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Transfers And Horizontal Fiscal Imbalances In The Main Large Municipalities Of Mexico Transferencias Y Desequilibrios Fiscales Horizontales En Los Principales Municipios Grandes De Mexico

Author

Listed:
  • Luis Lenin Herrera Diaz de Leon
  • Roberto Gonzalez Acolt
  • Cristian Omar Alcantar Lopez

Abstract

In 2007, the Mexican government carried out reforms for distributing and transferring resources to subnational governments in pursuit of a series of objectives. The most important objective was to reduce fiscal imbalances. The purpose of this article is to identify correlation between federal transfers and horizontal imbalances in municipal public finances. A longitudinal analysis was carried out with a panel data econometric tool for the 75 largest municipalities in Mexico during the years 2000 to 2016. Results show a positive relationship between horizontal imbalances with transfers. For every 1,000 pesos of transfer per inhabitant, the amount of horizontal fiscal imbalance increases by 1,087.75 pesos. In turn, the political factor influences 90% of the horizontal imbalances but only in the period 2008 to 2016.

Suggested Citation

  • Luis Lenin Herrera Diaz de Leon & Roberto Gonzalez Acolt & Cristian Omar Alcantar Lopez, 2023. "Transfers And Horizontal Fiscal Imbalances In The Main Large Municipalities Of Mexico Transferencias Y Desequilibrios Fiscales Horizontales En Los Principales Municipios Grandes De Mexico," Revista Internacional Administracion & Finanzas, The Institute for Business and Finance Research, vol. 16(1), pages 1-14.
    • Handle: RePEc:ibf:riafin:v:16:y:2023:i:1:p:1-14
    as

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    References listed on IDEAS

    as
    1. Weingast, Barry R., 2014. "Second Generation Fiscal Federalism: Political Aspects of Decentralization and Economic Development," World Development, Elsevier, vol. 53(C), pages 14-25.
    2. Blane D. Lewis & Paul Smoke, 2017. "Intergovernmental Fiscal Transfers and Local Incentives and Responses: The Case of Indonesia," Fiscal Studies, Institute for Fiscal Studies, vol. 38, pages 111-139, March.
    3. Jameson Boex & Jorge Martinez-Vazquez, 2007. "Designing Intergovernmental Equalization Transfers with Imperfect Data: Concepts, Practices, and Lessons," Springer Books, in: Jorge Martinez-Vazquez & Bob Searle (ed.), Fiscal Equalization, chapter 0, pages 291-343, Springer.
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    JEL classification:

    • H77 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Intergovernmental Relations; Federalism

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