Table Of ContentPolitics Beyond the Capital
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1
CHAPTER
Explaining Decentralization
and Re-centralization
ONE OF THE MOST striking political trends ofrecent times is the growing
prominenceof oliticianswho hold overnmentaloffice below the national
level. etherthey are called mayors or governors,municipa counCllorsor-'"
s~islators,subnational politicians havecome to enjoy new types ofau
thorityrelative to national politicianswithin theirrespective countries.' Ex
amples abound ofthe rise ofsubnational actors. In Russia and China, re
gional and provincial officials in the 19905 acquired a much greater degree
ofautonomy from the center, as measured in their enhanced control over
fiscal revenues and local resources (Stoner-Weiss ~997;Wedeman 2003). In
India.village-level committees received new responsibilities over vital gov
ernmental services asa result ofconstitutional.amendments in 1992 (Singh
and Srinivasan 2002). In the Philippines, thanks to a 1991 reform that in
creased the independence ofsubnational governments, mayors report that
they no longer haveto go to Manila to getawindowfixedin CityHall (Eaton
200Ia). In SouthAfrica, architects ofthe democratic transition accommo
datedthe demands ofregionally based ethnic groups by expanding the pol
icymaking authority ofprovincial governments and by enabling them to
write their own constitutions (Steytler and Mettler 2001). And in Latin
America, where the strengthening ofsubnational governments is perhaps
most pronounced, many ambitious politicians now calculate that serving as
mayor ofa large city otTersbetter career opportunities than the traditional
legislative path. ~
Despite tremendous cross regional and cross-national di£f"'rences in the
s~ps.extent...and tjming o~henom~n.~~sethe rise ofsub
~aLpoliticians-san-be-attributed-to-some-form.-of.deGentralizatio~
SOUle countries,subuational actors have mustered the political strength to
.,
4 Introduction Decentralizationand Re-centralization 5
impose decentralizing changes from below oJUlationaLp.olic.)Cmakers who tensiverecords with decentralization and recentrali~gentina-:-Brazil
ChIle,and Ufuguay.2 - - , ,
otlierwise would have preferred to keep government centralized. In other
<:~es,strongsubnatlonatpJe~~u!!~Jiavebeen absent, but natjonalpcliti The interest in earlier episodes ofdecentralization represents a major de
clins at the top have..dssided to decentralize anyway in the pursuit ofa parture from the currentliterature (Angell,Lowden,andThorp 2001;Manor
whole host ofpolitical andeconomic objectives. Politicians in many cases 1999;O'Neill '999;Willis, Garman, and Haggard '999).Though theoreti
callysophisticated and empirically rich, this literature has suffered from its
have experImented wltTiOiilyvery cautious and gradual approaches to de
nearly exclusive focus on the contemporary period.The presentist bent of
centralization, but in other cases they have moved quickly to adopt quite
recent scholarship is easy to understand.Decentralization isa highly com
radical and aggressive measures.These differences in the paths toward de
centralizationareimportant,and th~Iiiake thIS top.leapartIcularly rich one plex issueaffecting multiple policy areasand a number ofdifferent political
fo~parative political science.but theY....Ee essenti~lly_dJfferent vanatIons actors operating at severallevels ofgovernment: Ironically,decentralization
hasemerged asone ofthe most exciting and important research topicsjust
on a common theme: the unmistakable, underlying shift toward more de
aspolitical science asa discipline has come to,place lessvalue on field re
centtilizedpatterns ofgovernment.In mostcounfiies:-due to aresearch tra
search.Relative to previous scholarly norms that neglected-the subnational
dition that longpnvilegedstudies ofnational actors, events,and institutions,
realmin favorofnational-level politics,decentralization has significantly in
this shift has exposed significant gaps in our knowledge ofpolitics below
creased the costs and complexity offield work by requiring researchers to
the national level and ofthe politicians who operate there (Linz and de
collect and analyze information ona multiplicity ofsubnational actors and
Miguel t966; Rokkan t970;Snyder 200lb).
