In Mexico, the context at the national level is marked by complex challenges that will hardly find a solution in the short term, such as the commercial pressures of the United States, migratory conflicts and violence in much of the national territory. Many indicators reveal that the distances and differences between the states of the country are increasing and complex and in that sense speaking of a single Mexico is possibly an euphemism at this point. Therefore, it is essential today to recognize the importance of subnational governments, that is, state and municipal, in the resolution of local problems that affect the daily lives of people and that can define the physiognomy that the country adopts in the future.
For example, according to the National Urban Security Survey (Ensu) of 2025, 99% of the 18 -year -old population identified some basic problem in their city. The potholes in streets and avenues were the most mentioned problem at the national level, with 81% of the answers, followed by failures and leaks in the drinking water supply (62%). Other latent problems at the local level were the insufficient public lighting (57%), frequent bottles (53%), the castings covered by waste accumulation (50%), the deficiencies of the public transport service (42%), the carelessness of parks and gardens (41%), the deficiencies in the public drainage network (40%), among others.
The proximity of subnational governments with the territory and the population gives them a strategic advantage to design and implement concrete solutions to local demands, such as the repair of roads, the modernization of the lighting or the expansion of the drainage networks. This proximity can facilitate the creation of more innovative models for the provision of public services, knowing more precisely the needs and priorities of the population, as well as the social, economic and environmental complexities of each locality.
Thus, local governments are well positioned to implement effective solutions adapted to the particularities of their community, something that, due to their nature, structure and scope, the federal government can hardly do so directly or efficiently. For example, the lack of coverage or low quality of some basic services are issues that still prevail in many parts of the country, and that, although they can have a national component, their solution depends largely on the decisions and actions taken by local governments.
The management of local governments, therefore, directly impacts people’s daily lives. Municipalities, for example, have the responsibility of offering essential goods and services, such as water, sanitation, lighting, streets, parks, gardens, cleaning and transit. A good or poor management of these services has an immediate impact on the quality of life of the population. As a mayor of Rio de Janeiro pointed out, “… the mayors have the political position to really change people’s lives, since they can solve everyday problems directly, not figured.” The same can be said of state governments.
In addition, local governments can conduct themselves with greater pragmatism to respond to the needs of their communities without distracting themselves in such polarized debates as those that have distorted politics nationwide. That is, they can focus on designing and implementing practical actions to meet local demands without wasting time on ideological issues that hinder the search for viable solutions. Or as some successful local politicians in the world have affirmed, “there is no left or right -wing manner to collect the garbage, repair a road or fix a pipe, you just have to do it and you have to do it well.”
It is true that many argue that subnational governments lack sufficient resources to meet the needs of their communities. However, it is also true that the financial autonomy of states and municipalities is very limited, and most depend largely on federal government transfers. Therefore, and since the Federation does not have or will have additional resources in the short term, local governments must be more proactive, creative and innovative to mobilize own resources and increase their investment capacity.
According to IMCO, in 2023, only 16% of the income of the governments of the 32 federative entities were generated by the entities themselves through taxes, rights, products, uses, sales of goods and services, among others. 81% came from transfers of the federal government. Moreover, between 2015 and 2023, tax autonomy decreased in 10 states, being Guanajuato, Mexico City and Aguascalientes that experienced the greatest drop in their own income.
In addition, as the same organization points out, “the limited fiscal autonomy and dependence on state governments towards the resources from the Federation is not only due to its limited tax powers. In 2023, only 16 entities charged the state tax for possession or use of vehicles, and only 15 did it with the tax on the final sale of alcoholic beverages.”
At the municipal level, the situation is similar. In 2020, 74% of municipal income came from transfers from the federal government and state governments, according to IMCO. Only one in five pesos of municipal income came from their own sources. In addition, the property tax, the main source of income of the municipalities, is collected below its potential. Less than 1% of the country’s municipalities contribute 50% of the total national collection of the property. And, as the OECD points out, in Mexico, the property of the property represents only 0.3% of GDP, while the average in OECD countries is 1.9%. This limits the ability of municipalities to provide fundamental public services.
In that context, in Mexico it is urgent to put more emphasis on the performance of local governments and promote their ability to solve problems that will hardly be solved from the national level. Faced with the multiple problems faced by the federal government, subnational governments have the opportunity to effectively lead the administration of their regions, in due course local challenges. But to take their advantages to solve problems directly, it is necessary that local governments have the necessary preparation, experience and capacity to structure and implement responsible, professional, sophisticated and innovative government programs. Something that, except exceptions, does not abound today.
