Mexico : A Comprehensive Development Agenda for the New Era

, by Giugale, Marcelo M.; Lafourcade, Olivier; Nguyen, Vinh H.

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ISBN: 9780821349144 | 0821349147
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Copyright: 4/1/2001

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This book is a compendium of Mexico's development process, one that recognizes its comprehensive and multi-faceted nature. It focuses on five overarching themes including fiscal sustainability, growth and competitiveness, poverty and inequality, sustainable future, and good government.

Acknowledgments

xix

Foreword

xxiii

Acronyms

xxvii

Synthesis

(22)

Rationale and Organization

(1)

Core Messages

(19)

Consolidating Macroeconomic Gains

(4)

Accelerating Growth through Enhanced Competitiveness

(4)

Reducing Poverty through Human Capital Development

(5)

Balancing Growth and Poverty Reduction with Protecting Natural Resources

(1)

Building an Efficient, Accountable, and Transparent Government

(3)

Conclusion: Putting It All Together

(2)

Synthesis (in Spanish)

(724)

Part I

Fiscal Sustainability

(8)

Introduction

(1)

Government Solvency and Sustainable Debt

(1)

Conceptual Distinctions: Explicit and Implicit (Real or Contingent) Fiscal Deficits

(1)

Recommendations

(5)

Fiscal Sustainability

(1)

Public Debt Management

(2)

Pension Reform

(2)

Growth and Competitiveness

(26)

Macroeconomic Overview

(1)

The Financial Sector

(9)

Overview

(4)

Need for Increased Efficiency

(2)

Need for Improved Accessiblity

(2)

Need for Increased Stability and Soundness

(1)

Infrastructure

(10)

Consolidating and Extending Sectoral Reforms

(7)

Financing Infrastructure Services

(1)

Agriculture

(6)

Table 1. GDP: Average Yearly Growth Rates by Sector

(1)

Figure 1. Foreign Direct Investment

(1)

Figure 2. Exports by Region

(1)

Figure 3. Evolution of the Minimum Wage

(1)

Figure 4. Evolution of Mean Daily Earnings Per Worker, Manufacturing Sector

(2)

Figure 5. Public Investment versus Oil Prices

(5)

Figure 6. Mexico: Public, Private, Total Investment as Percent of GDP

(10)

Figure 7. Economic and Agriculture Growth Rates

(5)

Poverty and Inequality

(32)

Introduction

(4)

Providing Security

(6)

Evaluating Government Programs

(5)

Identifying Key Risks and Gaps in Coverage

(1)

Building Opportunities

(16)

Health

(3)

Education

101

(3)

Urban Labor Markets

104

(4)

Rural Development

108

(3)

Empowering Specific Groups

111

(6)

Indigenous Peoples

111

(4)

Gender Issues

115

Figure 1. Broad-based and Targeted Policies

(1)

Figure 2. An Alternative Framework for Poverty Reduction

(3)

Figure 3. Resources Channeled to Poverty Alleviation Programs

(1)

Figure 4. Government Spending for Poverty Alleviation

(7)

Table 1. Managing Social Risk in Mexico: Main Risk Indicators, Size of Ac-Risk Groups, and Best Practice Polity Responses

(21)

A Sustainable Future

117

(16)

Recent Developments

117

(4)

International and Domestic Context

117

(1)

The Legal and Institutional Response

118

(2)

Some Initial Successes and Achievements: Biodiversity and Air Pollution

120

(1)

Issues

121

(5)

Environmental Degradation

121

(2)

Policies and Incentives

123

(1)

Institutions and Environmental Management

124

(2)

Options for the Future

126

(7)

Institutional Strengthening

126

(1)

More Clout to Core Functions

127

(2)

Mainstreaming

129

Table 1. Sectoral Distribution of Depletion and Degradation, 1996

122

(5)

Figure 1. Environmental Responsibilities

127

(6)

Accountability and the Demand for Quality Government

133

(12)

Rationale and Overview

133

(1)

Decentralization: Assuring the Sustainability of a Process Already in Motion

134

(2)

Justice: Making Reforms Work

136

(3)

Corruption: A Broad, Pending Agenda

139

(6)

