Books and Special Issues

Why is there so much institutional reform in the world? If institutions are the deep rules of the game that determine how societies are governed, collective decisions taken, and resources mobilized for public purposes, then changing them is bound to have effects that are long-run and multidimensional across politics, the economy and society. Such effects will be unpredictable. Politicians with short time horizons should flee such initiatives, but instead embrace them the world over. Why? Because politicians design reform processes around often unstated private goals that may be orthogonal, or even directly opposed, to a reform’s stated, public goals. We characterize instrumental mismatch as the gap between stated goals and the specific reform instruments politicians deploy. Such reforms lead to incongruous institutions ill-suited to their core purpose, and hence to outcomes that are bad for society. Through 14 case studies from Latin America, India, Rwanda and the UK we test, refine, and significantly expand the theory. A final paper mines this evidence to propose four game-theoretic models of institutional change from a complex systems perspective. Taken together, we call this the complexity approach to institutional reform.

For developing countries, decentralising power from central government to local authorities holds the promise of deepening democracy, empowering citizens, improving public services and boosting economic growth. But how and when it will work is unclear. Under the wrong conditions, decentralised power can be captured by unrepresentative elites or undermined by corruption and clientelism. We still do not understand enough about what factors can contribute to creating better local government, and to what effect. 

Decentralised Governance brings together a new generation of political economy studies that explore these questions analytically, blending theoretical insights with empirical innovation. Individual chapters provide fresh evidence from around the world, including broad cross-country data as well as detailed studies of Bangladesh, India, Pakistan, China, Indonesia, Ghana, Kenya and Colombia. They investigate the pros and cons of decentralisation in both democratic and autocratic regimes, and the effects of advances in technology, citizen-based data systems, political entrepreneurship in ethnically diverse societies, and reforms that improve transparency.

This wide-ranging volume is essential reading for researchers investigating decentralised governance, development and democratisation, and for policymakers and practitioners drawing lessons for future reforms.

Is decentralisation good for development? This book offers insights and lessons that help us understand when the answer is Yes, and when it is No. It shows us how decentralisation can be designed to drive development forward, and focuses attention on how institutional incentives can be created for governments to improve public sector performance and strengthen economies in ways that enhance citizen well-being. It also draws attention to the political motives behind decentralisation reforms and how these shape the institutions that result.

This book brings together academics working at the frontier of research on decentralization with policymakers who have implemented reform at the highest levels of government and international organizations. Its purpose is to marry policymakers' detailed knowledge and insights about real reform processes with academics' conceptual clarity and analytical rigor. This synthesis naturally shifts the analysis towards deeper questions of decentralization, stability, and the strength of the state. Part 1 contains deep studies of state capacity, political and fiscal stability, and democratic inclusiveness in Bolivia, Pakistan, India, and Latin America more broadly. These complex questions are difficult to address with statistics but yield before a multipronged attack of quantitative and qualitative evidence combined with deep practitioner insight. Part 2 examines how reformers should design decentralisation with evidence from four decades of reform in developing and developed countries. Part 3 turns to decentralization's effects on health and education services, anti-poverty programs with original evidence from 12 countries across Africa, Asia, and Latin America.

The most important theoretical argument concerning decentralization is that it can make government more accountable and responsive to the governed. Improving governance is also a central justification of real-world reformers. But the literature has mostly focused on policy-relevant outcomes, such as education and health services, public investment, and fiscal deficits. The papers in this collection examine how decentralization affects governance, in particular how it might increase political competition, improve public accountability, reduce political instability, and impose incentive-compatible limits on government power, but also threaten fiscal sustainability. Such improvements in governance can help spur the broad historical transitions that define development.

These papers come out of an unusual workshop held at Columbia University, sponsored by the Initiative for Policy Dialogue’s Decentralization Task Force. Seeking to re-unite academics studying decentralization with the policymakers who implement it, the two-day event brought together researchers working at the empirical and theoretical frontiers of decentralization and local government with policy practitioners who have implemented or supported reform at the highest levels of government and international organizations. The purpose of the workshop was not only to exchange ideas, but to marry policymakers’ detailed knowledge and insights about real reform processes with academics’ conceptual clarity and analytical rigor. This collection is the result.

Decentralized spending at the woreda level is both effective and pro-poor. The estimates provided here imply that the returns to this spending are far from decreasing, which means that Ethiopia has scope to increase spending and speed its attainment of the MDGs.

The current approach also appears to be helping some of Ethiopia’s historically disadvantaged areas and ethnic groups to catch up with the rest of the country. Expenditure to provide basic services at the woreda level is broadly equal across Ethiopia’s woredas, with the striking exception of a small number of woredas that are concentrated in the country’s most disadvantaged regions and receive significantly greater resources. Resource flows are lowest among the more developed, historically dominant regions.

In contrast to the predictions of some public management theories, the decentralized provision of services in Ethiopia is not increasing regional, ethnic, or gender inequalities in investment inputs or service outputs. Indeed, the opposite seems to be true for education and health, where the impact of PBS-financed IGFT resources was disproportionately high among the bottom two quintiles and women. In sum, support for decentralized services in Ethiopia appears to be an effective use of development partners’ resources from both an efficiency and equity perspective.

