Hostname: page-component-78c5997874-mlc7c Total loading time: 0 Render date: 2024-11-19T08:20:44.313Z Has data issue: false hasContentIssue false
  • English
  • Français

The Redistributive Effects of Centralization and Decentralization Across Subnational Units

Published online by Cambridge University Press:  05 September 2022

Lucas González
Lucas González*
Affiliation:
Universidad Católica Argentina and Universidad Nacional de San Martín
Rights & Permissions [Opens in a new window]

Abstract

Core share and HTML view are not available for this content. However, as you have access to this content, a full PDF is available via the ‘Save PDF’ action button.

Several scholars have argued that decentralization benefits states and municipalities, granting them more autonomy for managing their budgets and more resources to deliver their services. Others have questioned this assertion, claiming that decentralization makes subnational units more fiscally dependent on central governments. This article argues that the fiscal impact of decentralization must be differentiated across states. It theoretically specifies and empirically demonstrates which states benefit during periods of decentralization and centralization. It argues that powerful presidents who centralize resources have imposed greater costs on more developed and fiscally independent districts (which prefer to administer their own resources and can be serious challengers to presidential power), thus relying mainly on support from less developed and more fiscally dependent provinces, which prefer more redistribution. I present empirical evidence for Argentina (1983-2004), a developing federation with strong governors and high cross-regional inequality, and discuss some implications for comparative studies on the topic.

Resumo

Resumo

Varios investigadores han argumentado que la descentralización beneficia a las unidades subnacionales, otorgándoles más autonomía para gestionar sus presupuestos y más recursos para cumplir sus funciones. Otros han cuestionado esta afirmación, alegando que la descentralización hace que las unidades subnacionales sean más dependientes fiscalmente de los gobiernos centrales. Este trabajo sostiene que debemos diferenciar el impacto fiscal de las políticas de descentralización en los distintos estados. Para ello, el trabajo especifica teóricamente y demuestra empíricamente cuáles son los estados que se benefician durante períodos de descentralización y centralización. Argumenta que los presidentes crean apoyo para las reformas centralizadoras compensando a los gobernadores que prefieren un gobierno nacional capaz de recaudar impuestos de los distritos más ricos y de redistribuir esos fondos entre ellos, imponiendo mayores costos a los que tienen mayor autonomía fiscal y que prefieren más competencias descentralizadas para administrar sus propios recursos. En el trabajo se presenta evidencia empírica para Argentina (1983-2004), una federación en desarrollo con grandes desigualdades interregionales y gobernadores fuertes, y se discuten algunas implicancias para los estudios comparados sobre el tema.

Type
Research Article
Information
Latin American Research Review , Volume 47 , Issue 3 , 2012 , pp. 109 - 133
Copyright
Copyright © 2012 by the Latin American Studies Association

Footnotes

The author is grateful to the late Guillermo O'Donnell for his advice on this work. Ernesto Calvo, Marcelo Escolar, Tulia Falleti, Martín Lardone, Marcelo Leiras, Germán Lodola, Marcelo Nazareno, and three anonymous LARR reviewers provided enormous help and insightful comments. Any mistake is my sole responsibility. Oscar Cetrángolo generously gave me access to data on Aportes del Tesoro Nacional. Santiago Alies, Facundo Galván, and Ignacio López provided valuable research assistance. Special thanks also to the Department of Political Science, the Graduate School, and the Kellogg Institute at the University of Notre Dame; Universidad Católica Argentina; and Universidad Católica de Córdoba for their financial support to conduct the research for this article and the broader project.