The attempt to understandwhy subnationalactors haveacquired greater instituti.onsrather thanjust national-level data.'The research challen~in
salience and what their rise means for the political systems in which they valved In accurately documentingchange in these many policy areasand in
maneuver hasbegun to generate significant scholarly interest in the causes thSJ"olespJayea"by_t1)e~'Cdifferellr.mors are daunting,wlththei'eSUlitliat
fewscholarshavereviewed eVIdencefrom earlierperiods or comparedwaves
and consequences ofdecentralization.Asa study designed to contribute to
ofdecentralization througli time," .
the emerging literature on decentralization, the research presented in this
-~Despite these obStaCleS;rcontend.that broadening the frame ofreference
book innovates by significantly expanding the number ofcasesthat can be
to include prior experiences with decentralization holds out real promise.
usedto build and test general theories ofdecentralization.According to one
First,empirically speaking, placing the recent shifttoward decentralizedgov
ofthe book's central premises, while the current wave ofdecentralization
ernance intohistoricalperspective willhelp usseewhat isuniqueand whatis
appears to be more widespread than any prior wave,the phenomenon of
~ecentralizationitselfisnotuniqueto the contemporaD'~period.For acom not"about the current wave ofdecentralization. How does the current wave
plex setofreasons llJa\Jla=rted~across"time:and.space.natiomloifiCiais co'!lpare with earlierwaves?In what waysdoes the mix ofrights and respon
i~arlierperiods and in distinct polie areashavedecentralizedauthoritytQ sibilities devolved in earlier periods differfrom the mix preferredin the cur
sub"iUtiona 0 icials.Well before the most recent wave ofdecentralization rent period? What lessonscan be learned by studying what happened when
atU;;ied ~otice,the div1S1on ofatithorityoetween national and subnational earlierwavesofdecentralization receded? Second,and perhapsmore impor.,
governments regularly occaSIOned deep and protracted political confhcts: tantly,this research design can contributesignificantly to theory-buildingin
Th"e"basiCOt5rerv:I:tllltnl1anlRellti"alizatioll-is"not new proVIdesthe major theareaofdecentralization.The exclusivefocuson the contemporaryperiod
eco~
point ofdeparture for this book, and informs its use of a comparat~ in which such widespread phenomena asglobalization,democratization,
toncarappr5aChlifstuoymgihese earher eplsooes alengsi3e contemporary- nomic liberalization.and the rise ofethnic conflict allmay be saidto encour
cases.'Recogmzmgthe theoretIcal Importance ofepisodes that pre-date"the agedecentralization, makes it difficult to isolate the influence ofanyone of
thesefactors on the adoption ofdecentralizing policies.Incorporating earlier
--'9855and '990S offers a promising way to begin to close the gaps in Our
periodsinto the analysismakesitpossibleto control for some ofthesefactors
understanding ofpolitics beyond national capitals.Due ro its much earlier
independence from colonial rule relative to Africa andAsia.Latin America and expands the number ofobservations that can be used to identify cross
national and cross-temporal patterns and trajectories.Are the preferences of
offersaparticularly nch set ofcasesfor the study ofdecentralization across
focus::on:thejlJ'~lgt1 i~ national and subnational actors toward decentralization consistent through
tin;e,5peCifically,1- andre-design.ofsubnational
time? Is it possible to generalize about these preferences cross-nationally?
tions in the four LatinAmerican countries that have amassed the most ex-
,-
6 Introduction DecentralizationandRe-centralization 7
Underwhat conditions does decentralization deliverthebenefits anticipated tion (Donerand Hershberg 1999;Grindle 2000; O'Neill 1999).Ifdecentral
by politicians when they decide to devolve resources and responsibilities? ization transfers authority andresourcesto subnationalactors,then the indi
Ifhistory shows that decentralization isnot unique to the contemporary viduals who stand to lose powerfrom decentralizing changes-politicians at
period,it alsoindicates that we should not think ofdecentralization asirre the center-control thevery decisionto decentralize.Whywouldpoliticians
versible.Again,forreasonsthatvaryacrosscases,previous experiments with surrenderpower? .