Part II Fiscal Sustainability

Macroeconomic Assessment

145

(18)

Introduction

145

(3)

Macroeconomic and Financial Vulnerability

148

(4)

Fiscal Sustainability and Opportunities to Increase Potential Growth

152

(2)

Fiscal and Monetary Policies: Their Role in Macroeconomic Management

154

(1)

The Choice of an Exchange Rate System

155

(3)

Options with Regard to Monetary Policy Regime

158

(2)

Money Anchor

158

(1)

Inflation Targeting

158

(2)

Conclusions

160

(3)

References

161

Figure l. Annual Inflation (Variation: December to December)

146

(1)

Figure 2. Annual Growth of Real GDP

146

(3)

Figure 3. Current Account Balance

149

(2)

Figure 4. Real Exchange Rate Indexes (1990=100)

151

(2)

Figure 5. Public Sector Indicators

153

Table 1. Indicators of Foreign Vulnerability

148

(2)

Table 2. Foreign Debt in Regional Context

150

(13)

Fiscal Sustainability

163

(16)

Background

163

(3)

Brief History of Mexican Fiscal Policy

163

(1)

Fiscal Sustainability Defined

164

(2)

Issues

166

(8)

Fiscal Policy and Business Cycles

166

(2)

Deficit Reductions and Infrastructure

168

(1)

Taxation

169

(1)

Contingent Liabilities

170

(2)

Summary of Empirical Tests of Fiscal Sustainability

172

(2)

Policy Options

174

(2)

Assessment of the Scope of the Problem: Omissions and Benchmarking

174

(2)

Conclusion

176

(3)

References

177

Figure 1. Mexico Public Net Debt and Primary Deficit (+) as Percent of GDP 1980-98

165

(1)

Figure 2. Mexico Overall and Primary Deficit (+) as Percent of GDP 1980-98

165

(2)

Figure 3. Composition of Export

167

(1)

Figure 4. Fiscal Revenues and Oil Dependence

167

(1)

Figure 5. Primary Deficit vs. Public Investment

168

(1)

Figure 6. Public Investment vs. Oil Prices

169

(1)

Figure 7. Tax Revenue as Percent of GDP, Selected Countries 1992-98

170

(1)

Figure 8. Components of Tax Revenues as Percent of GDP, Mexico 1980-98

171

(4)

Figure 9. Concentration and Growth of Subnational Debt, 1994-98: Selected States

175

(1)

Figure 10. Gross Federal Debt as Percent of GDP: International Benchmarks

176

Table 1. Estimate of the Overall Cost of the Financial Rescue, December 1999

172

(1)

Table 2. Contingent Liabilities Recognized by the Federal Government

173

(1)

Table 3. Mexico Federal Debt

174

(5)

Challenges and Prospects for Tax Reform

179

(20)

Background

179

(1)

Level and Structure of Taxation in Mexico

180

(2)

Current Policies and Options in Mexico's Tax Regime

182

(12)

Oil Taxation

183

(2)

Corporate Income (Profit) Tax

185

(1)

Personal Income Tax

186

(2)

Value-Added Tax

188

(2)

Excises

190

(1)

Sub-national Taxes

191

(3)

Administration, Collection, and Enforcement

194

(2)

Tax Reform Implementation Strategy

196

(3)

References

197

Table 1. Mexico: General Government Revenues

180

(8)

Table 2. Effectiveness of Value-Added Tax Collection, 1997

188

(11)

Public Debt Management Stocktaking and Challenges Ahead

199

(24)

Introduction

199

(2)

Public Debt Management: Recent Experience in Mexico

201

(1)

Nonfinancial Public Sector

201

(6)

Instituto de Proteccion al Ahorro Bancario (IPAB)

207

(3)

Fideicomiso de Apoyo para el Rescate de Autopistas Concesionadas (FARAC)

210

(2)

Proyectos de Impacto Diferido en el Registro del Gasto (PIDIREGAS)

212

(1)

Other (Contingent) Liabilities

213

(1)

Indexation of Domestic Debt Instruments

213

(1)

Absorptive Capacity of the Domestic Debt Market

214

(3)

Conclusions

217

(6)

