Politics Beyond the Capital: The Design of Subnational Institutions in South America

PART ONE

Introduction

CHAPTER 1

Explaining Decentralization and Re-centralization

ONE OF THE MOST striking political trends of recent times is the growing prominence of politicians who hold governmental office below the national level. Whether they are called mayors or governors, municipal councilors or state legislators, subnational politicians have come to enjoy new types of authority relative to national politicians within their respective countries.¹ Examples abound of the rise of subnational actors. In Russia and China, regional and provincial officials in the 1990s acquired a much greater degree of autonomy from the center, as measured in their enhanced control over fiscal revenues and local resources (Stoner-Weiss 1997; Wedeman 2003). In India, village-level committees received new responsibilities over vital governmental services as a result of constitutional amendments in 1992 (Singh and Srinivasan 2002). In the Philippines, thanks to a 1991 reform that increased the independence of subnational governments, mayors report that they no longer have to go to Manila to get a window fixed in City Hall (Eaton 2001a). In South Africa, architects of the democratic transition accommodated the demands of regionally based ethnic groups by expanding the policymaking authority of provincial governments and by enabling them to write their own constitutions (Steytler and Mettler 2001). And in Latin America, where the strengthening of subnational governments is perhaps most pronounced, many ambitious politicians now calculate that serving as mayor of a large city offers better career opportunities than the traditional legislative path.

Despite tremendous cross-regional and cross-national differences in the scope, extent, and timing of this phenomenon, in every case the rise of subnational politicians can be attributed to some form of decentralization. In some countries, subnational actors have mustered the political strength to impose decentralizing changes from below on national policy makers who otherwise would have preferred to keep government centralized. In other countries, strong subnational pressures have been absent, but national politicians at the top have decided to decentralize anyway in the pursuit of a whole host of political and economic objectives. Politicians in many cases have experimented with only very cautious and gradual approaches to decentralization, but in other cases they have moved quickly to adopt quite radical and aggressive measures. These differences in the paths toward decentralization are important, and they make this topic a particularly rich one for comparative political science, but they are essentially different variations on a common theme: the unmistakable, underlying shift toward more decentralized patterns of government. In most countries, due to a research tradition that long privileged studies of national actors, events, and institutions, this shift has exposed significant gaps in our knowledge of politics below the national level and of the politicians who operate there (Linz and de Miguel 1966; Rokkan 1970; Snyder 2001b).

The attempt to understand why subnational actors have acquired greater salience and what their rise means for the political systems in which they maneuver has begun to generate significant scholarly interest in the causes and consequences of decentralization. As a study designed to contribute to the emerging literature on decentralization, the research presented in this book innovates by significantly expanding the number of cases that can be used to build and test general theories of decentralization. According to one of the book’s central premises, while the current wave of decentralization appears to be more widespread than any prior wave, the phenomenon of decentralization itself is not unique to the contemporary period. For a complex set of reasons that have varied across time and space, national officials in earlier periods and in distinct policy areas have decentralized authority to subnational officials. Well before the most recent wave of decentralization attracted notice, the division of authority between national and subnational governments regularly occasioned deep and protracted political conflicts. The basic observation that decentralization is not new provides the major point of departure for this book, and informs its use of a comparative historical approach in studying these earlier episodes alongside contemporary cases. Recognizing the theoretical importance of episodes that pre-date the 1980s and 1990s offers a promising way to begin to close the gaps in our understanding of politics beyond national capitals. Due to its much earlier independence from colonial rule relative to Africa and Asia, Latin America offers a particularly rich set of cases for the study of decentralization across time. Specifically, I focus on the design and re-design of subnational institutions in the four Latin American countries that have amassed the most extensive records with decentralization and re-centralization:Argentina, Brazil, Chile, and Uruguay.²

The interest in earlier episodes of decentralization represents a major departure from the current literature (Angell, Lowden, and Thorp 2001; Manor 1999; O’Neill 1999; Willis, Garman, and Haggard 1999). Though theoretically sophisticated and empirically rich, this literature has suffered from its nearly exclusive focus on the contemporary period. The presentist bent of recent scholarship is easy to understand. Decentralization is a highly complex issue affecting multiple policy areas and a number of different political actors operating at several levels of government. Ironically, decentralization has emerged as one of the most exciting and important research topics just as political science as a discipline has come to place less value on field research. Relative to previous scholarly norms that neglected the subnational realm in favor of national-level politics, decentralization has significantly increased the costs and complexity of field work by requiring researchers to collect and analyze information on a multiplicity of subnational actors and institutions rather than just national-level data.³ The research challenges involved in accurately documenting change in these many policy areas and in the roles played by these different actors are daunting, with the result that few scholars have reviewed evidence from earlier periods or compared waves of decentralization through time.⁴

