MEXICO CITY

MEXICO

North America

CONTINENT

Mexican Peso

CURRENCY

Spanish

LANGUAGE

In 2016, Mexico City was selected by United Nations Habitat and the Lincoln Institute of Land Policy to participate in a pilot project to develop the initial prototypes of a global municipal database that could present the first integrated view of urban planning and fiscal information for a global network of cities. The project was inspired by the realization that the fiscal health of municipalities, and the alignment of urban planning and public finance functions, are important to enabling the success of city leaders facing the challenges of sustainable urbanization.

The principal unit of analysis for this project is the city. An original data gathering effort documented the framework of fiscal governance for the city, its demographic profile, and then incorporated data on the quantity and quality of urban expansion occurring across the city’s jurisdiction, urban layouts, and key land-use planning indicators. External sources were also leveraged to incorporate a national macro-level context for the intergovernmental framework that each city operates in.

By starting with the city as the unit of analysis, the project is designed to fill an important vacuum and improve the micro-level understanding of a city’s framework of public finance and urban planning. Expanding access and transparency to this information will enable the appraisal of the strengths or weaknesses in the trajectory of a city, and help national, subnational, and local governments identify interventions that can improve the performance of core municipal systems. The initial presentation of select components being developed for this integrated approach for Mexico City appear below.

Mexico City Summary

Mexico City is the capital of the country of Mexico. The city operates within a federal system of government established by the Constitution of the United Mexican States, which sets the foundation for fiscal governance and creates the level of decentralization experienced by municipalities in Mexico. At present, Mexico is organized in three levels of government: federal, state, and municipal. Within Mexico there are 31 states, 2,442 municipalities and (until 2016) one Federal District, which was integrated by 16 delegations. The Federal District is now called Mexico City, and its delegations have become municipalities (alcaldias) which have state-like status.

Notable elements of the fiscal governance framework are present in Article 115 of the Constitution, which establishes expenditure responsibilities of Mexican municipal governments and their taxing capabilities, including the property tax as a prominent own-source revenue. Constitutional Articles 73, 117, 118, and 131 create an enabling framework for taxation in Mexico where taxes (outside those entitled to the federal government) can be raised by state governments. Thus, states in Mexico have residual tax capabilities. Revenue capabilities, however, are heavily concentrated in the federation. In 2010, for example, 95.8% of total tax revenue came from federal taxes, 2.8% from state taxes, and 1.4% from municipal taxes.

The Fiscal Coordination Law (Ley de Coordinacion Fiscal) creates the intergovernmental transfer system in Mexico. This law, together with the Budget and Fiscal Responsibility Law (Ley de Presupuesto y Responsabilidad Hacendaria), create the enabling framework for determining how the federal government assesses local governments’ expenditure coming from federal transfers. The intergovernmental transfer system in Mexico has two main types of transfers: unconditional transfers (participaciones) and conditional transfers (aportaciones). Both types of transfers are distributed from the federal government to state and municipalities via a formula.

Mexico City has a few state-owned public enterprises and decentralized public organizations (Organismo Público Descentralizado), some of which provide health and transport services in support of the city’s service mandates. Such entities make up for most of the decentralized expenditure.

Over the past few decades in Mexico City, the urban extent and its population has been growing. Urban extent is the combined built-up area and open space associated with a city (not limited to its administrative boundary). From 1990 to 2014, the urban extent of Mexico City has grown by over 100,000 hectares and the population in the urban extent has increased over 80%.

17,765,121

Population in the Urban Extent1

149,500 Hectares

City Area2

210,020 Hectares

Urban Extent3


Expenditure Mandates Framework

A qualitative framework for analyzing the expenditure responsibilities that have been devolved to the city from higher levels of government is presented here. Expenditure responsibilities by function are the core indicators of this framework. This is intended to enable an analysis regarding the suitability of the city's fiscal decentralization framework to generate the necessary resources to finance the city's service and expenditure needs. For expanded information on these indicators and the role they play in city analysis generally in the context of this project, read our Data Governance, Methodology & Sources Document.


Revenue & Resource Mobilization Fiscal Framework

A qualitative framework for analyzing how cities facing the challenge of providing public goods, citizen services, and maintaining public infrastructure can raise and diversify revenues and capital to manage their obligations is presented here. Own-source revenues, intergovernmental transfers, borrowing authority, select indicators of land value capture, and others, are at the core of this framework. For expanded information on these indicators and the role they play in city analysis generally in the context of this project, read our Data Governance, Methodology & Sources Document.


Urbanization Indicators Framework

A framework for analyzing the changing spatial character of urbanization, for the city and its surrounding jurisdiction, are presented here. The focus is on the city’s geographic urban extent – meaning the characteristics that are present within the relatively contiguous built-up areas (and their open spaces) extending over the formal administrative boundaries of the city into areas one might associate with a metropolitan area. Population, density, and other indicators are at the core of this framework. For expanded information on the indicators in this diagram from the Atlas of Urban Expansion, read our Data Governance, Methodology & Sources Document.


Urban Spatial Structure Indicators

A selection of indicators that can support leaders planning for future urbanization are presented here. The indicators enable an analysis of urban sprawl, city compactness, land use fragmentation, and other aspects of urbanization. Additional indicators (land ownership patterns, land-use planning practice indicators, prices, key attributes of different types of residential plots, houses, and apartments, among others) are also part of the framework. For expanded information on these indicators and the other Urbanization and Urban Planning indicators that appear in this diagram from the Atlas of Urban Expansion, read our Data Governance, Methodology & Sources Document.

1 Data is presented for 2014. Source: Atlas of Urban Expansion
2 Data is presented for 2015.
3 Data is presented for 2014; Source: Atlas of Urban Expansion
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