Democratizing Decentralization in Bolivia The Law of Popular Participation

In 1994, as part of a global trend, Bolivia instituted an ambitious decentralization program that not only transferred funds and new responsibilities to municipal governments but also mandated participatory budgeting and oversight by local organizations. This article offers a preliminary assessment of the program, focusing on its effects on government efficiency, economic development, and political accountability. It finds that in some municipalities, with both strong grassroots organizations and nongovernmental organizations, a relatively democratic process of decentralization occurred although decentralization did not serve as an impetus for economic development. Inmanymunicipalities, however, the policy has resulted in the entrenchment of local elites, the strengthening of clientelistic relationships, and the "decentralization of corruption."