Mexico - Fiscal Sustainability (Vol. 2 of 2) : Background Papers
The study reviews the stabilization efforts, and successes that preceded, and have underpinned Mexico's sweeping market-oriented structural reforms since the late 1980s, anchored in strong fiscal adjustment. It seeks to support the Government&...
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| Language: | English en_US |
| Published: |
Washington, DC
2013
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| Online Access: | http://documents.worldbank.org/curated/en/2001/06/1552060/mexico-fiscal-sustainability-vol-2-2-background-papers http://hdl.handle.net/10986/15500 |
| Summary: | The study reviews the stabilization
efforts, and successes that preceded, and have underpinned
Mexico's sweeping market-oriented structural reforms
since the late 1980s, anchored in strong fiscal adjustment.
It seeks to support the Government's efforts, and
provides a body of technical analysis, by: correcting fiscal
trends for various business-cycle effects; building a
simulation model to assess the sensitivity of the fiscal
budget to exogenous shocks under structural scenarios;
estimating the direct, and indirect potential impact on the
fiscal accounts of closing public infrastructure gaps, and
funding contingent liabilities; and, consolidating the
financial accounts of the main public sector institutions to
assess sustainability of their aggregate debt path.
Following a brief review on fiscal issues, the report
focuses on selected sources of fiscal instability. Chapter I
questions the role of fiscal policy in determining output;
the responsiveness of the fiscal policy to the business
cycle; and, the "persistence" of fiscal policy vs.
financing needs, implying the fiscal policy lacks a design
that makes it a stabilizing feature of the economy. Chapters
II and III investigate the impacts of major exogenous
shocks, and provide estimates of the potential payoffs from
increased investment in public infrastructure, calculating
the optimal infrastructure stocks implied by the elasticity
estimates. Chapter IV addresses the measurement of
contingent liabilities, within the traditional budget
accounting framework, while Chapter V provides estimates of
the debt stock at the state level, suggesting disturbing
trends in the size, and concentration of the debt are
developing, and, sobering evidence on the health of the
sub-national pension systems suggest a large percentage of
these are either in actuarial deficit, or will be by 2001. |
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