By Steven B. Webb, Marcelo M. Giugale
The 3 forces of democratization, decentralization, and improvement have swept internationally the decade and redrawn the maps of politics, strength, and prosperity. glossy Mexico has been totally engaged within the trio, making it a wealthy case learn. lately, more advantageous political pageant has redistributed decisionmaking throughout all degrees of presidency, making the govt extra dependable to the typical citizen. It has additionally given subnational governments a renewed function as monetary brokers. The taxation, spending, borrowing, and associations of Mexican states and municipalities are actually more and more lower than the rigor of industry self-discipline. The mixed, nearer scrutiny of electorate and financiers is making a new incentive framework for policymakers-a framework the place valuable reforms turn into either inescapable and, extra importantly, a perceived resource of capability gift. This booklet is the manufactured from the analytical paintings of a big variety of specialists, Mexican and international. within the ebook, the specialists rfile Mexico's decentralization event; conceptualize its major developments, rules, and recommendations; and convey it into the sunshine of overseas comparability. They distill serious classes and demanding situations which are of relevance for Mexico, for Latin the US and, quite often, for international locations which are embarking on a long way achieving decentralization efforts. This renders the quantity an enormous contribution to our wisdom and considering during this sector; and a well timed one, considering the fact that decentralization is an irreversible strategy that's prone to proceed occupying policymakers for future years.
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Extra info for Achievements and challenges of fiscal decentralization: lessons from Mexico
Source: SHCP and authors' estimates. Page 3 at all on provincial borrowing, leaving the regulatory task entirely to the capital market, although the provinces impose strict controls on municipal borrowing. The regional inequalities arising from differences in the tax base in Canada are partly equalized through federal transfers. Switzerland and the United States follow variants of this model, though with less equalization (none in the United States), less uniform state tax policies, and more detailed federal attempts to influence state spending.
Mexico could, in principle, mix and match these characteristics as it wishes. Given that Mexico has already made the major decisions about decentralization of spending responsibility and subnational borrowing, the next critical decision concerns the importance of transfers and the extent to which the tax system should be decentralized. This will go hand in hand with the decision about the degree to which federal transfers will compensate for the regional disparities that would otherwise follow from tax decentralization.
However, inasmuch as Ramo 33 enshrined inertia in territorial allocation of resources for education, it may be considered more a tool for deconcentration than a decentralization measure that enhances efficiency. HealthDecentralization in the health sector started earlier and proceeded more gradually, allowing states and municipalities more time to learn. Six features of the system today make it work relatively well: 1. Resource allocation from the federal level to states according to well-recognized criteria; 2.
Achievements and challenges of fiscal decentralization: lessons from Mexico by Steven B. Webb, Marcelo M. Giugale