THE RESTORATION OF PUBLIC SECTOR OF MEXICO THROUGH THE FISCAL POLICY AND THE CONTEMPORARY ECONOMY

• Published in: Journal of economic and social development (Varaždin) Vol. 1; no. 2; p. 68
• Main Authors: Mejía, Patricia Carmina Inzunza, Díaz, Armando Javier Sánchez
• Format: Journal Article
• Language: English
• Published: Varazdin Varazdin Development and Entrepreneurship Agency (VADEA) 15.06.2014; VADEA d.o.o
• Subjects: ability to pay; contemporary economy; Economic growth; Economic models; Fiscal policy; Public sector; revenue capacity; Tax exemptions; Tax rates; Mexico
• ISSN: 1849-6628; 1849-3327

In Mexico, since the early 80's, neoliberal economic policies are aimed at economic liberalization and fiscal discipline. Since then it has prioritized macroeconomic stability at the expense of public finance constraints and increased productive investment that prevent sustained economic growth of the country. In this context, the Mexican government continues to express that the economy is controlled by the market, however, in reality is necessary the intervention of State and the implementation of fiscal policies progresive, allowing restructure the public sector to better allocation and distribution application of economic resources. The aim is to show the impact of fiscal policy on economic growth from an endogenous perspective that allows the wedges visible by the repeated use of economic policies go against the development of production and economic welfare of the majority of Mexicans. To support the theoretical method, we analyze the main contributions of the scientific literature on the economic and fiscal, contrasting with statistical evidence to identify the ravages of contemporary economy and globalization, what reveal the lack of resources to encourage the public sector Mexico and limited ability to pay tax to economic development, limiting government revenue capacity, hence, arise a better implementation of productive public spending and increased state intervention in the economy, as a means to restructure the public sector and generate productive optimal conditions to ensure productive development and the financial solvency of Mexico. This could be achieved through fiscal policy with more levying higher revenues and the implementation of progressive spending to encourage investment in industrial infrastructure, productive development and social spending.