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Working papers from the Economics Department of the OECD that cover the full range of the Department’s work including the economic situation, policy analysis and projections; fiscal policy, public expenditure and taxation; and structural issues including ageing, growth and productivity, migration, environment, human capital, housing, trade and investment, labour markets, regulatory reform, competition, health, and other issues.
The views expressed in these papers are those of the author(s) and do not necessarily reflect those of the OECD or of the governments of its member countries.
Getting the Most Out of Public Sector Decentralisation in Mexico
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- Isabelle Joumard1
- Author Affiliations
- 1: OECD, France
- 17 Oct 2005
- Bibliographic information
Enhanced autonomy of sub-national governments has spurred innovative management. Spending assignments across levels of government, however, often overlap and/or are not yet fully understood by most citizens. Sub-national governments’ accountability is further reduced by the heavy reliance on federal transfers, as opposed to own-revenues (taxes and user fees). In addition, the use of federal transfers as collateral for states' borrowing potentially undermines the role of financial markets in disciplining fiscal behaviour. Getting the most out of decentralisation would thus require a national agreement clarifying responsibilities for each level of government. Improving sub-national governments’ incentives in delivering cost-effective public services would further require improving the quality of information on actual spending and outcomes, raising the volume of their own taxes and reforming the grant systems. Decentralisation should also be more consistent with the aim of improving interregional equity in obtaining access to core public services. This Working Paper relates to the 2005 OECD Economic Survey of Mexico (www.oecd.org/eco/surveys/mexico).
- fiscal discipline, sub-national government, fiscal rules, intergovernmental grants, fiscal federalism, Mexico
- JEL Classification:
- H1: Public Economics / Structure and Scope of Government
- H2: Public Economics / Taxation, Subsidies, and Revenue
- H4: Public Economics / Publicly Provided Goods
- H5: Public Economics / National Government Expenditures and Related Policies
- H7: Public Economics / State and Local Government; Intergovernmental Relations