The political economy of municipal transfers: Evidence from Mexico

Jeffrey F. Timmons, Daniel Broidy

Research output: Contribution to journalArticle

Abstract

How do fiscal institutions, partisanship, and governance affect federal transfers to municipalities? We address this question using a novel research design and data set for Mexico.We compare the state-level obligations for federal transfers to municipalities with the distribution of these funds as reported by municipalities. This strategy allows us to know whether state-level formulas are binding, whether there are partisan skews in the formula, and how and why governors reallocate funds.We find that state-level fiscal institutions are quite binding; even so, deviations from the formula total approximately US$300-500 million annually. Whereas Partido Revolucionario Institucional governors appear to reallocate to municipalities when they are governed by their co-partisans, Partido Acción Nacional and Partido de la Revolución Democrática governors appear to reallocate funds to municipalities for equity, stabilization, and disasters (with no detectable partisan bias).

Original languageEnglish (US)
Pages (from-to)551-579
Number of pages29
JournalPublius
Volume43
Issue number4
DOIs
StatePublished - Sep 2013

ASJC Scopus subject areas

  • Sociology and Political Science
  • Public Administration

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