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Measuring the importance of oil-related revenues in total fiscal income for Mexico

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  • Reyes-Loya, Manuel Lorenzo
  • Blanco, Lorenzo

Abstract

Revenues from oil exports are an important part of government budgets in Mexico. A time-series analysis is conducted using monthly data from 1990 to 2005 examining three different specifications to determine how international oil price fluctuations and government income generated from oil exports influence fiscal policy in Mexico. The behavior of government spending and taxation is consistent with the spend-tax hypothesis. The results show that there is an inverse relationship between oil-related revenues and tax revenue from non-oil sources. Fiscal policy reform is urgently needed in order to improve tax collection as oil reserves in Mexico become more and more depleted.

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  • Reyes-Loya, Manuel Lorenzo & Blanco, Lorenzo, 2008. "Measuring the importance of oil-related revenues in total fiscal income for Mexico," Energy Economics, Elsevier, vol. 30(5), pages 2552-2568, September.
    • Handle: RePEc:eee:eneeco:v:30:y:2008:i:5:p:2552-2568
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    Cited by:

    1. Rok Spruk, 2021. "Regional convergence and trade liberalization under weak state capacity: evidence from Mexico," European Journal of Comparative Economics, Cattaneo University (LIUC), vol. 18(2), pages 173-216, December.
    2. Khatai Aliyev & Altay Ismayilov & Ilkin Gasimov, 2019. "Modelling Elasticity of Non-Oil Tax Revenues to Oil Price Changes: is There U-Shaped Association? Evidence from Azerbaijan," Acta Universitatis Agriculturae et Silviculturae Mendelianae Brunensis, Mendel University Press, vol. 67(3), pages 799-810.
    3. Brückner, Markus & Chong, Alberto & Gradstein, Mark, 2012. "Estimating the permanent income elasticity of government expenditures: Evidence on Wagner's law based on oil price shocks," Journal of Public Economics, Elsevier, vol. 96(11), pages 1025-1035.
    4. Rouhollah Shahnazi & Maryam Lashani Afrasiabi, 2018. "Effect of Exogenous Oil Revenue Shocks on Reallocation of Public and Private Investments in Iran," International Journal of Energy Economics and Policy, Econjournals, vol. 8(1), pages 27-37.
    5. Ilkin Sabiroglu & Samad Bashirli & Faiq Qasimli, 2011. "Creating a Favourable Deployment Mechanism of Oil and Gas Revenues with Regard to Volatile Oil Prices: The Case of Azerbaijan," Transition Studies Review, Springer;Central Eastern European University Network (CEEUN), vol. 18(1), pages 179-199, September.
    6. Fullerton, Thomas M., Jr. & Munoz Sapien, Gabriel & Barraza de Anda, Martha P. & Dominguez Ruvalcaba, Lisbeily, 2011. "Dinámica del Consumo de Gasolina en Ciudad Juárez, Chihuahua [Gasoline Consumption Dynamics in Ciudad Juárez, Chihuahua]," MPRA Paper 46853, University Library of Munich, Germany, revised 15 Jun 2012.
    7. Davood Danesh Jafari & Hamid Nazemian & Javid Bahrami & Mohammad Hassan Kheiravar, 2020. "Effect of Oil Revenues on Government Size in Selected Oil-exporters with an Emphasis on Iran s Economy," International Journal of Energy Economics and Policy, Econjournals, vol. 10(5), pages 485-497.
    8. García-Albán, Freddy & González-Astudillo, Manuel & Vera-Avellán, Cristhian, 2021. "Good policy or good luck? Analyzing the effects of fiscal policy and oil revenue shocks in Ecuador," Energy Economics, Elsevier, vol. 100(C).
    9. Farzanegan, Mohammad Reza, 2011. "Oil revenue shocks and government spending behavior in Iran," Energy Economics, Elsevier, vol. 33(6), pages 1055-1069.

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