Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/216460 
Year of Publication: 
2020
Series/Report no.: 
IZA Discussion Papers No. 13148
Publisher: 
Institute of Labor Economics (IZA), Bonn
Abstract: 
A rigorous understanding of the developmental effect of fiscal transfers to subnational governments remains an important policy research issue globally. This paper exploits a novel dataset of 20 years of municipal poverty maps and local public finances to study the effects on local welfare of a large fiscal transfer fund earmarked for social investment in more than 2,000 Mexican municipalities. Results show a positive but modest effect on the average household income, and positive effects on seven nonmonetary welfare measures. In contrast, these funds have no significant impact on extreme and moderate monetary poverty. These results provide important lessons for policy on the effects of earmarked funds to reduce territorial poverty and inequality in terms of incentives to design formulas to distribute earmarked fiscal resources to subnational governments.
Subjects: 
fiscal federalism
earmarked transfers
decentralization
poverty
Mexico
JEL: 
C26
D30
H72
H77
I3
Document Type: 
Working Paper

Files in This Item:
File
Size
819.43 kB





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.