Beyond the Center: Decentralizing the State

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Shahid Javed Burki, Guillermo Perry, William R. Dillinger
World Bank Publications, Jan 1, 1999 - Political Science - 105 pages
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QUOTEDecentralization is transforming the structure of governance in Latin America. Since 1983, all but one of the largest countries in the region have seen a transfer of power, resources, and responsibilities to subnational units of government.QUOTEThis dispersion of power is a global trend due to many different political , economic, and social factors. However, as this trend continues, the importance of accountability, deciding who is responsible for what, and giving those held accountable the authority to deliver results. In light of these important issues, this report examines the impact of decentralization and its effect on the efficiency of public services, on equity, and on macroeconomic stability. It also addresses the issue of politics and notes that successful decentralization requires more than good rules. Those rules must be compatible with incentives Therefore, the report looks at the broader set of rules that affect political behavior, focusing particularly on electoral systems and political parties.
 

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Page 42 - Second, it constrained the provinces' ability to borrow from their own banks by eliminating their access to the central bank rediscount facility and tightening bank regulation. After the 1994-95 economic shock, most provinces had to recapitalize or privatize their banks, rather than being able to borrow from them.
Page 88 - Decentralization of road agencies — devolving the responsibility for planning, building, and maintaining "nonnational" roads to state and local governments — is one reform that has been promoted as a way of bringing road users and managers closer. The objective is to facilitate a greater correlation between the quality of roads that users are willing to support and those that are provided. There are a limited number of analyses of the impact of road decentralization. A World Bank review of 42...
Page 99 - Governance and Development: Issues and Constraints," Proceedings of the World Bank Annual Conference on Development Economics.
Page 43 - ... that influenced subsequent agreements. First, the federal government actually put the state debt on its books and then provided relief in the form of rescheduling, rather than forgiveness. Second, through the combination of grace periods, rescheduling, and debt service caps, the agreements reduce the debt service burden of sitting administrations, leaving the fiscal consequences to their successors. The repeated cycle of the federal government refinancing state debt, coupled with caps on debt...
Page 101 - Policy Research Working Paper No. 1658, September. Washington, DC: World Bank. Humplick, Frannie, and Azedeh Moini-Araghi (1996b). "Is There an Optimal Structure for Decentralized Provision of Roads?
Page 36 - The transition from a centralized to a decentralized system might lead to higher average deficits of the central government (or to higher taxes) because its direct spending is not reduced as it increases transfers or gives up tax bases to sub-national governments. Such an outcome may develop because of a serious mismatch between allocation of responsibilities and resources. It can also arise because the sub-national governments fail to do the job with the moneys transferred, leaving the center with...
Page 42 - Nación was withholding over half of their coparticipaciones. to pay to creditors. Eventually they had to cut investment programs, lay off non-permanent staff, give regular staff time off without pay, and implement emergency revenue measures. In some cases the federal treasury facilitated refinancing of provincial debt, but at market rates with no bailouts. And neither the federal government nor its agencies took over any provincial debt; the law forbade it. Most of the smaller states, along with...
Page 73 - The reform process is a learning process The process is evolutionary and developmental in nature. It cannot be blueprinted ahead of time. The key to success is to get good data from all parts of the system on a continuous basis, studied and worked on at the school/district level, and subsequently at the central level. This implies a competent supervision and monitoring system. Think systemic and big A vision of reform that affects school life substantially will have more effect than a cautious, incremental...
Page 21 - The theory argues that if the benefits of particular services are largely confined to local jurisdictions, welfare gains can be achieved by permitting the level and mix of such services to vary according to local preferences.

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