Decentralization and Democracy in Latin America (review)

This edited volume brings together some of the finest works on decentralization in Latin America produced in the U.S. in recent years. In the introductory chapter, the editors conceptualize decentralization as a multidimensional process, composed by political, fiscal, and policy reforms, which may or may not occur simultaneously. They assess the extent to which decentralization in Latin America has been the result of international forces, democratization processes, sociostructural changes, electoral incentives, or neoliberal reforms. None of these five theories about the causes of decentralization, they argue, are suitable to explain decentralization in Latin America. They conclude that the most promising theoretical approach to the study decentralization lies in the combination of micro-level factors, such as institutional and electoral incentives, with macro-level factors, such as demographic changes. They appropriately call for a dynamic approach to the study of change in intergovernmental relations and plead for a focus on the political determinants of decentralization.

In a coherent manner, the empirical chapters test the theories and carry out some of the research tasks laid in the Introduction. Kathleen O'Neill proposes an electoral theory to account for political and fiscal decentralization in Bolivia after 1994. Similarly, Michael Penfold-Becerra incorporates politicians' career incentives to explain decentralization in Venezuela. He also emphasizes the importance of the legitimacy crisis of the traditional political parties and the bottom-up pressures in the initial move toward political decentralization in 1989. In a cross-sectional analysis of subnational states' revenues and expenditures in Mexico, Caroline Beer finds partial support for the neoliberal hypothesis. David Samuels explains decentralization toward the municipal level in Brazil on the bases of sociostructural changes—namely the rapid growth of urban populations since the 1970s. In a diachronic comparative analysis of two federal (Argentina and Brazil) and two unitary (Chile and Uruguay) countries, Kent Eaton tests the relationship between the democratic election of subnational officials and the level of fiscal decentralization. Gary Bland also studies the link between democratization and decentralization in post-authoritarian Chile. The last two chapters focus more explicitly on the consequences of decentralization. Erik Wibbels analyzes the consequences of fiscal decentralization on market-reforms and macro-economic stability in Argentina. Finally, Stephan Haggard and Steven Webb conclude the volume with a study of the political determinants of fiscal institutional arrangements, such as the allocation of taxing powers, the design of intergovernmental fiscal transfers, the assignment of spending responsibilities, and the capacity of subnational governments to contract debt (Argentina, Brazil, and Mexico).

The book is sound, both theoretically and empirically, and the different chapters nicely complement each other. I have two caveats, nonetheless. First, the definition of political decentralization as the direct election of state and/or local level political officials leaves out other important political decentralizing reforms such as the granting of constitutional autonomy to municipalities (which was incorporated in the most recent constitutional reforms of Brazil, Colombia, and Bolivia) or the creation of new spaces for the representation of subnational polities (such as the creation of legislative assemblies in the cities of Mexico and Buenos Aires). These and other reforms that devolve political autonomy to the subnational levels of government should be incorporated in the political dimension of decentralization. Second, the period of analysis is under-specified. Without further justification, it results inappropriate to equate recent reforms to popularly elect governors and mayors, with the intergovernmental institutional arrangements that resulted from nineteenth-century constitutions. Even if both sets of measures led to the popular election of subnational officials, they could hardly be conceptualized as part of the same type of processes. In other words, when evaluating the strengths or shortcomings of alternative theories about the causes and consequences of decentralization, equivalent decentralization processes across cases should be compared. Interestingly, virtually all the chapters focus on the process of decentralization in the last twenty to thirty years. Such coincidence should have received greater attention in the...