Despite these obstacles, I contend that broadening the frame of reference to include prior experiences with decentralization holds out real promise. First, empirically speaking, placing the recent shift toward decentralized governance into historical perspective will help us see what is unique and what is not about the current wave of decentralization. How does the current wave compare with earlier waves? In what ways does the mix of rights and responsibilities devolved in earlier periods differ from the mix preferred in the current period? What lessons can be learned by studying what happened when earlier waves of decentralization receded? Second, and perhaps more importantly, this research design can contribute significantly to theory-building in the area of decentralization. The exclusive focus on the contemporary period, in which such widespread phenomena as globalization, democratization, economic liberalization, and the rise of ethnic conflict all may be said to encourage decentralization, makes it difficult to isolate the influence of any one of these factors on the adoption of decentralizing policies. Incorporating earlier periods into the analysis makes it possible to control for some of these factors and expands the number of observations that can be used to identify cross-national and cross-temporal patterns and trajectories. Are the preferences of national and subnational actors toward decentralization consistent through time? Is it possible to generalize about these preferences cross-nationally? Under what conditions does decentralization deliver the benefits anticipated by politicians when they decide to devolve resources and responsibilities?

If history shows that decentralization is not unique to the contemporary period, it also indicates that we should not think of decentralization as irreversible. Again, for reasons that vary across cases, previous experiments with decentralization have almost always met with re-centralizing reactions. Attention to the historical record suggests that powers devolved by national policy makers to their counterparts at the subnational level can also be reclaimed. Sometimes re-centralization is promoted as a solution to the problems created by decentralization itself (e.g., macroeconomic instability and perceived declines in the quality of governmental services), but sometimes it occurs for exogenous reasons that have little to do with the consequences of decentralization, including such events as military coups or national electoral victories for parties hostile to decentralization. Although there are important reasons to think of the wave of decentralization that began in the 1980s as one that is still ongoing, in some countries this latest wave has already crested and begun to experience significant reversals (Dickovick and Eaton 2004).

There are important parallels here with the earlier literature on regime change, which carefully identified and compared transitions back and forth between democratic and non-democratic regimes (Linz 1978; O’Donnell, Schmitter, and Whitehead 1986). Despite the optimism generated by democracy’s third wave (Huntington 1991), continued democratization is certainly not inevitable in the developing world, and neither is continued decentralization. Rather than being a one-shot deal, the decision to decentralize opens up a new and contentious arena for political struggle. Even a cursory survey of experiences in developing countries demonstrates that the division of power between levels of government can be highly unstable and contingent, with nearly constant pressures to re-divide power in the attempt to benefit either subnational or national actors. Considering that decentralization reallocates the very authority to make decisions, the contentious nature of intergovernmental relations is hardly surprising. Stepping back from the current period, one can observe changes back and forth along a continuum marked by greater degrees of decentralization at one end and greater degrees of centralization at the other.⁵ At the heart of this book is the consideration of a variety of explanations for movement along this continuum of decentralization.

Puzzles of Decentralization and Re-centralization

Articulating persuasive explanations of decentralization is particularly challenging because the rationale behind the decision to decentralize is seldom obvious. Many scholars have emphasized the puzzling nature of decentralization (Doner and Hershberg 1999; Grindle 2000; O’Neill 1999). If decentralization transfers authority and resources to subnational actors, then the individuals who stand to lose power from decentralizing changes—politicians at the center—control the very decision to decentralize. Why would politicians surrender power?

In some cases, a closer look at the actual content of decentralizing policies makes the decentralization puzzle altogether less puzzling. For example, the detailed analysis of decentralizing measures frequently shows that national policy makers write legislation in such a way that it preserves their ability to continue to control subnational actors, even after the formal transfer of revenues and expenditures. National legislators can be quite ingenious in this respect. For example, though the 1991 Local Government Code in the Philippines has certainly proved to be one of Asia’s most significant experiences with decentralization, the Code protected the interests of national legislators in a variety of ways. Most importantly, it introduced nationally controlled audit mechanisms of local officials and forced local governments to absorb employees of the national government, many of whom had been hired at the behest of national legislators (Eaton 2001a, 118). As another example, decentralizing reforms in Venezuela in 1996 increased the states’ shares of tax revenues but gave a central government agency responsibility to allocate these resources contingent upon the submission and approval of specific earmarked projects by regional and local governments (Penfold Becerra 2004).

