The Effects of Fiscal Rules on Mexico’s Municipalities: Looking at Fiscal Behavior Changes

Ignacio Ruelas Avila

International Journal of Public Administration, 2025, vol. 48, issue 12, 799-816

Abstract: This paper evaluates the fiscal effects of the Financial Discipline Law for States and Municipalities (LDFEM, in Spanish) on Mexican local governments. As a public financial management (PFM) reform, the LDFEM is an agency solution that establishes a national fiscal rule to align subnational fiscal behavior and achieve a sustainable fiscal position in all states and municipalities. This paper uses a quasi-experimental research design to explore the effects of complying with the LDFEM on financial conditions–budget balances and debt management. The findings suggest improvements in budget balances and debt costs and no impact on variations in debt obligations.

Date: 2025
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DOI: 10.1080/01900692.2024.2418302

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