Public debt, inequality and development in Mexico: state and municipal evidence
Deuda pública, desigualdad y desarrollo en México: evidencia estatal y municipal
DOI:
https://doi.org/10.29105/ensayos43.2-2Keywords:
Convergence, Economic Growth, Public Debt, InequalityAbstract
The article analyzes the relationship between the acquisition of public debt with inequality and economic development. Specifically, it uses the following variables: the growth rate of public debt, the Gini Index, and the Social Gap Index. It considers 31 states of the Mexican Republic and 2,414 municipalities from 2010 to 2018. The absolute and conditional convergence methodology and panel data analysis show that (I) under the conditional convergence hypothesis, the states and municipalities of Mexico came close in terms of public debt per capita in the period 2010-2018. The speed of approximation is greater in the states than in the municipalities, (II) the conditional convergence indicates that inequality significantly explains the growth rate of public debt in the states but not in the municipalities, (III) the panel data model highlights that, for six of the eight geographic regions in Mexico, inequality is important in explaining the increase in municipal debt over time. In addition, in the case of the Central North and Northeast regions, the Social Gap Index significantly explains the evolution of per capita debt, and (IV) the estimated models show regional differences over time. In the case of the Southwest region, which includes three of the states with the greatest social backwardness, none of the models considered explains the evolution of public debt per capita.
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