A common tactic by national decision makers is the transfer of political authority to subnational actors, by allowing their direct election, without transferring additional resources, or, in the reverse, transferring resources but not allowing subnational elections. An important example of the latter phenomenon is authoritarian Chile (1973-90), where the Pinochet government transferred schools and hospitals to municipalities but replaced democratically elected mayors with individuals who were closely controlled by the regime. In these and other cases, what is called decentralization looks a lot less radical upon closer inspection. Thus, we should maintain a healthy degree of skepticism when national actors announce that they have decentralized; the changes they introduce may fall well short of genuine decentralization.

In another sense, concerted attempts by national actors to re-centralize authority in the wake of decentralization may also help make certain aspects of the decision to decentralize less puzzling. Two cases in point are Argentina and Brazil, where national authorities began to pursue re-centralizing measures in the early 1990s shortly after the adoption of decentralizing changes in the late 1980s. The frequency of re-centralizing attempts so soon after decentralization suggests that national politicians may indeed remain fundamentally opposed to decentralizing changes, even as they are forced to adopt them by short-term political circumstances. At any given point in time, national politicians may endorse decentralizing measures that undermine their institutional interests when they are forced to do so by other actors. In short, the weakness of the actors who oppose decentralization and the strength of those who advocate it may explain why decentralization occurs. If so, then we need to do more than search for evidence that decentralization is in fact always compatible with the underlying interests of national decision makers.

Despite these caveats, in many cases, decentralization is truly puzzling. The literature is full of examples of decision makers at the center who, rather than being forced to decentralize against their wishes, were proactive in adopting decentralization for a variety of strategic reasons (Montero and Samuels 2004; O’Neill 1999, 2003; Willis, Garman, and Haggard 1999). As explained later in this chapter, I find it useful to distinguish between bottom-up dynamics, in which decentralization is forced on national decision makers from below, and top-down patterns, in which national actors, operating in a more strategic mode, choose to decentralize. According to one of the central findings of this study, much of the content of decentralizing measures can be traced to the identity of the actors (e.g., national or subnational in origin) who are responsible for inserting decentralization into the policy agenda.

The success of re-centralizing efforts generates its own set of explanatory puzzles. What explains the ability of national decision makers to build sufficient political support to reclaim authority from subnational governments? In his 1999 study for the World Bank, which provides one of the most comprehensive surveys of the recent experience with decentralization, James Manor argues that attempts to re-centralize seldom face popular pressures in defense of decentralization. In all of the many cases where higher-ups have eroded or destroyed decentralized authorities ... there is no evidence of preventative action at the grass roots (Manor 1999, 76). The absence of a more vigorous grassroots defense of decentralization may be explained by the reality that decentralization does not deliver tangible benefits to ordinary people, or does not deliver them soon enough (e.g., before the onset of re-centralizing pressures). But this fails to explain why subnational officials, who do stand to lose from the reversal of decentralization, are unable to prevent re-centralization. Whether or not pressures from governors and mayors were critical in the adoption of decentralization to begin with, one would expect them to defend acquired rights and resources. In addition to suggesting that we should investigate the failed responses of governors and mayors, the fact of re-centralization also directs our attention to the tools and strategies that centralizers use in seeking to reverse decentralization. Explaining re-centralization can thus be as intellectually challenging as accounting for the decentralizing episodes that so far have received more attention from scholars.

