[Design] Which came first, Setting or Mechanics?

So, I just realized how long my last post was. Sorry about that; I'll try to keep my thoughts shorter from here on in. Shouldn't be hard.

Preliminary work on the RPG Design Contest continues. Today, I've been thinking about how to approach the actual design of an RPG, and I now realize that I have no idea whether it is better to start with fleshing out the mechanics of a game, and building the setting up from there, or whether it's better to have a fairly well-detailed world and then start putting together mechanics.

It's sort of a "Chicken or Egg?" dilemna, in that you can't really design mechanics if you have little understanding of your setting, and you probably shouldn't design a setting if you don't know the limitations of your mechanical system.

This morning, I had a setting roughly in mind, but I didn't have any of the details fleshed out. But that was still better than the mechanical side of things; there, I only had a few very loose ideas, and no clue which system to follow. But, I didn't want to work on my setting if I didn't know exactly what my system would represent.

So, on that half hour lunchbreak of mine, I grabbed the trusty pen and paper and made up a "Phantom System" that would serve as my rough draft while designing the setting. In other words, this was a system that wouldn't actually WORK in play, but sort of gave me an idea of what my as-yet-unknown system would be capable of covering. My phantom system notes were as follows (I've expanded upon my own scratchings so that they make sense for people who are, well, not me):

1) Dangerous. A gun shot or two will kill a PC or an NPC rather easily. To survive, characters have to use cover, and the rules encourage moving and taking multiple actions per turn. If there's space, there will be a basic system to cover some of the grim and gritty stuff, like gangrene and water poisoning.

2) Resources. The game will have rules that support scrounging and bartering for gear.

3) PCs are special, but not too special. The edge belongs to the player characters, but bad luck can kill a PC very quickly. Luckily, PC Generation is rather quick, with only a few limited random elements.

4) Psychic Rules are similar to skills, which are similar to every other ability of a character. In other words, there is one universal mechanic in the game, and it truly is universal. (not like, say, d20, where hit points follow a different system than skill checks, which are different from moving)

5) The dreamland has a part to play in the game mechanics.

***

So, that's my phantom system. There were a lot of numbers written down, things like "Combat 60%" and "6 second rounds" that don't really mean much now. But you get the gist.

I'm not sure if my method is the best when creating a game, but at least it gives me an idea of what the mechanical side will look like while I start sketching out the setting side.