Bibliography

219

Figure 1. Total, Domestic and External Public Debt, 1989-99

202

(1)

Figure 2. Real Exchange Rate, 1989-99

202

(3)

Figure 3. Average Maturity, Domestic Public Debt

205

(1)

Figure 4. Composition of Domestic Public Debt Instruments

205

(15)

Annex 1. Mexico's Domestic Debt: Auction Structure (February 1998-December2000)

220

(1)

Annex 2. IPAB Debt Accounting Framework

221

(2)

Pension Reform

223

(18)

The Demographic Context to Pension Reform

223

(1)

The Fiscal Context of Pension Reform

224

(3)

The Mandatory Pension System for Private Sector Workers

225

(1)

Pension System for Federal Government Employees

226

(1)

Pension Systems for State Government Employees

226

(1)

Pension System for Employees of Parastatal Enterprises

227

(1)

Status of Reforms

227

(1)

The Future Reform Agenda

228

(6)

Pension Systems for Private Sector Employees

229

(2)

Pension Systems for Public Sector Employees

231

(1)

INFONAVIT

232

(1)

Complementary Reforms in Capital Markets

233

(1)

The Social Dimension of Pension Reform: Equity, Poverty, and Coverage

234

(3)

Reform Priorities: A Suggested Plan of Action

237

(4)

Figure 1. Mexico's Demographic Outlook, 1990-2035

224

(1)

Figure 2. Sector Allocation of Mexican Workers

225

(11)

Figure 3. Distribution of Payroll Contributions in a Reformed Pension System

236

(5)

Growth and Competitiveness

Banking Sector

241

(24)

Financial Sector Objectives: Efficiency Accessibility, and Stability

241

(1)

The High Cost of Banking Crises

242

(1)

Mexico's Financial Sector Reform

242

(1)

Measures Adopted to Avert a Systemic Collapse of the Banking System

243

(2)

IPAB Bank Recapitalization and Resolution Programs

245

(1)

The Regulatory Reform Program

246

(1)

Pending Regulatory Issues and Continuity of Implemented Strategies

246

(1)

Pending Legal Reforms to Improve Incentives to the Financial Sector

246

(1)

Supervisory and Regulatory Arrangements

247

(1)

Financing to the Private Sector

248

(5)

Globalization and the Entry of Foreign Banks

253

(2)

IPAB's Liabilities and Funding Requirements

255

(10)

Annex I. Regulatory Reforms

261

Figure 1. Real Return on 28-Day Cetes

245

(4)

Figure 2. Stock and Flow of Commercial Bank Credit to the Private Sector

249

(1)

Figure 3. Commercial Banking System: Total Deposits

250

(1)

Figure 4. Commercial Banks: Asset Composition

251

(1)

Figure 5. Commercial Banks: Sources of Interest Income

252

(2)

Figure 6. Overhead Costs as Percent of Total Assets

254

(2)

Figure 7. FOBAPROA Notes: Debt Service Commitments

256

(1)

Figure 8. BPA Premium Costs Over 28-Day Cete Rates

257

Table 1. Sources of Financing to the Private Sector

253

(2)

Table 2. Structure of IPAB Liabilities

255

(10)

Micro, Small, and Medium-Scale Enterprises

265

(14)

Background

265

(3)

Issues

268

(1)

Possible Areas of Work

269

(10)

Government Programs that Provide Business Development Services

269

(3)

Microfinance and SME Finance

272

(3)

Monitoring and Evaluation

275

(2)

References

277

Figure 1. Export Status by Size, 1993-98

267

(12)

Housing

279

(22)

Introduction

279

(1)

Characteristics of Supply and Demand

279

(1)

Institutional and Market Structure

280

(2)

Recent Performance

282

(3)

Issues

285

(7)

Macroeconomic Instability

285

(1)

Sector Governance

286

(1)

Bias toward Finished Housing

287

(1)

Poor Performance of Public and Quasi-Public Institutions

288

(3)

Poorly Designed Subsidies

291

(1)

A New Housing Policy

292

(7)

Key Actions

292

(7)

Conclusion

299

(2)

Figure 1. Housing Finance in Mexico

281

(3)

