Fiscal Transfers a Curse or Blessing? Evidence of Their Effect on Tax Effort for Municipalities in Sinaloa, Mexico
AbstractThis article studies the impact of vertical fiscal transfers on local tax effort in Mexico, considering evidence for municipalities in Sinaloa between 1993 and 2008. Based on cadastral information, gross added value and property taxes we create a “pure” indicator of fiscal effort which is used to analyze the effect of conditional and unconditional transfers on this indicator. We employ econometric techniques such as panel data and the Arellano Bond method to correct endogeneity. The results show that conditional transfers, which began in 1998, have generated laziness towards property tax collection, negatively affecting the fiscal effort, even after controlling for demographic factors, population and the index of exclusion.
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Bibliographic InfoPaper provided by International Center for Public Policy, Andrew Young School of Policy Studies, Georgia State University in its series International Center for Public Policy Working Paper Series, at AYSPS, GSU with number paper1030.
Length: 30 pages
Date of creation: 01 Oct 2010
Date of revision:
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Web page: http://aysps.gsu.edu/isp/index.html
transfers; fiscal equality; tax effort; property taxes; Mexico; Sinaloa.;
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- Wallace E. Oates, 1999. "An Essay on Fiscal Federalism," Journal of Economic Literature, American Economic Association, vol. 37(3), pages 1120-1149, September.
- Arellano, Manuel & Bond, Stephen, 1991.
"Some Tests of Specification for Panel Data: Monte Carlo Evidence and an Application to Employment Equations,"
Review of Economic Studies,
Wiley Blackwell, vol. 58(2), pages 277-97, April.
- Tom Doan, . "RATS program to replicate Arellano-Bond 1991 dynamic panel," Statistical Software Components RTZ00169, Boston College Department of Economics.
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