decentralization have almost alwaysmet with re-centralizing reactions.At Insome cases,acloserlookatthe actualcontent of"decentralizing"poli
tention to the historical record suggests that powers devolved by national ciesmakes the decentralization puzzle altogetherlesspuzzling.For example,
policy makersto their counterparts atthe subnationallevel can alsobe re the detailed analysis of.decentralizing measures frequently shows that na
claimed.Sometimes re-centralization ispromotedasasolution to the prob tional policy makerswrite legislation in such away that it preserves their
lems createdby decentralization itself (e.g., macroeconomic instability and abilityto continue to control subnationalactors,even aftertheformal trans
perceived declines in the quality ofgovernmental services),but sometimes ferofrevenuesandexpenditures.National legislators canbe quite ingenious
itoccurs forexogenous reasonsthathavelitde to do with the consequences in this respect. For example. though the 1991Local Government Code in
ofdecentralization,includingsuch eventsasmilitarycoups ornational elec the Philippines has certainly proved to be one ofAsia'smost significant ex
toralvictories forpartieshostile to decentralization.Although.thereareim periences with decentralization,the Code protected the interestsofnational
portant reasonsto think ofthe wave ofdecentralization that began in the legislators in a variety ofways. Most importantly, it introduced nationally
1980sasone thatis still ongoing, in some countries this latestwave hasal controlled audit mechanisms oflocal officialsand forced local governments
ready crested and begun to experience significant reversals (Dickovick and to absorb employees ofthe national government,many ofwhom had been
Eaton 2004). hired at the behest ofnational legislators (Eaton 200ra, n8).As another ex
There areimportant parallelshere with the earlierliterature on regime ample, decentralizing reforms in Venezuela in 1996 increased the states'
change,which carefully identified and compared transitions back and forth sharesoftax revenuesbut gaveacentralgovernment agency"responsibility
between democratic andnon-democratic regimes (Linz 1978;O'Donnell, to allocate these resourcescontingent upon the submission andapprovalof
Schmitter.andWhitehead 1986).Despite the optimismgeneratedbydemoc specific earmarked projects by regional and local governments" (Penfold
racy's third wave (Huntington 1991).continued democratization iscertainly Becerra 2004).
not inevitablein thedevelopingworld,andneitheriscontinueddecentraliza A£>mmontacticbynationaldecision makers isthetransferofp'oliticalau
tion.Ratherthanbeingaone-shotdeal,the decisionto decentralize opens up thority to subnationalactors,by alloWingtheir direct election,withouu,all.\=...
anew andcontentious arenafor political struggle.Even acursory surveyof feI'i1ngadOihonaI resources,or,In the reverse,transferringresourcesbut not
experiences in developing countries demonstratesthatthe division ofpower allowingsubnatlOnaIelecDons.Mlmportant example ofibelatterphenome.
between levels ofgovernment can be highly unstable and contingent, with nOllis authoritarian Chile (1973~0).where the Pinochet government trans
nearlyconstantpressures to re-divide power in the attempt to benefit either ferred schools and hospitals to municipalities but replaced democratically
subnational or national actors.Considering that decentralization reallocates elected mayors with individuals who were closely controlled by the regime.
thevery authority tomake decisions,the'contentious natureofinrergovem In these and othercases,whatiscalled decentralization looks alot lessradical
mental relations is hardly surprising.Stepping back from'the current period, upon closer inspection.Thus,we should maintain a healthy degree ofskepti
one can observe changes bitk and forth along a continuum marked by cismwhen nationalactorsannounce thattheyhavedecentralized;the changes
greater degrees ofdecentralization atone end and greater degrees ofcentral they introduce mayfallwell short ofgenuine decentralization.
