Association for Public Policy Analysis & Management

Panel: Progress, Readiness and Resiliciency for Muncipalities

(Sustainable Government)

As different economic and political challenges have emerged in the global and national context, this panel attempts to discuss different topics related to the intricate nature of economic development, fiscal policy and financial sustainability of subnational governments in Mexico. Today, state and local governments are expected to manage complex financial risks and shocks over the long-term financial planning period without needing to introduce substantial financial adjustments that eventually impacts local development. This responsible and disciplined financial planning is known as financial sustainability and it is manifested through a responsible revenue, spending and debt management behavior in the areas of revenue, expenditure or borrowing. Many national governments create subnational debt laws to guarantee a certain degree of disciplined sustainable financial management. Mexico enacted its “Ley de Disiplina Financiera” in 2016 with the idea of providing the basis for a sustainable financial management of debt across subnational government. Other changes have also implemented by the federal auditing system to control subnational finances. This panel includes different empirical studies dedicated to ascertain the risks, pitfalls and opportunities of sustainable financial management with impact on local economic development. The findings from these empirical studies are useful to identify policy considerations for building a sustainable financial paths at the state level of government.