Interpreting Waves of Decentralization and Re-centralization

Two particularly important hypotheses have emerged to explain decentralization in the contemporary period. By significantly expanding the number of cases available for study, the comparative historical approach adopted here makes it possible to evaluate these hypotheses more extensively than has been attempted to date. Stated in their most general form, these hypotheses posit liberalizing changes in political regime type and economic policy orientation as the two critical factors that explain decentralization. Drawing on the same causal logic, movements in the opposite direction, away from democracy and the market, can be identified as the chief factors responsible for re-centralization. According to the logic of these hypotheses, if we want to understand the decision to decentralize or re-centralize, we must first consider the prior and more profound choices between democracy and authoritarianism, and between statism and the market. While academics, donors, and policy makers themselves commonly cite democratization and economic liberalization as factors that have caused decentralization, the consistent application of these two hypotheses to a broad set of cases is noticeably missing from the literature. In a body of scholarship that is dominated by single-country studies, one of the chief contributions of this book is to use a much more varied set of empirical materials to systematically test these two hypotheses across time and space.⁶ According to the findings that are presented in greater detail in the chapters that follow, episodic changes in economic development strategies and regime type are important but ultimately insufficient as explanations of movement along the decentralization continuum.

ECONOMIC POLICY ORIENTATION

In the attempt to explain decentralization and re-centralization over time, one promising line of inquiry emphasizes the causal role played by fundamental reorientations of economic policy. Just as many developing countries have alternated between democratic and non-democratic forms of government through transitions that might explain decentralization and re-centralization, so have they experimented with different models of economic development. Can the recent wave of decentralization be traced to the economic liberalization that took place in so many countries in the 1980s and 1980s? In this section, I argue that it is critical to broaden the discussion of economic liberalization by asking more generally whether movement along the decentralization continuum can be explained by successive choices between statist and market-oriented development strategies. Did the illiberal economic strategies that held sway in the middle decades of the twentieth century cause centralization, and were the more liberal strategies that predominated both earlier and later responsible for movements in a decentralizing direction?

As political scientists have amply demonstrated, the implementation of state-led followed by market-oriented development strategies set into motion profound changes in the political life of developing countries in the twentieth century. State-led industrialization, for example, facilitated the emergence of new political movements and demands (Huntington 1968), the incorporation of new interest groups into the political system (Collier and Collier 1991), and the expansion of the state itself (Stepan 1978). Consequently, the adoption of market-oriented strategies led to the ideological reconfiguration of political parties (Stokes 1999), the construction of new interest coalitions (Haggard and Kaufman 1992), and the redefinition of core state responsibilities and bureaucratic arrangements (Kahler 1990). Though the comparative literature has tended to neglect the impact on the subnational realm by focusing instead on changes in political parties, interest groups, and the state bureaucracy at the national level, the pursuit of different development models has clearly had powerful consequences for subnational governments as well.

For much of the twentieth century, the pursuit of state-led development strategies undoubtedly encouraged countries to centralize power. Despite much cross-national variation in the degree to which centralization actually occurred, centralism was a core component of statism as it was practiced in most of the developing world. According to several generations of development scholars, centralization was critical for the performance of such difficult and necessary tasks as the removal of structural obstacles to industrialization (Prebisch 1959), the forging of backward and forward linkages (Hirschman 1961), and the construction of favorable alliances with domestic and foreign capital (Evans 1979). In country after country, centralization took place along both horizontal and vertical dimensions. Horizontally, statism at the national level led to the concentration of decision-making authority among chief executives and high-level bureaucrats, who gained power relative to legislators. Vertically, by wresting authority away from subnational actors, statism also led to important changes below the level of the national government. Mayors and governors with broad powers to tax, spend, and borrow were simply seen as incompatible with the pressing need to marshal and direct scarce resources toward those select industries whose growth was deemed critical for the entire country’s development. Subnational actors did not lose all of their powers, and many of the most important tools acquired by national actors were not taken away from subnational governments but rather created expressly for the central government, including the important establishment of state development banks and state marketing boards (Bates 1981). Nevertheless, what appears to be clear is that twentieth-century statism left little room for robust subnational governments.

In the closing decades of the twentieth century, many developing countries radically altered their economic development strategies, with potentially significant implications for the distribution of authority between different levels of government. The deep economic crises of the 1980s that led to the discrediting and eventual abandonment of statist models also raised awareness of the costs of centralizing too much authority in the hands of national decision makers. In the statist era, the territorial reallocation of authority away from subnational governments may have worsened some of the negative outcomes of that period, including the capture by leading industries of key decision-making bodies in the central government and the heavy concentration of industrial investment around capital cities. At the same time, the specific selection of market-oriented approaches to replace statism is broadly thought to have given additional impetus to decentralization efforts (Burki, Perry, and Dillinger 1999; Campbell 1997). At the most general level, liberalizers are attracted to decentralization because it helps them shrink the size of the central state through the off-loading of expenditure responsibilities. By weakening two groups that have been among the most steadfast supporters of a more statist policy orientation—national labor unions and public-sector bureaucrats—decentralization has further appeal to liberalizers. In an important argument derived from the Chinese case, Montinola, Qian, and Weingast (1995) have found additional cause to believe that liberalization and decentralization go together. According to these scholars, policy makers can successfully pursue market-driven growth—even in the absence of formal guarantees for investors—so long as decentralization allows for competition between subnational units. Synthesizing these various points, one could argue that decentralization has occurred not just because of the perceived failure of centralization, but because it complements the economic development model that happened to replace statism.