ization attheother.'At theheartofthisbookisthe considerationofavariety In another sense,concerted attempts by n~1i2!!al~S.!9r..uoJe.=.CentQ..lize
ofexplanationsfarmovementalongthis"continuumofdecentralization." authoriiymiliewaI<e of decentralization may also help make certain aspects
ofdiedecision to decentralizelesspuzzling.Two casesinpointateAr entina
Puzzles ofDecentralization andRe-centralization an~_~re nation ~~rtues_began to pursuere-centralizing mea
sures in the early 1990S snordy after the adoption ofdecentralizing changes
Articulating persuasiveexplanations ofdecentralization is particularlychal in the late 1980s.Thefre'luen0' of re centrahzmgattempts so soon afterde
lenging because the rationalebehind the decision to decentralize is seldom centralization suggests that national poli~~deed remain funda- ,
obvious. Manyscholars have emphasizedthe puzzlingnature ofdecentraliza- menEilly oPEoseato::aecentraliiingchanges•.eYen.as.they.are forced to adopt
8 Introduction Decentralization and Re-centralization 9
them by short-term political circumstances.At any given point in time, na-_
Interpreting Waves ofDecentralization andRe-centralization
tionaIpoliticians may endorse det::..e!lt:ra1izi~~measures that undermine their
institutionalinterests when theyare forced todoso.by.other.actors.In short,
Two particularly important hypotheses ha=.emerged_to_explain..decentral_
the weakness ofthe actors who oppose decentralization and the strength of
{zati'Onir'i:thecontemporarywperiod,By significantly expanding the number
those who advocate it may explain why decentralization occurs. Ifso,then cases·availab~
of study,the comparative historical approach adopted here
we need to do more than search for evidence that decentralization isin fact
makes it possible to evaluate these hypotheses more extensively than has
alwayscompatible with the underlyinginterests ofnational decision makers.
been attempted to date. Stated in theirmost general form, these hypotheses
Despite these caveats,in many cases,decentralization istruly puzzling.The
posit liberalizing changes in political regime type and economic policy ori
literature isfull ofexamples ofdecision makers at the centerwho,ratherthan
entation asthe two criticalfactors that explain decentralization.Drawingon
being forced to decentralize against their wishes,were proactive in adopting
the samecausallogic,movements in the opposite direction,awayfrom democ
decentralization foravariety ofstrategic reasons(Montero and Samuels 2004; racyandthe market,can be identified asthe chieffactors responsible for re
O'Neill '999,zooj.Willis,Garman,and Haggard 1999).~2':p'lainedlater in centralization.Accordingto the logic ofthese hypotheses,ifwe want to un
this chapter, Ifind it usefulto distin!>!!ishbetween"bottom-up..::.£Y.namics,"in
derstand the decision to decentralize or re-centralize,we must first consider
w~decentralizatiori' isforcedon.nationaldecision makers from below,and
the prior and more profound choices between democracy and authoritari
"top-down','Ratterns,in which national actors, operating in a more.strateg..!:=
anism, and between statism and the market.While academics, donors, and
mod~hoose to decentralize.Accordingto one ofthe central findings ofthis
policy makers themselves commonly cite democratization and"economic
study,much-ofthe content ofa.ecentralizing measures can be traced to the
liberalizationasfactors that have caused decentralization,t,",-e consistent ap
identityofthe actors (c,g.,national or.subnationalinorigin),who are respon
plication ofthese two hypotheses to a broad set ofcasesisnoticeably miss
siblefor msertingdecentralizationintothepolicy agenda.
ing from the literature. In abody ofscholarship thatisdominated by single
The successofre-centralizing efforts generatesits oWILSet~ot:explanatory
country studies, one ofthe chiefcontributions ofthisbook isto use amuch
puzzles. What explains the ability ofnational decisionmakers to buildsuffi
more varied set ofempiricalmaterials to systematically test these two hy
c'fentpolitical~pport to recliiiii'aii'thooty fr'O'iiiSUbnatiOi1'<4..govermhents?
potheses acrosstime and space."According to the findings that arepresented
In his'1999-studyfor theWorldBank.whichprovides one ofthe mostcom
in greater detail in the chapters that follow, episodic s:hangesin economic
prehensive surveys of the recent experience with decentralization,James ckv~!gE-me_I!t re~pe
.strategies.and areJJl1P-Qrtant.but..ultlmatrlY:fiisuf
Manorargues that attempts to re-centralize seldomfacepopularpressures in
ficient asexplanations ofmovement alongthe decentralization continuum.
defense ofdecentralization."Inallofthe many caseswhere higher-ups have
eroded or destroyed decentralized authorities ... there is no evidence of ECONOMIC POLICY ORIENTATION
preventative action at the grass roots" (Manor 1999, 76).The absence ofa
In the attemptto explain decentralization and re-centralization over time,
more vigorous grassroots defense ofdecentralization may be explained by
one promisingline ofinquityemphasizes the causalroleplayedbyfundamen
the reality that decentralization does not deliver tangible benefits to ordi
talreorientations ofeconomic policy.Just asmany developingcountries have
nary people, or does not deliver them soon enough (e.g., before the onset
alternated between democratic and non-democratic forms ofgovernment
ofre-centralizing pressures). But this fails to explain why subnationaloffi-,
through transitionsthatmightexplain decentralizationandre-centralization,
cials,who do stand to lose from the r~versal ofdecentralization, are unable
sohavethey experimentedwith different models ofeconomic development.
