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A Boost for Both Transparency and Taxes in Mexico?

BY Rebecca Chao | Wednesday, January 8 2014

There may be more pesos for the municipality of Tlajomulco de Zúñiga this year (Credit: Scott Robinson/flickr)

While the Mexican municipality of Tlajomulco de Zúñiga sits in the center of the country, its name translates as “Land in the Corner” in the Aztec language, Nahuatl. The title is perhaps more fitting now. Once one of the country’s most corrupt municipalities, it now occupies a special corner of Mexico as its least corrupt, jumping from a 34.2 in 2009 to a full score of 100 in 2013 as ranked by the transparency organization CIMTRA. Mayor Ismael del Toro and his predecessor Enrique Alfaro are in part responsible for pushing forward a number of innovative policies that include a four-year-old participatory budgeting project, which allow citizens to vote annually on how their taxes should be spent.

"The most important thing is that you win the trust of the public," del Toro told Al Jazeera. “This brings other benefits, like the payment of taxes, which has risen by 30 percent each year because people are beginning to trust the government.” As techPresident recently covered, a participatory budgeting project in the Democratic Republic of Congo also led to significantly increased tax revenue, though as with Tlajomulco de Zúñiga, the impressive increase is also a result of starting from nearly zero. Fifty-percent of the labor force in Mexico works in the informal economy and as a result, Mexico has the lowest level of tax revenue among the OECD countries.

The municipal government claims that the increased tax revenue has led to more generous social programs, such as the distribution of free school supplies. The school supplies project has been so successful, Mayor del Toro says that it is being replicated in every municipality in the Jalisco State, even if Tlajomulco de Zúñiga’s participatory budgeting project has not been adopted elsewhere in Jalisco. Mexico City, however, was the first to launch a participatory budgeting project in 2009.

The budgeting project is not without its detractors, however. Aside from a general mistrust of government, some argue that the metrics used by CIMTRA are easy to achieve. Hector Garcia Navarro, posting in the online comment section for Al Jazeera’s story on Tlajomulco de Zúñiga’s participatory budgeting project, wrote, “It is not difficult to win the 100 percent average at transparency according to the civil association CIMTRA because it is just a matter of accomplishing a list of requirements related to public information. Once, a local President accomplishes them, the 100 average is ready. Any municipality can reach such average.” He argues that other civil society organizations, like IMCO, are more stringent with their rankings of transparency, though IMCO looks specifically at budget transparency rather than transparency as a whole as with CIMTRA. IMCO only gave Tlajomulco de Zúñiga a score of 23 in 2013. While a score was unavailable in 2009, the evaluation results did show that the municipal government has made improvements over the last four years in checking off more of IMCO's criteria.

Navarro also argued that the methods used to evaluate tax increases cannot be solely attributed to an increase in government trust; a population increase and rising tax rates are more likely the causes of increased tax revenue. On the participatory budgeting project itself, Navarro had this to say: “It is wrong to say that people chooses the works that will be done by the administration because the decision of the people apply only for the 15% of the budget, not for the whole of the budget. Thus, the participatory budget is just an opinion of the people, not a decision.”

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