Table 1. New Mortgage Originations and Outstanding Mortgage Debt

284

(17)

Urban Development

301

(18)

Introduction and Background

301

(1)

The Challenges in Mexico's Urban Development

301

(13)

Size Specific Challenges

311

(1)

The Institutional Context

312

(2)

Perspectives and Key Issues

314

(3)

Urban Governance and Institutional Design in Mexico

314

(1)

Enhancing Local Economic Productivity and Competitiveness

315

(1)

Cities and Poverty Reduction

316

(1)

Learning from Successes and Failures of Urban Management

317

(1)

Toward an Agenda for Urban Development in Mexico

317

(2)

Figure 1. Mexico: States Population and Crime Rates

307

Table 1. Urban-Rural Population and Crimes in Mexico, 1998

302

(1)

Table 2. Mexico's Expenditure Assignment

303

(16)

Rural Development and Agriculture

319

(28)

Recent Developments

319

(4)

Some Facts

321

(2)

Key Issues

323

(16)

Rural Poverty

323

(2)

An Unfriendly Incentive Framework

325

(2)

Poorly Functioning Markets

327

(6)

The Efficiency of Public Goods

333

(4)

The ``Institutionality'' of Rural Development

337

(2)

Options for the Future

339

(8)

Figure 1. Growth Rates

322

(10)

Figure 2. Age Pyramids

332

Table 1. Real Producer Prices for Key Crops

325

(1)

Table 2. Nominal Protection Rates

326

(21)

Federal Transport

347

(10)

Overview

347

(1)

Background

348

(1)

Issues

348

(3)

The Non-Tolled Federal System .

349

(1)

Urban Transport

350

(1)

Institutional Setting

350

(1)

Policy Options

351

(6)

Rationalizing The Toll Road System

351

(1)

Ensuring the Preservation and Modernization of the Non-Tolled Road Network

352

(1)

Establish Institutions that Reflect the New Characteristics of the Sector

353

(1)

Improve the Efficiency and Efficacy of Urban Transport

354

(3)

Energy

357

(20)

Overview

357

(1)

Current Situation

358

(1)

Recent Performance

359

(3)

Energy and the Economy

360

(2)

Energy Demand Projections and Supply Requirements

362

(3)

Oil and Oil-Based Products

362

(1)

Natural Gas

363

(1)

Electricity

364

(1)

Challenges Facing the Sector

365

(1)

Policy Priorities and Options

366

(11)

Meeting Investment Needs through Increased Private Sector Participation

366

(3)

Deepening Reforms in the Oil and Gas Sectors

369

(4)

Deepening Reforms in the Power Sector

373

Table 1. Index of Energy Consumption Per Capita in 1997

360

(1)

Table 2. Reserves and Production of Certain Oil Producers

360

(2)

Table 3. Oil Supply/Demand Balance for 1990-98

362

(15)

Regulatory Environment for Private Sector Participation in Infrastructure

377

(32)

Overview

377

(1)

Telecommunications

378

(5)

Background and Diagnostic

378

(2)

Institutional and Regulatory Framework

380

(2)

Recommendations

382

(1)

Natural Gas

383

(5)

Background and Diagnostic

383

(1)

Institutional and Regulatory Framework

384

(3)

Recommendations

387

(1)

Urban Water and Sanitation

388

(6)

Background and Diagnostic

388

(1)

Institutional and Regulatory Framework

389

(2)

Recommendations

391

(3)

Transport

394

(15)

Background, Institutional, and Regulatory Framework

394

(1)

Roads

394

(2)

Airports and Airlines

396

(2)

Ports

398

(2)

Railways

400

(2)

Multimodality and Logistics

402

(1)

Recommendations

403

Table 1. Modal Distribution of Transport Services for Mexico's International Trade

402

(7)

Poverty and Inequality

Reform of the Mexican Healthcare System

409

(38)

Introduction

409

(1)

Background and Issues

410

(15)

Sector Overview

410

(2)

Organization of Healthcare

412

(5)

Pending Issues

417

(8)

Health System Reforms to Date

425

(3)

Reforms in SSA

425

(2)

IMSS Reform

427

(1)

