Mexico Public Expenditure Review
This Public Expenditure Review (PER) was prepared at the request of Mexico’s Ministry of Finance and Public Credit (Secretaría de Hacienda y Crédito Público, SHCP); its analysis of the efficiency, equity and impact of public spending in selected se...
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| Language: | English en_US |
| Published: |
Washington, DC
2016
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| Online Access: | http://documents.worldbank.org/curated/en/2016/08/26740181/mexico-public-expenditure-review http://hdl.handle.net/10986/25062 |
| Summary: | This Public Expenditure Review (PER) was
prepared at the request of Mexico’s Ministry of Finance and
Public Credit (Secretaría de Hacienda y Crédito Público,
SHCP); its analysis of the efficiency, equity and impact of
public spending in selected sectors is designed to inform
Mexico’s ongoing process of fiscal consolidation. The
Mexican government’s hard-earned reputation for fiscal
responsibility and sound macroeconomic management has
provided a solid foundation for stability and growth. As
Mexico strives to meet the challenges of a dynamic global
economic environment, this PER is intended to support the
government’s efforts to adjust expenditure policies to
better reflect the country’s evolving macro-fiscal
circumstances. The PER is organized into two sections; the
first focuses on overarching public expenditure management
and cross-cutting policy issues. Chapters two through five
examine the national macro-fiscal profile, selected issues
in fiscal decentralization, the budget process, the
performance evaluation system and human resource management
in the public administration. These chapters explore how a
combination of revenue shocks and structural expenditure
pressures is affecting Mexico’s public finances and consider
the implications of these trends over the medium term. They
evaluate the extent to which federal budgetary inertia
reflects sector-level policy commitments and describe how
built-in expenditure rigidities can complicate the
medium-term consolidation process. Chapters’ six through
twelve each focus on a sector with especially significant
fiscal implications: health; education; social assistance
and labor market programs; subsidies for rural development,
housing and small-businesses support; water and sanitation
infrastructure; and public security. These sector-level
analyses explore the combination of demographic trends and
policy commitments that are driving a secular increase in
both expenditure pressures and budgetary rigidities. The
government’s policy goal of achieving universal secondary
education will permanently increase the education budget,
while universal access to basic health insurance will drive
a similar structural expansion in public spending on health,
which will be compounded by the rising healthcare costs of
an aging population. These same demographic trends will also
intensify pressure on the social protection budget. The
rapid expansion of the police and security services will
entail significant long-term spending commitments, and the
fiscal impact of accelerated hiring will be magnified by the
incorporation of nearly half a million municipal police into
the national police force. Taken together, these trends will
greatly increase aggregate public spending in Mexico over
both the medium and long term. |
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