The Hat-Tipping Analysis of Mexican States' Revenue
Mexico's states face a revenue challenge, with most heavily reliant on federal funds. A study by IMCO reveals alarming financial opacity, with 88% of states unclear on federal fund usage. Addressing this requires legal reforms, overhauling procurement laws, and tech-driven tax collection.
A country's wealth is not just a reflection of its income but also a testament to its public policy decisions. The more a state can generate revenue, both from its sources and from federal allocations, the better positioned it is to offer superior goods and services and ensure wealth redistribution. This is a fundamental principle of governance and economic management. But how does this play out in Mexico?
The Mexican Institute for Competitiveness (IMCO) recently undertook a comprehensive study of the revenue collection and management capacities of Mexico's 32 states. Their findings shed light on some pressing challenges and also offer potential solutions.
