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Decentralization and local government in Bolivia : an overview from the bottom up

Faguet, Jean-Paul ORCID: 0000-0002-7188-0098 (2003) Decentralization and local government in Bolivia : an overview from the bottom up. Crisis States Research Centre working papers series 1 (29). Crisis States Research Centre, London School of Economics and Political Science, London, UK.

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Hundreds of studies have failed to establish the effects of decentralization on a number of important policy goals. This paper examines the remarkable case of Bolivia to explore decentralization's effects on government responsiveness and poverty-orientation. I first summarize econometric results on the effects of decentralization nationally, and then turn to qualitative research – the focus of the paper – that digs deep into local government processes to understand how decentralization did this. In Bolivia, decentralization made government more responsive by re-directing public investment to areas of greatest need. Investment shifted from economic production and infrastructure to social services and human capital formation, and resources were rebalanced in favor of poorer districts. I explain these results as the aggregate of discrete local institutional and political dynamics. I develop a conceptual model which construes local government as the nexus of two political markets and one organizational dynamic, where votes, money, influence and information are freely exchanged. In order for local government to be effective, these three relationships must counterbalance each other and none dominate the other. Such a stable tension leads to a self-limiting dynamic where pressures from various interest groups are contained within the bounds of political competition. Breaking this tension can hobble government, leaving it undemocratic, insensitive to economic conditions, or uninformed and unaccountable.

Item Type: Monograph (Working Paper)
Official URL:
Additional Information: © 2003 Jean-Paul Faguet
Divisions: STICERD
International Development
Subjects: J Political Science > JC Political theory
J Political Science > JS Local government Municipal government
JEL classification: D - Microeconomics > D7 - Analysis of Collective Decision-Making > D73 - Bureaucracy; Administrative Processes in Public Organizations; Corruption
D - Microeconomics > D7 - Analysis of Collective Decision-Making > D72 - Economic Models of Political Processes: Rent-Seeking, Elections, Legislatures, and Voting Behavior
O - Economic Development, Technological Change, and Growth > O1 - Economic Development > O18 - Regional, Urban, and Rural Analyses
H - Public Economics > H7 - State and Local Government; Intergovernmental Relations > H72 - State and Local Budget and Expenditures
H - Public Economics > H4 - Publicly Provided Goods > H41 - Public Goods
H - Public Economics > H4 - Publicly Provided Goods > H42 - Publicly Provided Private Goods
Date Deposited: 18 Nov 2005
Last Modified: 16 May 2024 11:31

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