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Is Local Beautiful? Fiscal Decentralization in Mexico

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  • Hernández-Trillo, Fausto
  • Jarillo-Rabling, Brenda

Abstract

Summary In this study, we present evidence from Mexico regarding the weak effectiveness of federal transfers and low absorption capacity of sub-national governments in poor areas, when political opportunistic behavior is present. We show that the distribution of conditional transfers is discretionary, due to a monitoring problem, and deficiency in institutional frameworks. This may be the cause for opportunistic behavior by political elites. The results suggest that more funds are distributed to areas with more voters. In addition, localities with a higher number of swing voters also receive more resources. These results show that the poorest populations receive the least amount of money from the community-based development funds.

Suggested Citation

  • Hernández-Trillo, Fausto & Jarillo-Rabling, Brenda, 2008. "Is Local Beautiful? Fiscal Decentralization in Mexico," World Development, Elsevier, vol. 36(9), pages 1547-1558, September.
  • Handle: RePEc:eee:wdevel:v:36:y:2008:i:9:p:1547-1558
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    References listed on IDEAS

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    Cited by:

    1. Wu, Alfred M. & Wang, Wen, 2013. "Determinants of Expenditure Decentralization: Evidence from China," World Development, Elsevier, vol. 46(C), pages 176-184.
    2. Hernandez-Trillo, Fausto, 2016. "Poverty Alleviation in Federal Systems: The Case of México," World Development, Elsevier, vol. 87(C), pages 204-214.
    3. Smith, Heidi Jane M. & Revell, Keith D., 2016. "Micro-Incentives and Municipal Behavior: Political Decentralization and Fiscal Federalism in Argentina and Mexico," World Development, Elsevier, vol. 77(C), pages 231-248.
    4. Finkbeiner, Elena M. & Basurto, Xavier, 2015. "Re-defining co-management to facilitate small-scale fisheries reform: An illustration from northwest Mexico," Marine Policy, Elsevier, vol. 51(C), pages 433-441.

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