Evaluation of the Fund of Contributions for the Basic Education

Abstract

This paper describes how education expenditure is allocated to local states through a federal transfer called faeb (Fondo de Aportaciones de Educación Básica) Basic Education Contribution Fund, it also analyzes how the 2007 Fiscal Reform affected the distribution of these financial resources between local states.

This document tackles one the most important topics in public finance: the allocation of basic education expenditure, which is the item with more financial resources on Mexico’s federal budget but at the same time one of the least efficient in terms of results.

The evidence drawn from this paper shows that new distribution criteria on education expenditure tend to increase financing inequalities among federal states