Old Ruling Party's New Face Leads in Mexico

By NICHOLAS CASEY and DAVID LUHNOW

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PRI candidate Enrique Peña Nieto, with a large lead in polls, greeted supporters during his final campaign rally Wednesday in the city of Monterrey.

ATLACOMULCO, Mexico—It took Mexico's Institutional Revolutionary Party, once described as the "perfect dictatorship," 71 years to lose power. This Sunday it looks set to regain control of the national government after just 12 years.

Enrique Peña Nieto, a native son of this hillside town that has remained a stronghold of the party, known as the PRI, is the runaway favorite in Sunday's presidential election, a contest Mexicans hope will kick-start a stalled economy and ease the country's violent drug war.

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An average of six polls shows Mr. Peña Nieto, a former state governor and the new face of the party, with 45% support versus 29% for Andrés Manuel López Obrador, who narrowly lost the 2006 election. Josefina Vázquez Mota of the governing National Action Party, or PAN, trails with 24%.

After consecutive six-year terms of PAN presidents—first Vicente Fox, then Felipe Calderón—many Mexicans are eager for change once again.

Mr. Peña Nieto, 45 years old, has won over many voters with his good looks and a simple pitch: The PRI is more capable than the PAN and safer than the Party of the Democratic Revolution, the leftist party led by Mr. López Obrador. "Responsible change" is a PRI campaign slogan, a reference to criticisms of Mr. López Obrador as a populist.

The PRI candidate promises to boost growth through a series of overhauls, including opening the state monopoly on oil to private investment, a turnaround for a party that nationalized the oil industry in 1938.

The PRI's comeback is remarkable for a party that descended into factional fighting and nearly fell apart after its initial defeat in 2000. The PRI managed to keep control of at least half of Mexico's state governorships, giving it space to regroup. And in the run-up to choosing a candidate this time around, there has been no infighting.

Famous during its reign for subtle and not-so-subtle rigging of elections, the PRI also has learned how to win without stuffing ballot boxes. "They picked a good candidate, they have a good platform, and they are running a good campaign," said Damian Fraser, head of Latin America equities for investment bank UBS.

The PRI also has benefited from rivals' failures. A majority of voters still mistrust the PRI for its long hold on power and its history of corruption scandals, but many are disappointed by Mexico's two other main parties.

The leftist PRD's problem, analysts say, is its candidate. A successful mayor of Mexico City, Mr. López Obrador refused to accept his narrow defeat in 2006 and declared himself the "legitimate" president. He and his supporters shut down Mexico City's main avenue for months of protests that alienated many in the middle class.

This time around Mr. López Obrador threatened to break up the party unless he got its nomination over Mexico City's current mayor, Marcelo Ebrard. Many Mexicans say Mr. Ebrard, widely seen as more moderate, would have had a better shot at winning the presidency.

"The best man is not on the ballot," said Enrique Krauze, a renowned Mexican historian.

The election is also a verdict on the PAN, a buttoned-down party of the middle class that fought a long and often lonely struggle for democracy in the 20th century. Once in power, the party's leaders lacked the skills or vision to push major initiatives through the country's fractious Congress, analysts say.

To be sure, many of the PAN's initiatives were blocked by the PRI, including the same energy reform the PRI now espouses.

The PRI was born in 1929 as a system to end the chaotic power grabs of Mexico's bloody 1910-17 revolution: An all-powerful president would govern for only six years, then hand-pick his successor.

For decades the party was a finely run patronage machine that tried to be all things to all people. For workers and peasants, it acted like a "revolutionary" socialist party, writing favorable labor laws and backing official unions. For the business class, it divided up the spoils in a closed economy.

From 1930 to 1970, Mexico's economy averaged about 6% annual growth. That run was marred by incidents of repression, such as a 1968 massacre of student protesters. The next three decades were marked by frequent economic crises and corruption. The PRI lost its first state governorship in 1989, congress in 1997, and the presidency in 2000.

The party retreated but held on to places such as the state of Mexico, plotting a return to national power. Atlacomulco, Mr. Peña Nieto's hometown, continued to produce PRI governors and other top politicians who doted on the town of 20,000 people. Plaques commemorate alleyways refurbished by Mr. Peña Nieto while he was governor; a mural of him and other past governors adorns City Hall.

"We learned to renew our ranks in a democracy," said Ivonne Ortega, the PRI governor of Yucatán, describing the past 12 years as a time of reflection and focus on local politics. Like Mr. Peña Nieto, she says she comes from a new generation, the so-called nuevo PRI, that shouldn't be held responsible for the past.

Not all PRI scandals are ancient history. Last year the party's president, Humberto Moreira, was forced to step down over a scandal about massive public debts in Coahuila state during his stint as governor. Mr. Moreira denies any wrongdoing.

César Camacho, a former governor of the state of Mexico who has known Mr. Peña Nieto for two decades, says he believes the candidate is independent-minded, not beholden to the PRI's "dinosaurs"—what Mexicans call unpopular PRI elders

Mr. Krauze has a wait-and-see approach. "He is a young man with old manners," the historian said. "Certainly the skills of this young generation [of the PRI] will be tested now."

Write to Nicholas Casey at nicholas.casey@wsj.com and David Luhnow at david.luhnow@wsj.com

Making History

The Institutional Revolutionary Party's long rule

1929 Institutional Revolutionary Party, or PRI, founded under the name National Revolutionary Party in the wake of the instability of the Mexican Revolution.

1934 President Lázaro Cárdenas launches a program of land reform and oil nationalizations and industrialization.

1968 Ahead of the Mexico City Olympics, the PRI cracks down on student protesters in what is later known as the Tlatelolco Massacre.

1976 President Luis Echeverría devalues the peso, the first time in decades the currency is weakened, ushering in period of high inflation and low growth.

1982 President José López Portillo nationalizes Mexico's banks. Months later, Mexico defaults on its debts.

1990 Peruvian writer Mario Vargas Llosa calls PRI government 'perfect dictatorship.' a term that becomes widely used throughout Mexico and the world.

1993 Parliament ratifies North American Free Trade agreement, championed by President Carlos Salinas.

1994 PRI loses congressional majority after an economic crash that devalues the peso.

2000 PRI loses presidency for first time in seven decades with election of the National Action Party's Vicente Fox.

A version of this article appeared June 29, 2012, on page A9 in the U.S. edition of The Wall Street Journal, with the headline: Old Ruling Party's New Face Leads in Mexico.