This report assesses the current situation of the fiscal decentralization process in Mexico. The report focuses on the analysis of the nation¹s revenue sharing system in light of the current limitation of Mexican states to generate an internal tax base. The composition of the Mexican political system and the current system of intergovernmental revenue distribution determined the framework for this research. Four states, Baja California, Nuevo León, Aguascalientes and San Luis Potosí, were chosen as case studies to facilitate the analysis of the situation. The relevant information for this study came from the open literature, governmental reports and interviews with different officials of the state governments in the aforementioned mentioned states.
