The campesino groups got most of what they asked for, but according to the subsequent media spin, the PRI's 19 state governors emerged as the real winners in the budget process -- the first since the PRI and its ally, the Green Party, won control of the lower house in the July 5 mid-term elections.

The governors received funding for highways and public works projects such as plazas and charro rings -- the outdoor arenas that host Mexican-style rodeo events. Conveniently, they also extracted more money for states staging gubernatorial races in 2010 -- as well as for the populous state of Mexico, whose governor, the PRI's Enrique Peña Nieto, is the early favorite for the party's 2012 presidential nomination. The governors even secured concessions that loosen some of the accountability for funds flowing to the state and local levels, where discretional spending can be the norm and transparency is often lacking.

"What they did this time was take money out of entitlements such as Oportunidades [a conditional cash-transfer program for Mexico's poorest families] and turned it into pork-barrel spending," said Jeffrey Weldon, director of the political science department at the Autonomous Technological Institute of Mexico (ITAM) in Mexico City. "It's inefficient, and a lot of money that [the governors] spend is for the promotion of the governorship."

That the powerful state governors walked away with increased federal funding reflects a long-term trend -- albeit one that has accelerated in recent years -- toward decentralization in Mexican politics. That has allowed governors, who enjoyed little autonomy during the years of one-party rule, to exert increasing influence over matters such as security, swelling budgets and the operation of political machines.

And now the PRI, which governs 19 of the Republic's 31 states, is aiming to devolve even more power from the executive branch of the federal government to the local level.

The party has repeatedly called for the federal government to dissolve the Social Development Secretariat and devolve the funding for programs such as Oportunidades to the state level. PRI lawmakers also scuttled plans earlier this year for the creation of a strengthened federal police force that would have relieved the army in the war on drug cartels, arguing that the plan infringed on states' sovereignty.

The growing strength of the PRI's state governors was already visible during the midterm elections in July, when their political machines and skill for marshaling votes produced near-clean sweeps in populous states such as Veracruz, Puebla and the state of Mexico. Now the party's attempts at further devolving power to them haven't gone unnoticed.

Senate President Carlos Navarrete of the Democratic Revolution Party (PRD) accused the PRI of using the lower house's budget process to "deliver . . . impunity to its governors," while a bloc of senators belonging to the National Action Party (PAN) -- all intraparty rivals of President Felipe Calderón -- branded the budget "undemocratic."

PAN's party president, César Nava, who upon taking over party leadership back in September had declared war on the "feudal lords of the PRI," told reporters that revisions to the final text reintroduced many of the oversight provisions.

But according to Weldon, "PAN is happy with this deal, because they ended up getting something for their governors, too."

He added, though, that the new formula presents more of a problem for PAN than for PRI. "PAN governors don't have a good record of spending money in a way that helps get them reelected," he explained.

Ironically, it was PAN that heavily promoted the devolution of powers to the state level after the 1997 mid-term elections produced Mexico's first divided Congress. But the concept gained traction under the PRI, which lacked a strong central leadership after losing the presidency in 2000 and was hobbled by stiff fines for campaign finance irregularities that same year.

"In the PRI, the glue was the presidency, through which disputes were settled and moneys were allocated," said Federico Estévez, political science professor at ITAM. "But once that's gone, you get very open, opportunistic behavior by governors looking to consolidate themselves in their locality."

The result, he argued, has benefited the party during its time out of power, but could haunt the PRI should it regain the presidency in 2012. "The problem is, will the next president be able to keep his own governors in tow?" he said. "[Former President Ernesto] Zedillo didn't have much luck."

Some analysts, such as Estévez, maintain that the devolution of power provides the country with a better bulwark against expensive institutional errors committed in the past.

Others take the view of Zedillo's former chief of staff, Liébano Sáenz, who, writing recently in the Mexican daily, Milenio, said, "Centralization hasn't produced very good results."

But some see peril in decentralization.

"In the next few years, we're going to see the strengthening of the rule by strongmen in the states and the deterioration of competitive democracy on the state level," said Aldo Muñoz, political science professor at the Autonomous University of the State of México in Toluca.

According to Muñoz, this year's midterm races and subsequent budget process refined a winning formula for governors looking to build powerbases and launch presidential bids: the use of public funds to promote loyal congressional candidates, who subsequently return the favor through legislative -- and budgetary -- support.

Muñoz called for legal and political mechanisms to regulate the states' use of public funds. But imposing those mechanisms could prove difficult as the PRI gears up for 10 state elections in 2010, and several powerful governors -- including Peña Nieto and Gov. Fidel Herrera of Veracruz -- prepare bids for the party's 2012 presidential nomination.

**David Agren is a freelance journalist in Mexico City. He previously covered government and politics for The News, Mexico City's English-language daily.