Decentralization and Reform in Latin America

Decentralization and Reform in Latin America

Improving Intergovernmental Relations

Edited by Giorgio Brosio and Juan P. Jiménez

Decentralisation and Reform in Latin America analyses the process of intergovernmental reform in Latin America in the last two decades and presents a number of emerging issues. These include the impacts of decentralization and the response of countries in the region to challenge such as social cohesion, interregional and interpersonal disparities, the assignment of social and infrastructure expenditure, macrofinancial shocks, fiscal rules and the sharing of natural resources revenue. The main aim of the book is to assess the effective working of decentralized arrangements and institutions, with a view of suggesting corrections and reforms where the system is not working according to expectations.

Chapter 13: Intergovernmental reforms in Latin America, ‘Asian transplants’ and the role of international agencies

Ehtisham Ahmad

Subjects: development studies, development economics, economics and finance, development economics, public finance


In a number of countries in Latin America, and other parts of the developing world, there is pressure from a wide spectrum of political parties that see the issue of social spending, especially for education and health care and social protection, as part of subnational responsibility, influenced to a large extent by the North American model. But will such major reform work effectively and ensure higher living standards for all the people in all subnational jurisdictions? Are there other preconditions that must also be met? In this regard, international experience plays a valuable role in pointing out pitfalls and options for consideration. Bilateral and multilateral agencies have been quite active in advising on decentralization processes. The multilateral banks have done so partly because of the belief that decentralized service provision can provide better for the poorer sections of society by utilizing the information that may be available at the local level in tailoring the services to match the preferences of the population, and making access easier. Their views have evolved, as the difficulties with a decentralized approach have been better understood. Bilateral agencies have more explicit geo-political objectives, and sometimes these translate into trying to create societies and political structures that resemble their own in the expectation that this will lead to a congruence of interests. But quite often, the support has been given to those governments that tend to agree with the donor countries, especially in times of crisis, and under these circumstances the support can often go to centralizers, as was seen in Pinochet’s Chile, Suharto’s Indonesia, and Zia’s and Musharraf’s Pakistan.

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