MEXICO CITY—For much of the past decade, Mexico has maintained macroeconomic stability, even as the drive to centralize power has eroded democratic institutions. Inflation was broadly contained, fiscal deficits remained mostly contained, and financial markets appeared largely untroubled. This paradox helped sustain a comforting narrative that Mexico could bend its democratic rules without shattering its economic foundations. But that narrative is now beginning to unravel.

© Project Syndicate