Improved Coordination of the Sector

428

(1)

Modernizing Healthcare Regulation

428

(1)

Setting the Framework for Reform: Lessons from Abroad

428

(4)

Financing Options

428

(2)

A Converging Framework for Health System Organization

430

(2)

Policy Recommendations

432

(13)

Elements of a Reformed System

432

(2)

Strategic Choices and the Pace of Reform

434

(2)

Short-Term Actions for Health Sector Reform

436

(8)

Medium- to Long-Term Policy Options

444

(1)

Conclusions

445

(2)

References

446

Box 1. Reducing Duplication of Services: Reforms and Innovations in Coahuila

418

Figure 1. Overview of the Mexican Healthcare System-The Theory

413

(1)

Figure 2. Schematic View of the Overlapping Functions in the System-The Practice

414

(1)

Figure 3. Total Health Expenditure 1998, as percent GDP

415

(1)

Figure 4. Sources of Care

416

(19)

Figure 5. The Reformed System of purchasing and Provision

435

(12)

Education Sector Strategy

447

(32)

Background

447

(4)

Issues

451

(11)

Coverage

451

(2)

Internal Efficiency Indicators

453

(1)

Low Levels of Learning Achievement in Education

453

(2)

Why Low Quality?

455

(3)

Financial Resources

458

(2)

Institutional Issues

460

(2)

Government Strategy

462

(7)

Lessons Learned

464

(1)

Opportunities for Improvements

465

(4)

Options for the Future

469

(2)

Basic Strategies

469

(1)

Two Strategic Pathways to Educational Improvements

470

(1)

An Action Plan

471

(8)

Box 1. The Telesecundaria Program

463

Figure 1. Cross-Country Relation between Education Attainment and GDP

448

(2)

Figure 2. Education Spending per Student

450

(1)

Figure 3. Distribution of Education Expenditure by Source

450

(9)

Figure 4. Cumulative Distribution of Total Education Expenditures, 1996 National

459

(1)

Figure 5. Cumulative Distribution of Federal Education Expenditures, 1996 National

459

Table 1. Percent of Children Attending School

449

(1)

Table 2. Average Years of Schooling

449

(5)

Table 3. Test Scores by Type of Primary School; Means and (Standard Deviations)

454

(18)

Table 4. An Action Plan Matrix

472

(4)

Table A.1. Total and Public Enrollment by Poverty Level, Gender, and Education Level (Percent)

476

(1)

Table A.2. Total and Public Enrollment by Poverty Level, Location, and Education Level (Percent)

477

(1)

Table A.3. Total and Public Enrollment by Poverty Level, Region, and Education Level (Percent)

478

(1)

Table A.4. Explaining the Probability of Being a Poor Household Head: Logit Model

478

(1)

Social Protection

479

(58)

Introduction-Managing Social Risk in Mexico

479

(3)

Identification and Characteristics of Mexico's Key At-Risk Groups

482

(4)

Mexico's Social Protection Strategy

486

(17)

Social Insurance

490

(1)

Social Assistance

491

(2)

Social Protection in Mexico: Issues, Options and Costs

493

(10)

Looking Ahead: Enhancing Social Protection Policy in Mexico

503

(8)

Costs and Trade-offs

503

(1)

Defining Priorities

503

(3)

Design, Institutional, and Implementation Issues

506

(1)

Other Emerging Issues-Next Analytical Steps

507

(1)

Bibliography

508

(1)

Annex I - Table 1. Mexico: Estimated Population by Age Group and Geographic Area, 2000

509

(1)

Annex II - SP Programs in Mexico: Design, Coverage and Budget Data

509

(This 50 page annex is not included as an attachment to this document, but is available upon request from the chapter's author.)

