From a national perspective, stable and growing revenue has been obtained through rigorous tax management, including cancelling tax credits, collecting delayed or contested tax payments, and reducing tax expenditures, among other factors. This has served as an anchor for public debt sustainability and macroeconomic management. Mexico’s current government has been able to sustain and even boost tax revenues. At the subnational level the situation is worse, given that almost all states and municipalities are completely financially dependent on federal government transfers. Mexico’s government revenues as a percentage of GDP are closer to Africa’s average (16.6%) and near the bottom of countries in LAC, as shown in Table 1. Mexico looks like a giant on shaky feet, since its capacity to raise taxes is far from its LAC counterparts. I argue that a stronger Congress, at least in budgetary affairs, does not necessarily put a strain on the Mexico’s stability, but actually enhances Mexico’s democratic system. In the third and final section, I argue that Congress does not change the executive budget proposal over the years and despite this, the executive budget execution fluctuates on a variety of key indicators. In the second section, I argue that current economic and fiscal policies have promoted political and economic stability and that ideological considerations are an obstacle when assessing both previous administration and the present government’s budget execution. In the first section I address Mexico’s historical and present issues regarding taxation. Overall, due to the lack of resources, presidents and Congress have struggled to fund their short-term policy priorities, and their long-term policy goals are often only aspirational. While the current government has improved tax management, longer-term tax policy is not on the agenda. The average Mexican voter might bristle at the notion of not being taxed enough, but Mexico ranks near the bottom of Latin American countries with respect to taxation as a percentage of GDP. Less obvious, but also important, is that taxation is insufficient to provide the goods and services of a mature democracy. This issue is important because the annual national budget typically experiences significant changes and citizen voices are unheard because of the lack of congressional presence.
With respect to checks and balances in budgetary processes, the national congress has played a negligible role, especially with regard to oversight of budget execution. Yet, Mexico appears to have reached the limits of its democratic potential. Over the past 25 years, it has succeeded in institutionalizing electoral democracy, with periodic, transparent, and competitive elections. In this paper, I argue that Mexico has accomplished a historical record of political and economic stability. Mexico has been historically incompetent to raise taxes and the current president has ruled out the possibility of a tax reform.
DEMOCRACY 3 GDP FULL
Indeed, part of being considered a full democracy means better services and public policies, as well as long-term sustainability which can only be supported by proper taxation. Yet, democracies also need to deliver and for this, proper funding is key. In mature democracies, congresses have a special role in governing the public purse, and this means not only approving but truly overseeing the Executive’s power budget execution by looking at how public revenues, expenditures, and debt, evolve. But their role goes beyond a political or legal one.
Institutions matter, and among these, national congresses are, or at least should be, key players. John Bailey, Emeritus Professor and former Director of the Mexico Project at the Center of Latin American Studies, Georgetown University, for his comments and input.įree and fair elections are key but not unique components of full democracies. Careers, Fellowships, and Internships Open/Close.Wahba Institute for Strategic Competition.Science and Technology Innovation Program.Refugee and Forced Displacement Initiative.
The Middle East and North Africa Workforce Development Initiative.Kissinger Institute on China and the United States.Nuclear Proliferation International History Project.North Korea International Documentation Project.Environmental Change and Security Program.Hyundai Motor-Korea Foundation Center for Korean History and Public Policy.
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