Beyond the center: decentralizing the State

"Decentralization 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." This 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.