Table 1. Managing Social Risk in Mexico: Main Risk Indicators, Size of At-Risk Groups, and Best Practice Policy Responses

480

(3)

Table 2a. Mexico: Leading Indicators of Social Risk by Age, Region, and Income Group, 1996

483

(2)

Table 26. Mexico: Leading Indicators of Social Risk, Specific Population Groups

485

(2)

Table 3. Coverage and Incidence of Social Programs Targeted to Key Social Risks, by Region and Income Decile Groups, Mexico, 1996

487

(2)

Table 4. Federal Social Protection Programs in Mexico

489

(5)

Table 5. SP Strategy & Major Social Risks: Seven Key Problems and Best Practice Options

494

(10)

Table 6. Cost of Implementing SP Initiatives in Seven Major Categories of Risk

504

(7)

Labor Markets

Context for Reform

511

(2)

Policy Issues and Options

513

(24)

The System of Benefits Provision is Costly, Distorts Labor Allocation, Diminishes Competitiveness, and Poorly Serves Workers

513

(2)

Large Mandated Severance Payments Reduce Labor Mobility, Impair Resource Reallocation, Increase Labor Costs, and Discourage Job Creation

515

(5)

Insufficient Human Capital Accumulation

520

(3)

The Industrial Relations and Collective Bargaining Framework Needs to Be Reviewed and Modernized

523

(3)

The Urban Informal Sector Needs Policies to Stimulate Growth and Encourage Formalization

526

(3)

Annex I - The Mexican System of Employment Protection

529

(2)

Annex II - Recent Labor Market Reforms in Spain

531

(2)

Annex III - The Minimum Wage

533

Box 1. A Possible Unemployment Insurance Program for Mexico

519

Figure 1. Mexico: Labor Market Flexibility

512

(11)

Figure 2. Conditional Median Real Hourly Earnings

523

(11)

Annex Figure 1. Minimum Wage/Mean Wage in OECD Countries and Latin America .

534

(1)

Annex Figure 2a. Formal and Informal Worker

535

(1)

Annex Figure 2b. Cumulative Distribution of Wages from Formal and Informal Worker

535

Table 1. Tax Wedge on Payroll

513

(8)

Table 2. Marginal Value of Education by Level

521

(16)

Indigenous Peoples and Poverty

537

(16)

Current Developments

537

(8)

Demography

537

(1)

Poverty Rates

538

(1)

Migration

539

(1)

The Rural Economy

539

(1)

Indigenous Peoples and Biodiversity

540

(1)

Indigenous Rural Identity

541

(1)

Communal Systems of Governance

541

(1)

Transition

542

(1)

Creating Political Space

543

(1)

Indigenous Life in Urban Settings

543

(1)

Educational and Health Indicators

544

(1)

Issues for Indigenous Development

545

(5)

Problems

545

(1)

Indigenous Governance and Organizational Capacity

545

(1)

Lack of ``Fit'' of Poverty Programs with Indigenous Interests and Needs

546

(2)

Multiethnic Society and an Institutional Framework

548

(1)

Health and Education Services

549

(1)

Migrant, Urban, and Indigenous Groups in Arid Lands

550

(1)

Options For The Future

550

(3)

The Economics of Gender in Mexico: Work, Family State, and Market

553

(16)

Introduction

553

(12)

Gender Demographic and Economic Indicators for Mexico

555

(1)

Gender Differences in Educational Attainment and Achievement

555

(2)

The Gender Differentiated Impact of Child Labor and School Dropout on Returns to Human Capital

557

(1)

Gender Issues in Workforce Participation and Self-Employment

558

(1)

Household Effects on Labor Force Participation

559

(1)

The Maquiladora Sector

560

(1)

Gender Differentials in Microenterprise Earnings

561

(1)

Gender, Generation, and Off Farm Employment on the Mexican Ejido

562

(1)

The Welfare of Male and Female Elderly

563

(2)

Conclusions

565

(1)

Policy Recommendations

566

(3)

References

568

(1)

Government Programs and Poverty

569

(50)

Introduction and Overview: Ten Strategic Questions

569

(1)

Key Findings

569

(7)

Broad-Based Public Expenditures and Poverty

576

(9)

Access of the Poor to Broad-Based Social Public Expenditures Remains Limited

576

(5)

Not All Agricultural Programs Benefit the Rural Poor in the Same Way

581

(4)

Investments in the Human Capital of the Poor

585

(13)

PROGRESA

586

(4)

Food Programs

590

(6)

Compensatory Education

596

(2)

Income Opportunities for the Poor

598

(9)

Programs de Empleo Temporal

598

(5)