to prevent re-centralization.Whether' or not P~~E~.~_~~.~·~l_governorsand
Can the recent wave ofdecentralization be traced to the economic liberal
~yorsw~.re",~.ritical.J!!..!lleaaoption ofdecentralization to begin with7'one
ization that took place in so many countries in the 1980sand I990s?In this
would expect ~emto d_~(end a,<::quired rights and.resources. I,n_a~dition-.:o
section,Iargue that itiscritical to broaden the discussion ofeconomicliber
suggesting,that we should investigate the failed responses ofgovernors and
alization by asking more generally whether movement along the decentral
mayors, the fact ofre-centraliZatIon alwdirects our_~~tentionto·the~tools
izationcontinuum callbe explained bysuccessivechoices betweenstatistand
aridstrategies that centralizers use in seeking to reverse decentralization.Ex
market-oriented developmentstrategies.Did the illiberaleconomicstrategies
re-centralizatIOi1Catrthti~beas-
pla1mng intellectually challengingas ac
that held swayin the middle decades ofthe twentieth century cause central
counting for the decentralizing episodes that so far have received more at
ization, and were the more liberal strategies that predominated both earlier
tention from scholars.
and later responsible for movements in adecentralizingdirection?
f
t
10 Introduction Decentralization andRe-cenrralization I I
As political scientists have amply demonstrated, the implementation of In the closingdecades ofthe twentieth century,many deyelopingspuntries
state-led followed by market-oriented development strategies set into mo radiciliy alteredtheirecanamic deve10Qmentstrat~gie~ withPQtentiall~
a,
tion profound changes in the political life ofdeveloping countries in the iCJrttimplicatians far the distribution ofauthority between different leYels_of
twentieth century. State-led industrialization, for example, facilitated the go~ent.The deep economic crises ofthe 19805thatled to the discredit
emergence ofnew political movements and demands (Huntington 1968), ingand eventual abandonment ofstatistmodels also raised awareness ofthe
the incorporation ofnew interest groups into the political system (Collier costsofcentralizingtoo muchauthorityin thehandsofnational decisionmak
and Collier 1991),and the expansion ofthe state itself(Stepan 1978).Conse ers.In the statistera,the territorial reallocation ofauthority awayfromsubna
quently, the adoption ofmarket-orientedstrategies led to the ideological re tionalgovernmentsmay haveworsenedsome ofthe negative outcomes ofthat
configuration of political parties (Stokes 1999), the construction ofnew period, including the capture by leading industries ofkey decision-making
interest coalitions (Haggard and Kaufman 1992),and the redefinition ofcore bodies in the central government and the heavy concentration ofindustrial
state responsibilities and bureaucratic arrangements (Kahler 1990).Though investment around capital cities.At the same time, the specific selection of
the comparative literature has tended to neglect the impact on the sub market-orientedapproachesto replacestatismisbroadlythoughtto have given
national realm by focusing instead On changes in political parties, interest additional impetus to decentralization efforts(Burki,Perry,and Dillinger 1999;
groups, and the state bureaucracy at the national level, the pursuit ofdif Campbell 1997).At rhe most generalleveJ,liberalizersare attracted to decen
ferent development models has clearly had powerful consequences for sub tralization becauseit helpsthemshrinkthe sizeofthe central statethroughthe
national governments aswell. off-loadingofexpenditure responsibilities.By_weakening!::Y2.groupsthat have
~[ much ofthe twentieth century,the pursuit ofstate-led development been among the most steadfast supporters ofa more statist policy': orienta
~~national·tibor p~blic-sector bu~eaucrats-----:....d~tralization
strategies undoubtedly.sncouraged countries to centralize poweT-Despite_ UJllOns and
In~
much cross-national variation in the degree to which centralizationactually hasfurther appeal to liberalizers. important argumen7derived from the
occurred, centralism was a core component ofstatism asit was practiced in Cliiiieseca;-e;-Montmola:<:1!an, and Weingast (1995) have found'additional
most ofthe developing world.According to several generations ofdevelop cause to believe that liberalization and decentralizationgo together.Accord
ment scholars,ce~~ation.was crirical'for.the pertormance.oWJ.>..dt.difficuft ing to these scholars. policy makers can successfully pursue market-driven
and"necessary tasksas~ teI~no~oLstrtlctural obstacles.tojndustrializ~ growth-even in the absence offormal guarantees for investors-so long as
(Prebiscli 1959);-th-eforging..£f,.Qa\=kward andJonvard liu.kages (Hirschman decentralization allows forcompetition between subnaticnal units.Synthesiz
1961);7ri'ddie constructi;;-n offavorable alliances with dom~sticand foreign ing these various points, one could argue that decentralization has occurred
countr;~;;;;;:alization
capitaQE§.ns-1979):'"Ih country after took-place notjust because ofthe perceivedfailure ofcentralization, but because it corn
along-bOth horizontal and verticaldimensio~~.Horiz~ntally.stat~smat the plements the economic developmentmodelthathappenedto replace statism.