According to the hypothesis discussed above, the centralization of policy authority for much of the twentieth century and its unmistakable decentralization in the 1980s and 1990s is merely part of the larger story of the search for effective development models.To be confident about this hypothesis, we would want to establish that major changes in the distribution of authority between levels of government are consistent with underlying shifts in economic policy orientation. While the pursuit of statist and market-oriented approaches often resulted in subnational changes in the expected direction, I argue that many important changes in the relationship between national and subnational governments cannot be attributed to changes in development models. The redistribution of authority between national and subnational officials has simply been much more frequent than the more intermittent shifts in economic policy orientation.

For example, even within the period in which state-led development strategies reigned supreme, countries implemented a variety of both centralizing and decentralizing changes in the prerogatives and responsibilities assigned to subnational governments. In Argentina and Brazil, revenue-sharing rules were rewritten in a decentralizing direction in the 1940s, even as those countries moved decisively to centralize governing responsibilities through policies of import-substituting industrialization. Again, in Argentina, in 1973, and Brazil, in 1988, policy makers adopted an even more sweeping decentralization of revenue in the absence of any concerted shift away from statism. And even more recently, that is, within the last two decades of market-oriented policies, it is possible to identify alternating moments of expansion and contraction in the powers assigned to subnational actors.⁷ For instance, as I argue in Chapter 7, Chile adopted significant changes in the distribution of political authority and governing capacity in the 1990s without questioning the parameters of the underlying liberal model inherited from the authoritarian regime of Augusto Pinochet.

My cases also suggest that economic liberals have responded quite differently to decentralization at distinct points in time. In Chile, in the late nineteenth century, for example, economic liberals embraced decentralization as a means of vetoing the statist proposals coming out of the executive branch. By shifting taxing authority to the municipalities, liberals hoped to prevent the president from expanding the intervention of the state in the economy. Economic liberals in Uruguay in the early twentieth century embraced decentralization for essentially the same reasons—transferring fiscal authority away from Montevideo made it harder for the president to grow the state by increasing taxes on the country’s leading exporters. In late-twentieth-century Argentina and Brazil, however, the pursuit of more liberal development strategies led to more centralized forms of government under the presidencies of Carlos Menem and Fernando Henrique Cardoso. In the 1990s, Menem and Cardoso emerged as two of the most significant economic liberals in the histories of their respective countries, yet they are most accurately seen as centralizers. Both of these presidents sought to rein in subnational governments in response to the more austere fiscal conditions that faced most developing countries in the 1980s and 1990s. Understanding cross-temporal variation in the relationship between liberalization and decentralization requires us to disaggregate the latter term more carefully into its component parts, as I do in the next chapter. What liberals in the contemporary period have sought to centralize is control over fiscal resources, and what they have sought to decentralize are expenditure responsibilities (Eaton 2001b, 25). While this mixed response seems to be quite compatible with liberalism in the contemporary period, earlier liberals were much less interested in protecting the central government’s authority over revenues.

Simply put, there is much room to doubt whether decentralization and re-centralization can be simply read off from deeper shifts in economic policy orientation. The Brazilian case offers an especially useful counter to the argument that a particular model of economic development unambiguously leads its advocates to adopt the same types of changes in subnational governments. As I argue in Chapter 5, statism in Brazil led to the expansion of governing capacity at the subnational as well as at the national level, which problematizes the conceptualization of statist strategies as exclusively centralizing. ⁸ My reading of the Brazilian case suggests that scholars need to more carefully distinguish between the concepts of statism and centralism. More generally, Chapter 5 casts doubt on the policy orientation hypothesis by showing that subnational governments in Latin America acquired newfound salience under military rule in the 1960s, 1970s, and 1980s, despite the fact that these governments pursued such different economic strategies, ranging from the highly statist approach of the generals in Brazil to Pinochet’s quite doctrinaire version of neoliberalism in Chile.

