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Decentralising the Bolivian way

Dr Jean-Paul Faguet is Reader in the Political Economy of Development at LSE

Over the past 40 years, decentralization – that is, central governments devolving authority and resources to democratically elected sub-national governments – has been taking hold, to varying degrees, all over the world. It's considered a reform that holds the potential to improve the quality of governance but how has it performed in practice?

Decentralization and Popular DemocracyThe following text is a transcribed interview with Jean-Paul Faguet, a Reader in the Political Economy of Development at LSE. Dr Faguet, who won the 2013 WJM Mackenzie Book Prize for his book Decentralization and Popular Democracy: governance from below in Bolivia,  talks about the themes examined in the book, which is a story of government transformation, political collapse and the people's rise to power. 

Decentralisation is a huge wave that has been sweeping over the world for the past 40 years. The World Bank, in a study in 1999, estimated that between 80 and 100 per cent of the countries in the world – so up to literally every country in the world –was experimenting with some kind of decentralisation reform. Since then there have been a few dozen additional reforms announced, either new or deepening reforms, in a further 20 to 30 countries. So we can say that – with the exception of North Korea, where nobody knows – it’s going on essentially everywhere.

The Bolivians implemented decentralisation in 1994 as a shock therapy treatment. I should say, parenthetically, that that was a huge surprise to people at the World Bank, the IMF, and the international agencies generally. I know this for a fact because I was working at the World Bank at the time in La Paz in Bolivia. I was the guy in charge of health, education, environment, early childhood development, civil service reform, so I had responsibility for the sectors that would have been most affected by decentralisation. The government announced what they called the Law of Popular Participation, and nobody knew what it was. In the corridors of the World Bank office in La Paz we joked about it, in that not very funny way, saying “Oh look, they’re legislating participation!” And it turned out it was a deep, radical, shock therapy decentralisation. People have claimed in the press, and even in some academic papers, that it was imposed by the Bank. This is completely false.

Bolivian decentralisation helped the poor

What I studied was how decentralisation changed the responsiveness and accountability of government broadly in Bolivia, of the state to citizens. And what I found was that there was a huge step change in investment patterns. Much more got invested nationwide into education and healthcare, especially primary services; and at the most basic level – primary education, basic health posts with birthing chambers that tried to control infectious diseases – real primary services.

These patterns changed nationwide and those changes were driven not only by municipalities but by the poorest, most rural, most distant municipalities where you might think they wouldn’t have the sort of human capital or the basic conditions to run a good government. In fact, these places did not only very well, they did better than the average in Bolivia. So there is a huge change nationwide in what I would call pro-developmental, pro-poor sorts of public investments in public goods compared to before decentralisation. Also the greater responsiveness of these investments to people’s needs. So the places that got more primary education investment were the places that needed it more, where fewer people could read. The places that got more health investment were the places where disease rates were higher. The places that got more road investments were the places that had no roads. You can track this econometrically across the country. It’s quite a stunning finding.

The above text is transcribed from three short video interviews with Jean-Paul Faguet, To view these, and more, on the The Jobs Knowledge Platform website here|.

11 December 2013

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