nationallevel led to the concentrationofdecision-makingauthorityamong
(
chiefexecutives and high-level bureaucrats, who gained power relative to Ac~gto the hypothesis discussed above, the centralization ofpolicyau- ,/
legislatorsVertically,by wrestingauthority awayfrom subnationalactors,stat- thority for much ofthe twentieth century ana its unmistakable decentral- \~
~
ism also led to important changes below the level ofthe national govern ization inthe 19805 and 1990S ismerelyparrDftheIargerstory oftheseirch
ment. Mayors and governors with broad powers to tax, spend, and borrow for~effective-development'111odelsT.o be confldentaboutthls hypothesls,We
were simply seen as incompatible with the pressing need to marshal and would want to establish that major changes in the distribution ofauthority
direct scerce resources toward those select industries whose growth was between levels ofgovernment are consistent with underlying shifts in eco-
deemedcriticalfor the entire country's development.Subnationalactors did nomic policy orientation.Whi!~p"ursuitofstatist and market-oriented
not lose alloftheirpowers,aidmany ofthe most important tools acquired approaches oftenresulted m su,b_national changes in the expected direction.I
by national actors were not taken away from subnationalgovernments but arguethatmanyimportant.changes inthe.rclationship.berween nationaLand
rathercreated expresslyfor the central government,including the important subnational governments cannot be attributed to changes In de:yel~pnlent
establishment ofstate development banks and state marketing boards (Bates models.]'...h'[!edistri~_utionofa\llhority_b~_tweennati9,nal and subnational
1981). Nevertheless,what appears to be clear is that twentieth-century stat officials has simply been much more frequeoctha.-n the more intermittent
ismleft little roomfor robust subnationalgovernments. shifts in"econom~-policy~;ientation.
IS
r
12 Introduction Decentralization and Re-cenrralization 13
For example, even within the period in which state-led development Simply put, ther~is n2...u<;h_[Qontto doubt whether decentralization-.and
strategies reigned supreme, countries implementedavariety ofboth central re_ce"ntralizationcan be simElvread offfrQ.nLdeeper-shifhjn~economic~pol
izing and decentralizing changes in the prerogatives and responsibilities as iCY-O!ieiitatlQ-ll.t...The Brazilian caseoffers an especially useful counter to the
signed to subnational governments.InArgentina and Brazil,revenue-sharing argument that aparticularmodel ofeconomic development unambiguously
rules were rewritten in adecentralizing direction in the 19405,even asthose leads its advocates to adopt the same types ofchanges in subnational gov
countries moved decisively to centralize governing responsibilities through ernments.As I argue in Chapter 5,statism in Brazil led to the expansion of
policies ofimport-substitutingindustrialization.Again,inArgentina,in 1973, governing capacity at the subnational aswell asat the national level,which
and Brazil,in 1988,policy makers adopted an even more sweeping decen problematizes the conceptualization ofstatist strategies as exclusively cen
tralization ofrevenue in the absence ofany concerted shift away from stat tralizing.BMy reading ofthe Brazilian case suggests that scholars need to
ism.And even more recently, that is,within the lasttwo decades ofmarket more carefully distinguish between the concepts of"statism" and"central
oriented policies,it ispossible to identify alternatingmoments ofexpansion ism."More generally,Chapter 5castsdoubt on the "policyorientation"hy
and contraction in the powers assigned to subnational actors." For instance, pothesis by showing that subnarional governments in Latin America ac
asI argue in Chapter7,Chile adopted significant changes in the distribu quired newfoundsalience undermilitaryrule in the 19605, 19705,and 19805,
tion of political authority and governing capacity in the 1990S without despite the fact that these governments pursued such different economic
questioning the parameters ofthe underlying liberal model inherited from strategies, ranging from the highly statist approach ofthe generals in Brazil
the authoritarian regime ofAugusto Pinochet. to Pinochet's quite doctrinaire version ofneoliberalism in Chile.