Taken together, these findings show that the reorientation of economic development strategies offers too blunt a cut as an explanation of decisions to centralize or decentralize, and that additional causal factors deserve our attention. Here too there is an important parallel with the earlier scholarship on regime change. As that literature established, economic factors such as industrial deepening in the 1960s and the onset of the debt crisis after 1982 shaped transitions from and to democracy, but reducing regime change to economic events seriously jeopardizes our ability to fully understand these transitions (Linz 1978; O’Donnell, Schmitter, and Whitehead 1986). Likewise, centralizing and decentralizing changes can sometimes be attributed to major economic reforms, but they often have less to do with the high politics of development strategy than with everyday struggles for political supremacy between and among national and subnational officials.

REGIME CHANGE

I argued in the previous section that it is important to consider not just the most recent wave of economic liberalization but, in a more broadly gauged analysis, the causal roles played by reorientations of economic policy at earlier points in time and in both liberal and statist directions. In this section, I make a similar argument about political regime change. Does the shift between types of regimes (e.g., democratic and non-democratic) regularly trigger decentralizing and re-centrahzing changes? Under what conditions do regime transitions lead decision makers to reallocate authority between the national and subnational governments? According to one of the most widely held beliefs about decentralization, transitions to democracy set a variety of decentralizing changes into motion (Blair 2000; Crook and Manor 1998; Nickson 1995). The salience of this hypothesis owes to the frequency with which the third wave of democracy that began in Portugal and Spain in the mid-1970s appears to have been followed by an equally widespread wave of decentralization in the 1980s and 1990s. This sequence has begged the question of whether the first wave caused the second (Eaton 2004a; Montero and Samuels 2004; Oxhorn 2004), though in some countries the simultaneity of the two events undercuts claims of causation. Is the democratization hypothesis time-bound? On the face of it, if democratization causes decentralization, we should expect to see evidence of this dynamic in the wake of earlier democratic transitions. Evidence that prior transitions to democracy routinely led to decentralization would increase our confidence in democratization as a critical factor in the current period. Otherwise, the question becomes why this causal pattern holds only in certain periods and not in others.

Both democratization and decentralization can be understood as changes that divide and fragment, rather than concentrate, power. While democratization redistributes power among executive, legislative, and judicial actors, decentralization redistributes power across levels of government. But what is the causal logic that might connect these two phenomena? As is the case with the reorientation of economic policy, a variety of causal paths can be identified.⁹ For example, democratically elected officials might view decentralization as a reform that will further the democratic transition itself and/or make the future breakdown of democracy less likely. According to Diamond, In countries emerging from authoritarian rule in Latin America, decentralization was seen as a means to dilute the power of the central state and thus undermine the political, social and economic resource bases on which authoritarian rule could be rebuilt (Diamond and Tsalik 1999, 120). A similar dynamic can be identified in the Philippines, where Corazon Aquino emphasized decentralization as one of the most effective ways to secure democracy (Eaton 2001a, 116). According to Grindle, audacious reforms that decentralized authority in Argentina, Bolivia, and Venezuela were also designed to strengthen democratic openings in each country (2000, 18).

But the more generalizable claim is that democratization empowers a variety of actors—voters, interest groups, and social movements—who may use more open political systems to act on their preference for decentralization. If voters prefer decentralization, and if elections are free and fair, then the holding of electoral contests should generate decentralizing pressures. Unlike unelected chief executives, presidents and prime ministers who are democratically elected may agree to decentralize as a means of bolstering their electoral support among groups who favor decentralization (Garman, Haggard, and Willis 1996). Where politicians calculate that decentralization will improve the economic indicators on which elections often turn, the introduction of elections may encourage them to decentralize even in the absence of pronounced voter interest in decentralization.

In this book I privilege one particular variant of the democratization hypothesis and let this hypothesis drive the selection of cases included in my research. According to this specific subnational elections hypothesis, the adoption of electoral mechanisms to select subnational officials transforms these officials into powerful advocates of changes that shift authority over resources and expenditures downward. In other words, when elections replace appointments as the mechanism for selecting subnational officials, democratization at this level should produce pressures for decentralization from below. This hypothesis merits special attention precisely because so many developing countries have recently expanded the scope