- Decentralization and its Discontents
For years, great ideas have promised to solve the problems of Latin America. To a Latin Americanist such as I, who has been studying the region for a very long time, it appears that each decade or era has produced a great idea to pull Latin America out of underdevelopment and into the so-called developed world. In the late nineteenth and early twentieth centuries, there was export-led development. Then, in response to the Great Depression and the dislocations of World War II, there was import substitution industrialization. After the war, there was modernization theory and, for the first time, a rival great idea—dependency theory— which promoted state-centered development. These theories were followed by a push for regional integration and a period of military authoritarianism focused on internal security rather than development. Then, toward the end of the Cold War, most of Latin America rejected authoritarianism in favor of democracy, a transition accompanied by a rush to neoliberal economic reforms. This combination of democratic governance and opening local markets to the world was supposed to solve Latin America’s problems.
In the 1990s, with democratic governments in virtually all countries of Latin America and macroeconomic stability the norm, expectations for the region were higher than at any time in a generation, yet this magical combination also disappointed. So the focus shifted to how to make democracy better. There were second-generation reforms of political parties, institutions, and the rule of law. Then, civil society became the flavor of the month. On the economic side, there was some concern for the financial shocks suffered in the region and the pain that these undeniably caused to society. The total collapse of the state and economy in Argentina in 2001 was only the most extreme example of how far short the region still fell from solving its problems.
For the past few years, the great idea has been decentralization. Led by academics and specialists in development, decentralization has gathered adherents throughout the region and in multilateral agencies and the national aid agencies of developed countries. This lemminglike trend is particularly evident in the World Bank, the Inter-American Development Bank, and the US Agency for International Development, which, with their enormous resources and huge cadres of specialists, churned out reports, studies, and advice trumpeting the virtues of decentralization. More to the point, these agencies gave financial support to the great idea.
In what seemed to many observers a fortuitous juxtaposition, discussions of democratic governance and of neoliberal economic reforms came together to support the decentralization of authority...