Why Focus on Spending Needs Factors? The Political Economy of Fiscal Transfer Reforms in Mexico
October 1, 2007
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Summary
An equalization system ensures that subnational governments can provide similar level of public services at a comparable level of own tax-effort. This paper focuses on the importance of spending needs factors in the design of equalization transfers as well as special purpose transfers-and the role that this could have in setting the agenda for better accountability for recipient governments, illustrating both design and implementation questions with examples from Mexico. The paper also takes into account the difficult political economy constraints to reforming any system of transfers.
Subject: Education, Expenditure, Personal income, Revenue administration, Subnational tax
Keywords: federal government, per capita income, political economy, tax revenue, WP
Pages:
28
Volume:
2007
DOI:
Issue:
252
Series:
Working Paper No. 2007/252
Stock No:
WPIEA2007252
ISBN:
9781451868159
ISSN:
1018-5941
