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Elasticity Of Municipal Public Expenses Of The Capitals Of Federative Entities In Mexico Elasticidad De Los Egresos Publicos Municipales De Las Capitales De Las Entidades Federativas En Mexico

Author

Listed:
  • Rodolfo Valenzuela Reynaga
  • Adriana Veronica Hinojosa Cruz

Abstract

The Mexican fiscal system is characterized by a strong dependence on sub-national public finances in relation to the resources that the federal government sends to the states and municipalities. These resources are transmitted through transfers. The composition of municipal public expenditure might be associated with the type of source of income to which local governments have access to. The purpose of this investigation is to determine the behavior of municipal public expenses in the capitals of the Mexican states. We identify the effects of adjustments in the different types of public revenues of municipal expenditure. A data panel consisting of thirty-one cross-sectional (municipalities) with data from 2010 - 2014 was designed. Estimations are made through linear regression models considering fixed effects. The results suggest the total municipal outflows present a greater elasticity with the federal participations than with the rest of the municipal public revenues. Current expenditure is more sensitive to changes in tax revenues than in federal contributions. Public investment responds more to adjustments in federal and state contributions than to changes in local tax revenues and federal contributions

Suggested Citation

  • Rodolfo Valenzuela Reynaga & Adriana Veronica Hinojosa Cruz, 2017. "Elasticity Of Municipal Public Expenses Of The Capitals Of Federative Entities In Mexico Elasticidad De Los Egresos Publicos Municipales De Las Capitales De Las Entidades Federativas En Mexico," Revista Internacional Administracion & Finanzas, The Institute for Business and Finance Research, vol. 10(5), pages 81-94.
    • Handle: RePEc:ibf:riafin:v:10:y:2017:i:5:p:81-94
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    More about this item

    Keywords

    Local Public Spending; Operating Expense; Public Investment;
    All these keywords.

    JEL classification:

    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy; Modern Monetary Theory
    • H71 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Taxation, Subsidies, and Revenue
    • H72 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Budget and Expenditures
    • H76 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Other Expenditure Categories
    • H77 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Intergovernmental Relations; Federalism

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