Intergovernmental Transfers and Their Effects on Interregional Inequality and Fiscal Performance at the Municipal Level in Jalisco, Mexico
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Abstract
The objective is to examine the effect that intergovernmental transfers cause on interregional inequality in the municipalities of Jalisco, simultaneously taking into account their impact on the levels of municipal fiscal performance in the period 2010-2020. To accomplish this, panel-type models were estimated and a fiscal performance index was constructed. From the evidence obtained, it was identified that transfers cause a positive effect by mitigating inequality. However, transfers also generate negative incentives for around 49% of the municipalities in the entity to present critical or catastrophic fiscal performance; On the other hand, Tlajomulco de Zúñiga, Zapopan and Zapotlán el Grande stand out as the only municipalities in Jalisco that have optimal fiscal performance.
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