Abstract:
Using Mexico City as a case study, this paper examines the unique problems and constraints that contribute to urban fiscal and political crisis in cities in developing countries. The recent international debt crisis and Mexico’s history of dependent development accelerated the fiscal insolvency of Mexico City and limited local capacity to generate new or alternative revenue sources. Metropolitan authorities have limited maneuvering room to address this problem due to limited revenues and to growing urban austerity protests. The paper explores contradictory relationships between urban fiscal and political crisis and links them on the local urban level to the national and international context of dependent development. The paper concludes that urban political reform emerges in the constrained policy space where authorities can agree about Mexico City’s future and legitimize their rule at the same time.