Unequal development : decentralization and fiscal disparities in the Metropolitan Zone of the Valley of Mexico

This study is about the impact of decentralization in metropolitan areas. Studies of fiscal decentralization have largely centered on the formal tiers of government, without looking at the effects of this process on the recipient jurisdictions in metropolitan areas. This is an important omission, considering that more than 50 percent of the world's population lives in urban areas that often extend beyond formal jurisdictional boundaries. As a response, in this study I incorporate the metropolitan dimension into the study of fiscal decentralization. After integrating a database with information on the public finances of the Metropolitan Zone of the Valley of Mexico (ZMVM), I test the hypothesis that the policies of fiscal decentralization in Mexico have exacerbated the level of fiscal disparity in this metropolitan area. My results show that fiscal disparity in the ZMVM increased during the 1990s. Fiscal decentralization had two different and opposite effects on fiscal disparities in the ZMVM. On one hand, fiscal decentralization mitigated fiscal disparities through the use of a system of redistributive transfers. On the other, and in contrast to this equalizing effect, decentralization has exacerbated the level of fiscal disparity by accentuating the differences of the jurisdictions' expenditure needs and their capacity to collect local taxes.

Department dc:contributor.department

Massachusetts Institute of Technology. Dept. of Urban Studies and Planning.

Grantor dc:publisher

Massachusetts Institute of Technology

Year dc:date.issued

2006

Author dc:creator

• Raich, Uri

Advisor dc:contributor.advisor

• Diane E. Davis.

• Urban Studies and Planning.

Statement dc:rights

• M.I.T. theses are protected by copyright. They may be viewed from this source for any purpose, but reproduction or distribution in any format is prohibited without written permission. See provided URL for inquiries about permission.

Licence dc:rights.uri

• http://dspace.mit.edu/handle/1721.1/34407
• http://dspace.mit.edu/handle/1721.1/7582

Language dc:language.iso

eng

Identifier URI

http://dspace.mit.edu/handle/1721.1/34407

OAI identifier oai:identifier

oai:dspace.mit.edu:1721.1/34407