On July 2, Mexico held a presidential election that triggered what has become a bitter political firefight. After conservative candidate Felipe Calderon was declared the winner by less than 1% of the vote, his populist rival, Andres Manuel Lopez Obrador, quickly claimed fraud. For the past two months, thousands of Lopez Obrador’s most fervent supporters have transformed the Zocalo, Mexico City’s central square, into a virtual sea of tents – the center of gravity of opposition to the official result.

On September 1, dozens of opposition lawmakers created a primetime spectacle inside Mexico’s parliament by occupying the speaker’s podium, thereby denying outgoing President Vicente Fox the chance to deliver his final state of the nation address in person. Four days later, Mexico highest electoral court ruled that Fox had improperly interfered in the election but unanimously reaffirmed Calderon’s victory. Lopez Obrador has vowed to obstruct Calderon’s presidency from the moment he takes office on December 1.

You learn a lot about a country’s underlying stability by how it responds to a crisis. Similar electoral conflicts unfolded in the United States in 2000 and in Ukraine in 2004. In the wake of fiercely contested presidential elections, large numbers of voters in each country questioned the legitimacy of the outcome. The nation’s highest courts were compelled to rule on demands for a ballot recount.

But US political and economic stability was never in doubt in 2000, because public confidence in the country’s governing institutions allowed them to resolve the conflict peacefully. These institutions proved far more powerful than the political personalities involved.

In Ukraine, on the other hand, public outrage, buttressed by international pressure, brought the government to a halt. In a second vote, the election’s loser was crowned the winner. But the initial euphoria that accompanied the so-called “Orange Revolution” quickly faded, and Ukraine is still dealing with the political and economic fallout.

What, then, should we make of Mexico and its disputed election? Here, too, a large segment of the electorate told pollsters that they doubted the legitimacy of the official result. The judiciary rejected calls for a full recount, though they did examine roughly 9% of the ballots before ruling that the review indicated no challenge to the election’s outcome. Like Ukraine’s Viktor Yushchenko, who lost the initial vote in Ukraine, Lopez Obrador demanded that the result be overturned. Unlike Yushchenko, he was denied.

But the good news for Mexicans is that their country’s political institutions have proven far more stable than did Ukraine’s. Despite Lopez Obrador’s best efforts to create chaos in the streets with public demonstrations involving hundreds of thousands of protesters, domestic and international confidence remains strong. The peso has barely budged since the election—a clear indication that investors have not lost faith in the country. Their resilience is important, because market fears of instability often become a self-fulfilling prophecy.

The point is not that public confidence (or lack thereof) in an election outcome doesn’t matter. It does. But the broader picture – whether, as in Mexico, a country is able to continue to go about its business as its political institutions sort out the mess – matters far more. Unlike in Ukraine, investors have shrugged off the noisy demonstrations in Mexico City’s streets and remained focused on interest rates and fluctuations in the global economy. This suggests that governing principles and sturdy political institutions, not powerful individuals, have become the bedrock of Mexican governance.

Indeed, while Lopez Obrador continues to denounce the outcome and has threatened to make Mexico ungovernable, Mexico’s growing middle class has taken the political conflict in stride. Many who supported Lopez Obrador’s candidacy do not support the post-election protests in his name. A recent poll in the newspaper Reforma found that Calderon would now defeat him by 19 percentage points. Voters may prefer Lopez Obrador, but they value Mexico’s stability above all.

Moreover, during the political standoff, Calderon has worked behind the scenes to form an administration and to settle on a governing strategy. Aware that he must establish a greater sense of political legitimacy, his cabinet is likely to include representatives of other political parties. He will probably introduce measures to tackle poverty and create jobs.

Calderon’s task will not be easy. Lopez Obrador and his supporters can be expected to work relentlessly to thwart his plans. But they are unlikely to derail his government.

The underlying stability highlighted by Mexico’s post-election crisis is also evident elsewhere in Latin America. Whatever the potential for a leftward shift this year in some Latin American countries, others, including Mexico, Chile, and Brazil, are clearly less vulnerable to the type of populist rule we’ve seen in Venezuela and Bolivia. Elected leaders in these countries face institutional constraints – parliaments that check the powers of the executive and courts that check the powers of both – on their ability to shape policy.

To be sure, political and market volatility in a broad range of emerging-market economies will continue. But some of them appear to have “graduated” toward a stability rooted in sustainable governance. Beyond Latin America, several Eastern European countries offer ready examples. In these states, regulatory and taxation issues now affect confidence more deeply and consistently than does political tension.

Many in the media may not comprehend that yet. But markets do. Though Mexico’s election saga may continue to make headlines, its true significance is that it reveals just how politically sturdy a place Mexico has become.