The effect of the financial discipline law over the growth of the public debt of the federal entities of Mexico

Abstract

The public debt of the federal entities of Mexico grew from 2005 to 2015 by 264%, this significant growth led to the 2016 reform where the law of financial discipline of the federal entities and municipalities is created in order to control the excessive growth of the public debt of the federal entities. This study seeks quantitative evidence that the implementation of the financial discipline law in Mexico has had an impact on a lower growth of the public debt of the federal entities of Mexico. Using the Wilcoxon test, significant evidence was found that the growth of the public debt of the federal entities decreased after the implementation of the financial discipline law.