Studies of fiscal decentralization have largely centered on the formal tiers of government, without looking at the effects of this process on the recipient jurisdictions in metropolitan areas. This is an important omission, considering that more than 50 percent of the worlds population lives in urban areas that often extend beyond formal jurisdictional boundaries. As a response, this study explores the impacts of fiscal decentralization in metropolitan areas. It does so by testing the hypothesis that the policies of fiscal decentralization in Mexico have exacerbated the level of fiscal...