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Decentralizing a Centralized State: Local Government Finance in Chile Within the Latin American Context
Author(s) -
Scarpaci Joseph L.,
Irarrazaval Ignacio
Publication year - 1994
Publication title -
public budgeting and finance
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.694
H-Index - 30
eISSN - 1540-5850
pISSN - 0275-1100
DOI - 10.1111/1540-5850.01024
Subject(s) - decentralization , latin americans , unitary state , autonomy , public finance , state (computer science) , context (archaeology) , government (linguistics) , local government , central government , public administration , economics , political science , finance , economic policy , market economy , law , macroeconomics , paleontology , linguistics , philosophy , algorithm , biology , computer science
A major issue in Latin. America is the decentralization of public finances and the autonomy of local government. This article begins with a brief review of the ongoing decentralization debate. We then discuss key features of local government finance and autonomy among unitary and federal governments in Latin America. Against that backdrop, we focus on the Chilean case, which has been a widely celebrated success story in the economic development literature. We argue that despite major gains by municipal governments over the past two decades, financial decision making powers still rest with the national government. This creates financial complacency among local governments. To remedy this, we conclude with six proposals for promoting effective decentralization.