My casesalsosu gest that erpp.omicliberals have resp,sm£.ed_9ui,te differ Ta!:e~gether, these fmdin!E,~how that the reorientation ofeconC?~c
entlyto .ecentralizationat distinctp'oints in time. In Chile, in the late nine de":.~lop.,Tentstrategies,offerstoo blunt a c~_a_~_l..:..nation ofdecisions
teenth century,for example, economic liberals embraced decentralization as to centralize or decentralize, and that additional causal factors deserve our
a means ofvetoingthe statistproposals corningoutofthe executive branch. atteiii:i'O'iLHere too there isan importantparallelwith the earlier scholarship
on
By shifting taxing authority to the municipaliries, liberals hoped to prevent regime change.As that literature established, economic factors such as
the president from expanding the intervention ofthe state in the economy. industrial deepeningin the 1960sand the onset ofthe debt crisisafter 1982
Economic liberals in Uruguay in the early twentieth century embraced de shaped transitions from and to democracy, but reducing regime change to
centralization for essentially the same reasons-transferring fiscalauthority economic events seriouslyjeopardizes our ability to fully understand these
away from Montevideo made it harder for the president to grow the state transitions (Linz 1978;O'Donnell, Schmitter, andWhitehead 1986).Like
by increasing taxes on the country's leading exporters. In Iate-twentieth wise,centralizingand decentralizing changes can sometimes beattributed to
centuryArgentina and Brazil,however,the pursuit ofmore liberal develop major economic reforms,but they often have lessto do with the high poli-
ment strategies led to more centralizedforms ofgovernment under the pres .tics ofdevelopment strategy than with everyday struggles for political su
idencies ofCarlos Menem and Fernando Henrique Cardoso. In the 1990S, premacybetween and amongnational and subnational officials.
Menem and Cardoso emerged astwo ofthe mostsignificanteconomiclib
erals in the histories of their respective countries, yet they are most ac REGIME CHANGE
curately seen ascentralizers.Both ofthese presidentssought to rein in sub I argued in the previous section that It isimportant to consider notjust
national governments in response to the more austere fiscalconditions that the most recent wave of economic liberalization but, in a more broadly
faced most developing countries in the 1980s and 1990S. Understanding gauged-analysis,the causal rolesplayed by reorientations ofeconomic pol
cross-temporal variation in the relauogship between liberalization and de icy at earlier points in time and in both liberal and statist directions. In this
centralization requires usto disaggregate the latter term more carefully into section, I make a SImilarargument about political regime change. Does the
its component parts, asI do in the next chapter.What liberals in the con shiftbetween types ofregimes (e.g.,democratic and non-democratic) regu
temporary period have sought to centralize iscontrol over fiscal resources, larlytrigger decentralizingand re-ccntralizing changes? Underwhat condi
and what they have sought to decentralize are expenditure responsibilities tions do regime transitions lead decision makers to reallocate authority be
(Eaton 2001b,25).While this mixed response seems to be quite compatible tween the national and subnational governments?According to one ofthe
with liberalism in the contemporary period, earlier liberals were much less most widelyheldbeliefsabout decentralization,transitions to democracy set
interested in protecting the central government's authority over revenues. a variety of decentralizing changes into motion (Blair 2000; Crook and
