Mexico has been a federal country since 1824. States and municipalities have been constitutionally recognized as integral parts of the federal union throughout. Even though they receive a high share of their budget from federal transfers, states (90% of budget comes from federal transfers) and municipalities (between 30% and 70% of revenues come from the federal government) have extensive spending and administrative autonomy. Some functions are concurrent among two or more levels of government, such as education, as the federal government and states are, at the same time, in charge of providing infrastructure and services, or public security, where the three levels of government are involved in different capacities. Compared to other large federal countries, the role of local governments in Mexico is relatively limited.
Subnational governance structure
The federal constitution provides the basis for Mexico’s intergovernmental structure at the state and local levels. Mexico is divided in 32 states and 2,468 municipalities. All states and municipalities have the same functions and responsibilities irrespective of their level of development. Municipalities are separate entities from states, though they can be audited by the states’ audit offices.
Nature of subnational governance institutions
Both states and municipalities are devolved subnational government institutions with extensive powers and functions. States replicate the federal structure of an executive, legislative, and judiciary powers. Governors and state legislators are elected directly every 6 and 3 years, respectively. Municipalities have a local council presided by a mayor. They are highly autonomous. In most states, municipalities need to submit their revenue budget for review by the state congress. In a few cases, when municipal budgets fail to meet legal requirements (e.g., regarding municipal taxation), state governments may return the budget back to the municipalities for re-submission.
Assignment of functions and responsibilities in Mexico is complicated. States are a residual level of government with few responsibilities defined at the constitutional level. In practice, though, states have concurrent or shared responsibilities along the entire spectrum of government functions. The three main functions of states are education, health, and public security. States build, maintain, and operate schools and hospitals, and so does the federal government. As for public security, the three levels of government are involved, with municipalities technically in charge of maintaining public order, states in charge of mid-level crimes, and the federal government in charge of organized crime and road security. In reality, the overlap of functions on the ground is problematic. Municipalities are in charge of urban planning and infrastructure, including public lighting and water and sanitation. Given the growth of urban areas, states are increasingly involved in urban planning. In some states, municipalities have ceded the water and sanitation function to states. The national electric utility provides, de facto, the public lighting service with municipalities paying back and/or houses being charged in their monthly electricity bills. A few municipalities directly build, manage, operate and maintain hospitals.
Outlook of Fiscal Relations between Levels of Government in Latin America and the Caribbean (Panorama de las relaciones fiscales entre niveles de gobierno en países de América Latina y el Caribe), IADB/CEPAL
Mexico Country Profile (World Observatory on Subnational Governance and Investment, OECD/UCLG)
Local government country profile: Mexico (UN Women)
Last updated: December 1, 2023