Federal conditional transfers in developing countries: The case of FISM in Mexico

Abstract

This article tries to determine whether federal transfers called FISM are distributed in a redistributive manner. We use the Municipal Mayors National Survey (2002) in a two step- GMM model. Empirical results suggest that although these transfers are redistributive, there is still a discretionary room. That is these transfers could be more redistributive. The discretionary room is associated to population, which in turn is related with electoral vote. Thus, there is some political variable in the distribution of this Fund.