Governance, Development, and Social Inclusion in Latin America Varieties of Subnational Debt Management Governance Mexico

Interviews with these key financial players, not only at the federal level but also at local level, in their interpretation, usability and access of the current financial models are assessed and help to explain the current financial state of Mexico. “Varieties of Sub-National Debt Management and Governance in Mexico” is a timely addition to the climate debate. By analyzing Mexico’s municipal bond market Smith provides a unique opportunity to deal with the divergent approaches to invest in green bonds. Building upon an analysis of the necessary regulation and enabling environment for debt markets to be successful in developing countries, the book uses a political economy approach and applies public financial management fundamentals. The book should be read by academics, students and practitioners for their advancement in managing climate funds in the future.” --Hilton Root, Professor at George Mason University "Smith has compiled a knowledgeable and useful account of how Mexico's local governments fund themselves, in general and in relation to climate change. She reviews history, practices, and lessons from a country whose federal constitutional arrangement really took off in the early 2000s---after decades of de facto centralized authority. As such, she gives us a very worthy addition to the professional analysis of public finance." --Marcelo M. Giugale, Adjunct Professor at Georgetown University and former Director at the World Bank. This book investigates how Mexico’s subnational governments manage debt, employing a mixed-methods design that pairs quantitative analysis of federal and municipal financial databases with interviews of state and local finance leaders. Through case studies of Nuevo León, Guanajuato, the State of Mexico, Mexico City, and the cities of León, Guanajuato City and Monterrey, it examines regulatory environments, financing mechanisms and the challenges governments face in creating a domestic capital market. The study uncovers key drivers of municipal bond issuance, evaluates the usability of current financial models, and offers policy recommendations to enhance subnational infrastructure financing especially for green financing. Heidi Jane M. Smith is Professor of Public Policy in the Department of Economics at the Universidad Iberoamericana in Mexico City. This book analyses debt management in subnational governments in Mexico via quantitative and qualitative methods of research. Particularly, the project initiates the much-needed discussions on the role that subnational governments in Mexico can play in the financing of infrastructure, as well as the challenges and opportunities associated with their participation in capital markets. The author includes interviews with state leaders to corroborate the statistical analysis created and generated with the federal municipal and state databases. Case studies include: four states—Nuevo León, Guanajuato, the State of Mexico, and Mexico City—and three major metropolitan areas—León, Guanajuato, and Monterrey. Interviews with these key financial players, not only at the federal level but also at local level, in their interpretation, usability and access of the current financial models are assessed and help to explain the current financial state of Mexico.