Other Employment Programs for the Poor

603

(1)

Training Programs

604

(3)

Investments in the Physical Capital of Poor Areas

607

(9)

Inadequate Access to Basic Social Infrastructure

609

(3)

Good Institutions and Management are Needed for Decentralization to Be Pro-poor

612

(4)

Conclusion

616

(3)

Box 1. A Simple Framework for Measuring the Cost-Effectiveness of Public Works

601

Figure 1. Broad-based and Targeted Policies

570

(1)

Figure 2. Targeted Policies by Group

570

(1)

Figure 3. Resources Channeled by Poverty Alleviation Programs

571

(1)

Figure 4. Government Spending for Poverty Alleviation

571

(6)

Figure 5. Concentration Curves for Enrollment by Education Level, 1996, Public Schools

577

(2)

Figure 6. Distribution of Income, Training Courses, and Hours of Training

579

(7)

Figure 7. Spending for Human Capital, 1998-2000

586

(3)

Figure 8. Monthly Cash Transfers from PROGRESA

589

(4)

Figure 9. Coverage and Type of School Breakfast

593

(3)

Figure 10. Compensatory Education Programs

596

(3)

Figure 11. Government Spending for Income Employment, 2000 Pesos

599

(9)

Figure 12. Expenditure in Physical Capital in Poor Areas, 1998 and 1999

608

(7)

Figure 13. FAIS Allocations in 2000

615

Table 1. Coverage of Food Subsidies, 1998

591

(4)

Table 2. Targeting Performance of Food Programs

595

(5)

Table 3. Characteristics of PET Participants

600

(6)

Table 4. Modalities of PROBECAT's Main Training Modules

606

(4)

Table 5. Lack of Access to Public Services (Percent)

610

(1)

Table 6. Lack of Access to Programs (Percent)

610

(4)

Table 7. Allocation Rules for the Main Social Spending Funds in Ramo 33

614

(5)

A Sustainable Future

Water

619

(26)

Current Situation: A Changing World

619

(3)

Background

619

(3)

The Issues: What Are the Challenges for the Future?

622

(10)

The Good News: Results Achieved

623

(2)

The Bad News: Gaps and New Challenges

625

(7)

Future Development: Policy Options and Recommendations

632

(8)

Water Resources Management

632

(2)

Irrigation

634

(1)

Water Supply and Sanitation

635

(3)

Drought and Flood Management

638

(1)

Institutions and Organizations: The Role of CNA

638

(2)

Summary

640

(5)

Figure 1. Economic Activity and Water Availability

620

(1)

Figure 2. Regional Water Availability and Withdrawals

621

(1)

Figure 3. Overexploited Aquifers in Mexico and Relationship with Precipitation .

622

(1)

Figure 4. Major Groundwater Uses

623

(18)

Table 1. Summary of Issues

641

(4)

Biodiversity

645

(24)

Summary

645

(1)

Current Developments

646

(6)

Facts and Figures

646

(1)

Value of Biodiversity

647

(1)

Pressures on Biodiversity

648

(1)

Institutional and Policy Responses

649

(3)

Issues

652

(7)

Conceptual Issues

655

(4)

Strategic Options for the Future

659

(10)

A Typology of policy Options

659

(6)

Cross-Cutting Issues

665

(1)

References

666

Box 1. Conceptual Framework for Biodiversity Management

656

Table 1. Vegetation Types

646

(5)

Table 2. Vegetation Areas Under Management: Current Levels and Policy Objectives

651

(2)

Table 3. Budgets of Selected Biodiversity-Related SEMARNAP Programs and of Other Sectors

653

(8)

Table 4 A Framework for Biodiversity Policy Analysis

661

Figure 1. Population Growth, Forest Cover, and Incidence of Rural Poverty

655

(14)

Forestry and Land Management

669

(14)

Current Developments

669

(6)

Continued Resource Degradation Despite Reforms

669

(1)

Growing Recognition of the Multiple Social Values of Forests

670

(1)

The Promise of Forestry-Based Community Development and Natural Forest Management

671

(1)

The Emerging Need for Commercial Plantations

672

(1)

