Abstract

HERRERA AGUILAR, Saúl  and  MARTINEZ HERNANDEZ, Francisco Antonio. Taxation and financing in subnational governments and their impact on development: the case of Brazil and Mexico (1995-2010). Anál. econ. [online]. 2017, vol.32, n.81, pp.119-149. ISSN 2448-6655.

A comparative analysis is made of regional public finances activity in Brazil and Mexico, and its impact upon the development of the different regional demarcations in these two countries. “Subnational” governments are very relevant for the welfare of their populations and for that reason the contributions of local development theory are taken as a starting point, as it centers upon the interaction between regional governments, the comparative resources of each territory, and the activities of private enterprise into the process of growth and economic development. For this reason the analysis starts with the hypothesis that the local governments with the largest fiscal autonomy and that can take advantage in an efficient manner of their resources by way of expenditure, improve the welfare of their inhabitants by way of their use of public resources. It also shows by way of a multidimensional analysis to determine correlations, and the elaboration of panel models that the regions (or states) with most economic and social progress are those that have a large degree of fiscal autonomy, carry out a better assignation of public money in priority areas, and take advantage in a more efficient way of their resources.

Keywords : local development; tax collection; public spending; federalism.