State Debt and Economic Development in Tamaulipas, MMxico (2003-2013)

Abstract

In Mexico, the states receive funding in three different ways: local tax revenue, federal revenue sharing (Branch 28) and federal contributions (Branch 33). The local tax revenue represents a small percentage of the total state revenue, which averages 7.2% of the total revenue. Tamaulipas’ public debt grew on an average annual rate of 27.24% in the period 2003-2013, reaching in 2011 a public debt per capita of 3340 pesos, whereas in 2003 it barely rose 255 pesos per capita. However, the pace of public indebtedness has not generated economic growth, which on average was 2.29% for the period 2003-2013, inferior to the national level of 2.63%, despite the public debt grew 30.35%. It is concluded that there is no correlation between the level of public debt in Tamaulipas, the economic growth rate and the improvements in essential aspects for competitive conditions.