehearted support to the undertaking of this research. Without their support, the research would have been impossible. I also thank David Arellano and Edgar Ramírez for their valuable comments, and Patricia Peña for creating the software for the database. 3 Innovation is understood as the first time application of a program, practice, process or proceeding in an organization, regardless of whether it has been implemented before in some other organization. Innovation and managerial reform The study of governmental innovation has had an explosive growth in the last two decades. Mainstream literature assumes that innovation allows the transition from an archetype of bureaucratic organization based in procedures to one of flexible and efficient organizations, ready to adapt to the needs of the citizen-clients. The dramatic momentum that governmental reform has acquired in the past few years, inspired on the New Public Management (NPM) paradigm, has enforced the conviction that it is possible to reinvent government. However, no matter how important these processes of innovation might be, the environment in which they occur and the organizational and institutional characteristics that frame them generate paradoxes that have to be analyzed in order to explain the unintended consequences that arise when uniform managerial tools are applied to reform different types of organizations. The objectives of this research are to address how and with what characteristics innovations arise, determine if these innovations are sustainable and why, and analyze their impact on the construction of better government capability, community development and local governance. The range of needs of Mexican municipalities, and the administrative and technical tools available to address them, are enormously broad. There are urban, rural and metropolitan municipalities; some densely populated and others practically uninhabited; ranging from some of the poorest in the world to those with a standard of living similar to that of developed countries; some are linked through a modern infrastructure to other parts of the country, while others are practically restricted to flows of trade and communication to nearby communities; in some cases they are efficiently linked to regional and international markets, alternatively, there is just a financial activity of mere subsistence in the others; some are on the way to becoming consolidated as global cities, others are practically disconnected from the processes of regional financial integration. It is this diversity that also causes the innovations from the local government to be diverse. It is for this