Social and Behavioral Sciences Commons^™

Mexican Northern Border Municipalities, Financial Dependence And Institutions, Jorge Ibarra Salazar, Andre V. Mollick

Economics and Finance Faculty Publications and Presentations

Mexican northern border municipalities have experienced economic and populational growth rates that are much higher than other Mexican regions resulting in higher demand for public services and infrastructure. The different institutional framework, both fiscal and legal, faced by municipalities in every Mexican State might impact the fiscal behavior of local governments. This article examines whether border municipalities are more financially dependent on central authorities due to the high demand for public services in their jurisdictions and their inability to obtain sufficient funding. Several econometric models are estimated for 300 Mexican municipalities in the year 2000. A strong and negative relationship …