Achievements and challenges of fiscal decentralization: by Steven B. Webb, Marcelo M. Giugale

By Steven B. Webb, Marcelo M. Giugale

The 3 forces of democratization, decentralization, and improvement have swept across the world the decade and redrawn the maps of politics, energy, and prosperity. glossy Mexico has been absolutely engaged within the trio, making it a wealthy case research. in recent times, stronger political pageant has redistributed decisionmaking throughout all degrees of presidency, making the govt extra responsible to the typical citizen. It has additionally given subnational governments a renewed function as fiscal brokers. The taxation, spending, borrowing, and associations of Mexican states and municipalities at the moment are 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 important reforms develop into either inescapable and, extra importantly, a perceived resource of power gift. This ebook is the manufactured from the analytical paintings of a big variety of specialists, Mexican and international. within the ebook, the specialists record Mexico's decentralization event; conceptualize its major developments, guidelines, and concepts; and convey it into the sunshine of foreign comparability. They distill serious classes and demanding situations which are of relevance for Mexico, for Latin the USA and, regularly, for nations which are embarking on a ways achieving decentralization efforts. This renders the quantity a huge contribution to our wisdom and pondering during this sector; and a well timed one, considering decentralization is an irreversible technique that's more likely to proceed occupying policymakers for years yet to come.

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The federal transfer system may need to provide extra support there. Faced with these economic realities, the teachers may see the necessity and benefit of having their union focus less on negotiating national raises and more on setting standard negotiating frameworks for local branches. Separating the assignment of responsibilities for maintenance and operation of infrastructure facilities from responsibility for capital investment has been a persistent problem in Mexico. For example, municipalities are in charge of maintaining school buildings, while the federal and state governments carry out most capital investments.

Prevention and Resolution of Conflicts Sound intergovernmental coordination will require specific institutions for negotiations and conflict resolution, because effective decentralization requires more than the design of revenues, transfers, borrowing, and responsibilities. No system can foresee and specify everything in advance. Issues and disputes arise that need to be settled, and the method for doing this has important incentive effects for how the system actually works. Like other decentralizing countries, Mexico has a growing number of interjurisdictional conflicts.

In 1998-99, as the fiscal reform agreements ended, the fund was phased out, with a residual going to a national disaster relief fund with transparent rules of access. In 1999, a few incidents, especially with Chihuahua and Nuevo Leon, demonstrated power of states to demand ad hoc resource transfersdebt relief or federal spending on state-priority projects. In the budget for 2000, the Program of Support for Strengthening the Federal Entities was created in Ramo 23, but with Congress allocating the funds to states, not at executive discretion.

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