Government Interventions in Land Management

673

(1)

Government Interventions in the Forestry Sector

674

(1)

Issues for Sustainable Land and Forest Management

675

(3)

Options for the Future

678

(5)

Policy Enhancements and Areas for Government Focus

679

(4)

Natural Disaster Management

683

(8)

Background

683

(3)

Natural Disaster Experience

683

(1)

Impact of Disasters on Country's Economy and Development Programs

683

(2)

Impact of Natural Disasters on the Poor

685

(1)

Government Approach to Date

685

(1)

Main Sector Issues

686

(2)

Institutional Coordination

686

(1)

Prevention

687

(1)

Post-Disaster Financing

687

(1)

Options for the Future

688

(3)

Institutional Coordination

688

(1)

Prevention

688

(1)

Post-Disaster Financing

689

Table 1. Natural Disasters, Deaths, and Economic Losses in Mexico, 1980-98

684

(7)

Air Quality

691

(10)

Background

691

(2)

Issues

693

(2)

Large and Unsustainable Impact on Health

693

(1)

Weak Institutional Framework for Air Quality Management

694

(1)

Indoor pollution

694

(1)

Weak (or Lack of) Internalization of Environmental and Health Costs in Policy Making

694

(1)

Limited Citizen Participation

694

(1)

Barriers to Gains in Energy Efficiency and the Promotion of Renewable Energy Resources

695

(1)

Barriers to Promotion of Cleaner Vehicles and Fuels

695

(1)

Weak Incentives for Private Sector Participation

695

(1)

Strategic Options and Policy Objectives

695

(6)

Solid Waste Management

701

(8)

Background

701

(1)

Major Issues

702

(1)

Strategic Options

703

(6)

Strengthening of Regulations and Institutions at the Federal and Local Level

703

(1)

Extending the Provision of Services to Medium- and Small-Size Localities

704

(1)

Reduction in Waste Generation (At-Source Reduction and Promotion of Recycling

705

(1)

Addressing Social Issues (Pepenadores) Through Involvement in Transfer Stations and Recycling Centers

705

(1)

Harmonizing Efforts Seeking Solid Waste Management Improvements with Climate Change Concerns

705

(1)

Specific Actions

706

(3)

Accountability and the Demand for Quality Government

Decentralization

709

(12)

Mexico's Decentralization in International Perspective

709

(2)

Pending Policy Issues

711

(6)

Spending

711

(1)

Taxes

712

(1)

Transfers

713

(1)

Debt and Borrowing

714

(1)

Institution Building

715

(2)

Policy Options

717

(4)

Continuing Current Reforms

718

(1)

Reforming the Pacto Fiscal

718

(1)

Rationalizing Sectoral Decentralization

719

(1)

State-Level Reforms

719

Table 1. Fiscal Magnitudes: Federal and State Governments, 1997

710

(11)

Governance

721

(12)

The Components of Governance

721

(1)

Governance in Mexico: Progress Made

722

(1)

Corruption: Some Observations

722

(1)

Transparency International's Index

722

(1)

Evidence from National Surveys

722

(1)

Recent Developments

723

(8)

Anti-Corruption Effors in Mexico: Focus on SECODAM

723

(2)

Toward a More Comprehensive Anticorruption Agenda in Mexico

725

(6)

Conclusion

731

(2)

Legal and Judicial Institutions

733

(14)

Background

733

(1)

Organization and Operations of the Legal-Judicial System

734

(6)

Intersystem Relationships

735

(1)

Federal Judiciary

736

(1)

State Judiciaries

737

(2)

Overview of Other Legal Framework and Ancillary Institutions

739

(1)

Issues

740

(4)

Better Information to Support Reform Planning

741

(1)

Monitoring and Evaluating Results

742

(1)

Getting the Right Mix of Reform and Modernization

742

(1)

Ways to Address Extrasectoral Impacts of Reform

743

(1)

Policy Options

744

(3)

Entry Point

744

(1)

Scope of Change Attempted

745

(1)

Type of Horizontal and Vertical Coordination

746

(1)

References

747

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Mexico : A Comprehensive Development Agenda for the New Era

Summary

Table of Contents

Supplemental Materials