Decentralization is everywhere around us and yet we cannot say what, if anything, it achieves. Proponents argue that it will deepen democracy, improve public services, and make government more accountable. These intuitions have prompted a massive policy response across the globe, with an estimated 80-100 percent of the world’s countries experimenting with reform. But careful research has not found that it achieves any of these goals. Is it all empty fashion? A giant mistake?

In Decentralization and Popular Democracy, Jean-Paul Faguet uses the remarkable case of Bolivia, a radical reformer over two decades, to investigate what happens when a country decentralizes. The answer is remarkable success leading to transformation. Public investment shifted dramatically towards primary services and human capital formation, while the distribution of resources across the nation became much more equitable. These changes were disproportionately driven by Bolivia’s smaller, poorer, more rural municipalities investing newly devolved funds according to greatest need. The accumulation of such micro-level changes led the Bolivian state as a whole to become more responsive to citizens nationwide.

But these successes are only the beginning. Some municipalities responded to decentralization with transparent, accountable government, while others suffered ineptitude, corruption, and worse. Why? In order to discover the causes of good and bad government, Faguet drives his investigation deep into the political and social underpinnings of governance. He deploys statistical evidence covering all of Bolivia’s municipalities, territory, and citizens over twenty-one years, alongside deep qualitative evidence based on fieldwork that ranges from the altiplano to the broad Eastern plains, and from the smallest hamlets to the richest industrial cities.

His results show that governments are responsive and accountable when civil society is rich in active, organized groups, and these groups compete with economic interests for influence over policy decisions. The interaction of civic and economic actors is especially important, resolving differences between them and often modifying the priorities of each. Where more interactions occur, Faguet demonstrates, government outcomes are systematically better. These insights are used to construct a theory of government that explains why some democracies succeed and others fail.

It also explains how governance can be transformed over time. Decentralization is not a policy lever, but rather a process that operates at deep levels of politics and society. The long-term changes that it kicked into motion in Bolivia proved even more important – and dramatic – than the initial positive results. Decentralization and Popular Democracy tells the story of the transformation of a country’s government, the collapse and re-birth of its politics, and the rise to power of its people through a trapdoor unlocked by decentralization.

More information, including chapter summaries and praise for the book, available here.

¿Cuál es la relación entre las distintas oleadas de democratización y la histórica tensión entre centralización y descentralización del Estado en Bolivia? ¿Cómo ha condicionado esta interacción la construcción del Estado y su relación con la idea de nación? Son las preguntas guía del debate que da origen al trabajo que hoy ponemos a consideración del lector. El presente libro está dividido en tres partes. En la primera presentamos tres estudios que, desde una perspectiva histórica, analizan por un lado las tensiones que atraviesa la descentralización en Bolivia, enfocando la disyuntiva histórica entre centralismo y descentralización, tanto en la forma que ésta adoptó en la construcción del discurso departamental/regional, así como la forma que adoptó respecto a las relaciones interétnicas y las relaciones entre lo urbano y lo rural; por otro lado, analizan la lógica y el desenvolvimiento del sistema de partidos boliviano contemporáneo en el contexto de dicha tensión entre centralismo y descentralización. En la segunda parte, desde las perspectivas de la sociología política y la economía política, presentamos dos estudios del proceso de descentralización municipal que vivió Bolivia en la década de 1990 y sus impactos en la relación entre democratización y descentralización del Estado. 

En la tercera parte, se rastrea el proceso de surgimiento de las autonomías departamentales y su desenvolvimiento en el marco de una nueva oleada de tensiones entre la ampliación de la participación de la población en la toma de decisiones, y la adopción de una nueva estructura institucional de relacionamiento entre el Estado, el territorio y la nación.

Durante 50 años, el sistema de partidos políticos de Bolivia fue un componente sorprendentemente robusto de una democracia por lo demás frágil, que soportó golpes de Estado, hiperinflación, insurgencias guerrilleras y caos económico. ¿Por qué se derrumbó repentinamente alrededor de 2002? Propongo una perspectiva teórica que combina la teoría de los clivajes con el concepto de dimensiones competitivas de Schattschneider y luego analizo empíricamente las características estructurales e ideológicas del sistema de partidos de Bolivia entre 1952 y 2010. La política pasó de un eje convencional de competencia izquierda-derecha, inadecuado para la sociedad boliviana, a un eje étnico/rural -cosmopolita/urbano estrechamente alineado con su principal clivaje social. Este cambio debilitó fatalmente a los partidos de la élite, facilitando el surgimiento de organizaciones estructural e ideológicamente distintas, así como el de una nueva clase política autóctona, que transformó la política del país. La descentralización y la liberalización política fueron los detonantes que convirtieron el clivaje latente de Bolivia en algo político, desencadenando la revolución desde abajo. Propongo un teorema popular del clivaje identitario y esbozo un mecanismo que vincula el clivaje social profundo con el cambio político repentino.