Legacies of mistrust: Why colonial imprints on the implementation of fiscal reforms in Mozambique and Mexico matter

National authorities across Latin America and Sub-Saharan Africa have implemented various forms of fiscal decentralization over the past three decades with equivocal results. The design of such reforms has long rested on theories based on the experiences of high-income countries’ efforts at increasing local autonomy, accountability, and basic service efficiencies. Critics of the global advocacy for fiscal decentralization, however, point to several challenges with its implementation across diverse political economies that differ significantly from those in high-income environments. Nonetheless, these critiques often obscure the impact that colonial regimes and their legacies have on current efforts to fiscally decentralize. In two postcolonial environments where fiscal decentralization projects have unrolled, namely Mozambique and Mexico, we show how colonial imprints remain critical to understanding efforts at fiscal decentralization. Our focus in these cases is on how race-based caste systems introduced under colonial administrations fed the development and evolution of dual governance systems across spaces and peoples that bred mistrust between residents, local authorities and central authorities. We argue that the conflicting rationales in evidence between stakeholders involved in fiscal decentralization projects today are rooted in the social mistrust and power struggles born from these colonial experiences. In conclusion, we contend that fiscal decentralization reforms must explicitly grapple with these spatialized and racialized legacies of mistrust and the diverse rationalities guiding stakeholders in both the design and evaluation of public policies meant to strengthen local autonomy, transparency, and efficiencies.