We develop a model with optimal shares of intergovernmental transfers, and we apply a simulation analysis of our model for the case of Mexico. The main outcomes of this paper are as follows: First, we provide optimal shares of intergovernmental funds to be allocated in each state considering the regional distribution of the benefits of local public spending in Mexico. Second, our analysis shows that the regional heterogeneity of preferences across regions should be an important determinant of federal funds allocated to state governments. Third, the current system of finance relies on a tax revenue sharing accord that emphasizes nationwide tax collection issues as the main determinants of intergovernmental transfers and local spending. Our analysis provides a contrast between how fiscal policy is conducted, and feasible choices of policy reform. Fourth, our analysis of simulation identifies winners and losers from policy reform, and so our analysis contributes to a better understanding of the advantages and shortcomings of the current policy of intergovernmental transfers, providing feasible ways to improve the outcomes of subnational government spending.

中文翻译：

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偏好与区域间异质性与政府间转移

我们开发了具有最佳政府间转移份额的模型，并且针对墨西哥的情况对模型进行了仿真分析。本文的主要成果如下：首先，考虑到墨西哥当地公共支出的收益的区域分布，我们提供了各州分配的最佳政府间资金份额。其次，我们的分析表明，跨地区偏好的区域异质性应该是分配给州政府的联邦资金的重要决定因素。第三，当前的财务系统依靠一项税收收入分成协议，该协议强调了全国性的税收问题，作为政府间转移支付和地方支出的主要决定因素。我们的分析在财政政策的执行方式与政策改革的可行选择之间提供了对比。