The Unraveling of Representative Democracy in Venezuela

9 Decentralization: Key to Understanding a Changing Nation

c h a p t e r n i n e Decentralization Key to Understanding a Changing Nation Rafael de la Cruz Many Latin American countries have moved along the path of decentralization, a type of state design which normally strengthens and expands democratic institutions. Until recently Venezuela, Colombia, Chile, Argentina, Brazil, and Mexico had moved farthest in this direction. Now e√orts at decentralization in other countries, such as Guatemala, Honduras, Nicaragua, Costa Rica, Peru, Ecuador, Bolivia, and the Dominican Republic, are leading to significant changes in their political systems. Venezuela began a major decentralization experience with direct election of governors and mayors in 1989 in an e√ort to buoy the flagging democratic regime. A subsequent backlash began, however, under President Rafael Caldera in the mid-1990s and was intensified under President Hugo Chávez Frías. The strong centralist penchant of his political experiment casts doubts on the intention of President Chávez to abide by the intent of earlier decentralization legislation, as his government sought to undue many of the early decentralization reforms. The bright promise of decentralization may fail if public finances are not adapted to the new model of government. Successful adaptation requires a 182 Rafael de la Cruz long-term public finance model that would enable the di√erent levels of government to be assigned responsibilities over income and expenditure, in keeping with their responsibilities, so as to increase the e≈ciency of the public sector and guarantee interregional equity. On the other hand, many decentralization experiencesinLatinAmericahavebeensetinmotionthroughacombinationof technical advice and political decision making. The resulting models sometimes display ill-designed rules regulating intergovernmental relations. Thus, although decentralization has contributed to enhancing governance in most cases, the need for improving and streamlining the structural incentives related to decentralization remains a daunting challenge. The Meaning of Decentralization: In Search of Governance The most important meaning of the rediscovery of federalism and the new decentralization modalities is, to a large extent, related to the very idea of democracy being the system that guarantees the greatest degree of freedom, participation by citizens, and justice in the formulation of public policies. The meaning of decentralization at the beginning of the twenty-first century is to devolve to the communities control over the state, bringing it administratively closer and making it more vulnerable to the preferences of the electorate. Decentralization is a way to enhance citizens’ faith in the democracy as well as a means to improve the quality and coverage of public services. Yet decentralization is still a work in progress. The way this governmental model is expressed in each country di√ers. In nations with an old federal tradition like the United States, the reinvention of government is associated with changes in the federal structure itself. In other, more centralized ones, like most Latin American countries, the fundamental challenge is to formulate public policies that will give communities a greater say in matters relevant to them and to overcome the ine≈cient, occasionally authoritarian, populist state model. The state structures and administrative mechanisms being implemented in each country reflect the variety of circumstances and the wealth of cultural, economic, and political legacies. Good decisions and mistakes have been made in every country facing the challenge of designing a new intergovernmental structure. The experience accumulated has been su≈ciently documented by the specialized literature showing that certain institutions are necessary to create the incentives that will enable the new wave of federalism to progress and deliver. Decentralization: Understanding a Changing Nation 183 First, the popular election of municipal and regional authorities (the latter in the cases where regional governments exist) is a requisite for increasing the dependence of public decision makers on their communities and to enhance accountability. On this point one must realize that there are many variants in the electoral mechanisms. The direct election of governors and mayors, or their equivalent in intermediate and local governments, is a widespread method and the most e√ective one to make o≈cials personally responsible to the electorate. The greatest risk of this scheme is that the political composition of the local and regional legislative bodies, which are also elected, may be the opposite of that of the executive branch.∞ This possible distortion may be attenuated by increasing the personal responsibility of the members of the legislative bodies through electing them nominally. Under these circumstances personalized accountability to the community for their actions when...