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The incoherence of institutional reform: decentralization as a structural solution to immediate political needs

Faguet, Jean-Paul ORCID: 0000-0002-7188-0098 and Shami, Mahvish (2015) The incoherence of institutional reform: decentralization as a structural solution to immediate political needs. International Development Working Paper Series (15-170). Department of International Development, London School of Economics and Political Science, London, UK.

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Institutional reforms are structural changes in the rules and norms of authority, with long-term, unpredictable effects on government, politics and society. But leaders undertake them to solve unrelated, discrete, short-term political problems. Understanding the latter is key to understanding the characteristics of real reforms, and hence their fate. We introduce the concept of instrumental incoherence, and use it to construct a theory of decentralization where reform is motivated by orthogonal objectives. We show that reformers’ incentives map onto the specifics of reform design via their side effects, not their main effects, which in turn lead to the medium and long-term consequences eventually realized. We characterize downwardly-accountable decentralization, which ties the hands of the center to empower local voters, vs. upwardly-accountable decentralization, which ties the hands of local government to empower the center. We use these ideas to explain highly divergent outcomes in two extreme cases: Bolivia and Pakistan, using detailed, original evidence. Our analysis likely extends to a broader class of reforms where the incentives of agents pursuing a change, and the effects of that change, are highly asymmetric in time and dimension. It also implies a serial reform dynamic corrosive to institutions and to voters’ faith in politics.

Item Type: Monograph (Working Paper)
Additional Information: © 2021 The Authors
Divisions: International Development
Subjects: J Political Science > JL Political institutions (America except United States)
J Political Science > JQ Political institutions Asia
H Social Sciences > HN Social history and conditions. Social problems. Social reform
Date Deposited: 22 Feb 2021 11:51
Last Modified: 16 May 2024 12:21

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