References

Abrucio, Fernando Luiz 1998 Os barões da federação: Os governadores e a redemocratização brasileira. São Paulo: Coleção Comentário, Universidade de São Paulo.Google Scholar
Ávila, Jorge 2006 “Propuesta de federalismo fiscal.” Unpublished manuscript, Universidad del Centro de Estudios Macroeconómicos de Argentina.Google Scholar
Beck, Nathaniel, and Katz, Jonathan N. 1995 “What to Do (and Not to Do) with Time-Series Cross-Section Data.” American Political Science Review 89 (3): 634–647.CrossRefGoogle Scholar
Beramendi, Pablo 2007 “Inequality and the Territorial Fragmentation of Solidarity.” International Organization 61: 783–820.CrossRefGoogle Scholar
Bird, Richard, Freund, Caroline, and Wallich, Christine 1995 “Decentralizing Fiscal Systems in Transition Economies.” Finance and Development 32 (3): 31–34.Google Scholar
Bolton, Patrick, and Roland, Gérard 1996 “Distributional Conflicts, Factor Mobility, and Political Integration.” American Economic Review 86 (2): 99–104.Google Scholar
Bonvecchi, Alejandro, and Lodola, Germán 2011 “The Dual Logic of Intergovernmental Transfers: Presidents, Governors, and the Politics of Coalition-Building in Argentina.” Publius: The Journal of Federalism 41 (2): 179–206.CrossRefGoogle Scholar
Brennan, Geoffrey, and Buchanan, James M. 1980 The Power to Tax: Analytical Foundations of a Fiscal Constitution. Cambridge: Cambridge University Press.Google Scholar
Calvo, Ernesto, and Murillo, María Victoria 2005 “The New Iron Law of Argentine Politics? Partisanship, Clientelism, and Governability in Contemporary Argentina.” In Argentine Democracy: The Politics of Institutional Weakness, edited by Levitsky, Steven and Murillo, María Victoria, 207–226. University Park: Pennsylvania State University Press.Google Scholar
Carvalho, José Murilho de 1993 “Federalismo y centralización en el Imperio Brasileño: Historia y argumento.” In Federalismos latinoamericanos: México, Brasil, Argentina, edited by Carmagnani, Marcello, 51–80, Mexico City: Fondo de Cultura Económica.Google Scholar
CEPAL/ECLAC (Comisión Económica para América Latina y el Caribe / Economic Commission for Latin America and the Caribbean) 1997 Economic Survey of Latin America and the Caribbean, 1996-1997. Santiago de Chile: Comisión Económica para América Latina y el Caribe.Google Scholar
CEPAL/ECLAC (Comisión Económica para América Latina y el Caribe / Economic Commission for Latin America and the Caribbean) 2005 Economic Survey of Latin America and the Caribbean, 2004-2005. Santiago de Chile: Comisión Económica para América Latina y el Caribe.Google Scholar
Cetrángolo, Oscar, and Jiménez, Juan Pablo 1995 El conflicto en torno a las relaciones financieras entre la nación y las provincias: Primera parte - Antecedentes de la Ley 23.548. Serie de Estudios 9. Buenos Aires: Centro de Estudios para el Cambio Estructural.Google Scholar
Cetrángolo, Oscar, and Jiménez, Juan Pablo 1996 El conflicto en torno a las relaciones financieras entre la nación y las provincias. Segunda parte - Desde la Ley 23.548 hasta la actualidad. Serie de Estudios 10. Buenos Aires: Centro de Estudios para el Cambio Estructural.Google Scholar
Cetrángolo, Oscar, and Jiménez, Juan Pablo 1997 Aportes del tesoro nacional: Discrecionalidad en la relación financiera entre la nación y las provincias. Serie de Estudios 21. Buenos Aires: Centro de Estudios para el Cambio Estructural.Google Scholar
Cetrángolo, Oscar, and Jiménez, Juan Pablo 2004 Las relaciones entre niveles de gobierno en Argentina: Raíces históricas, instituciones y conflictos persistentes. Serie Gestión Pública 47. Buenos Aires: Comisión Económica para América Latina.Google Scholar
Chiaramonte, José Carlos 1993 “El federalismo argentino en la primera mitad del siglo XIX.” In Federalismos latinoamericanos: México, Brasil, Argentina, edited by Carmagnani, Marcello, 81–132. Mexico City: Fondo de Cultura Económica.Google Scholar
Coppedge, Michael, and Acosta, Andrés Mejía 2001 “Political Determinants of Fiscal Discipline in Latin America, 1979-1998.” Paper prepared for the Latin American Studies Association Congress, Washington, DC, September 5–8.Google Scholar
