Improving Intergovernmental Relations
Edited by Giorgio Brosio and Juan P. Jiménez
Beyond the high institutional heterogeneity that characterizes Latin America, during the past decades the countries in the region have increasingly reallocated responsibilities from central levels of government to intermediate and local levels. Similarly to the rest of the world, most countries of the region have experienced a clear trend towards increasing decentralization of spending responsibilities. These decentralization processes have occurred in both federal countries as well as in unitary and/or centralized countries, however, through different institutional and legal instruments. Therefore, sub-national governments participate more and more actively in the management of a substantial part of the public budget. Despite the potential advantages frequently referred to in order to justify these reallocations, it is important to note that these decentralization processes and their results have not been uniform. The systems of intergovernmental relations and their impact in terms of efficiency and equity in the provision of decentralized goods and services (health, education and infrastructure) continue to be very heterogeneous. Evidently the expected benefits of decentralization must be evaluated with a view of the conditions in which the reform processes are orchestrated. Thereby it is essential to recognize a series of specific characteristics of Latin America: high inequality in income distribution, high level of urbanization, territorial inequality within countries, and limits to public policy imposed by low levels of taxation both at the central and the subnational government level. Moreover the development of decentralization processes together with the recovery and strengthening of democratic institutions must be stressed. In addition, in several countries...