Mexico has achieved a high degree of decentralisation in public services, but the Mexican fiscal federal system has important shortcomings. States and municipalities have become heavily dependent on federal transfers to finance a growing share of public spending.
Informality has important implications for productivity, economic growth, and the inequality of income. In recent years, the extent of informal employment has increased in many of Mexico's states, though highly heterogeneously.
Legal systems provide the basic institutions for firms and markets to operate. Their quality can have important consequences on the size distribution of firms, who rely on them for contract enforcement. This paper uses the variation in legal system quality across states in Mexico to examine the relationship between judicial quality and firm size.
Policy makers must avoid the downside scenario of a major shock to the European and global financial systems. Europe has to mobilize its strengths, and put out the immediate fires associated with the spiraling banking and sovereign debt crisis, said OECD Secretary-General.
Country Notes from OECD Economic Policy Reforms: Going for growth 2011 presenting OECD recommendations for structural reform priorities for individual countries.
Improvements in the macroeconomic policy framework over the past two decades and prudent regulation of the financial system have contributed to reduce output volatility in Mexico relative to other OECD countries.
With slow growth and high inequality Mexico needs investments in infrastructure, education and social policies. Mexico has increased spending in all of these areas.
Mexico has a relatively large informal sector by OECD standards.
This seminar brings together policy makers from Latin America and economists from academia, international organisations and the private sector to discuss policies that would help Latin American countries to strengthen their growth potential.
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This note is taken from Chapter 3 of Economic Policy Reforms: Going for Growth 2010.