Díaz-Cayeros, Alberto 2006 Federalism, Fiscal Authority and Centralization in Latin America. Cambridge: Cambridge University Press.CrossRefGoogle Scholar
Dillinger, William, and Webb, Steven 1999 “Fiscal Management in Federal Democracies: Argentina and Brazil.” Policy Research Working Paper 2121, World Bank, Washington, DC.Google Scholar
Eaton, Kent 2001 “Decentralisation, Democratisation and Liberalisation: The History of Revenue Sharing in Argentina, 1934-1999.” Journal of Latin American Studies 33 (1): 1–28.CrossRefGoogle Scholar
Eaton, Kent 2004 Politics beyond the Capital: The Design of Subnational Institutions in South America. Stanford, CA: Stanford University Press.CrossRefGoogle Scholar
Escobar-Lemmon, Maria 2001 “Fiscal Decentralization and Federalism in Latin America.” Publius: The Journal of Federalism 31 (4): 23–41.CrossRefGoogle Scholar
Falleti, Tulia G. 2003 “Governing Governors: Coalitions and Sequences of Decentralization in Argentina, Colombia, and Mexico.” PhD diss., Northwestern University.Google Scholar
Falleti, Tulia G. 2005 “A Sequential Theory of Decentralization: Latin American Cases in Comparative Perspective.” American Political Science Review 99 (3): 327–346.CrossRefGoogle Scholar
Ferreira, Ivan F. S., and Bugarin, Mauricio S. 2007 “Transferências voluntárias e ciclo politico-orçamentário no federalismo fiscal brasileiro.” Revista Brasileira de Economia 61 (3): 271–300.CrossRefGoogle Scholar
Figueiredo, Argelina Cheibub, and Limongi, Fernando 2000 “Presidential Powers, Legislative Organization, and Party Behavior in Brazil.” Comparative Politics 32 (2): 151–170.CrossRefGoogle Scholar
Garman, Christopher, Haggard, Stephan, and Willis, Eliza 2001 “Fiscal Decentralization: A Political Theory with Latin American Cases.” World Politics 53 (2): 205–236.CrossRefGoogle Scholar
Gibson, Edward L. 1997 “The Populist Road to Market Reform: Policy and Electoral Coalitions in Mexico and Argentina.” World Politics 49 (3): 339–370.CrossRefGoogle Scholar
Gibson, Edward, and Calvo, Ernesto 2000 “Federalism and Low-Maintenance Constituencies: Territorial Dimensions of Economic Reform in Argentina.” Studies in Comparative International Development 35 (3): 32–55.CrossRefGoogle Scholar
Gibson, Edward, Calvo, Ernesto, and Falleti, Tulia 2004 “Reallocative Federalism: Legislative Overrepresentation and Public Spending in the Western Hemisphere.” In Federalism and Democracy in Latin America, edited by Gibson, Edward L., 173–196. Baltimore, MD: Johns Hopkins University Press.Google Scholar
González, Lucas 2008 “Political Power, Fiscal Crises, and Decentralization in Latin America: Federal Countries in Comparative Perspective (and Some Contrasts with Unitary Cases).” Publius: The Journal of Federalism 38 (2): 211–247.CrossRefGoogle Scholar
Jones, Mark, Sanguinetti, Pablo, and Tommasi, Mariano 2000 “Politics, Institutions, and Fiscal Performance in a Federal System: An Analysis of the Argentine Provinces.” Journal of Development Economics 61 (2): 305–333.CrossRefGoogle Scholar
Llach, Lucas 2007 “The Economic Consequences of Unequal Federalism.” In “The Wealth of the Provinces: The Argentine Interior and the Political Economy of Agentina, 1880-1910.” PhD diss., Harvard University.Google Scholar
Magaloni, Beatriz, Díaz-Cayeros, Alberto, and Estévez, Federico 2007 “Clientelism and Portfolio Diversification: A Model of Electoral Investment with Application to Mexico.” In Patrons, Clients, and Policies: Patterns of Democratic Accountability and Political Competition, edited by Kitschelt, Herbert and Wilkinson, Steven I. Cambridge: Cambridge University Press.Google Scholar
Montero, Alfred P., and Samuels, David J., eds. 2004 Decentralization and Democracy in Latin America. Notre Dame, IN: University of Notre Dame Press.Google Scholar
Musgrave, Richard A. 1959 The Theory of Public Finance: A Study in Public Economy. New York: McGraw-Hill.Google Scholar
Nordhaus, William D. 1975 “The Political Business Cycle.” Review of Economic Studies 42 (2): 169–190.CrossRefGoogle Scholar
Núñez Miñana, Horacio, and Porto, Alberto 1983 “Distribución de la coparticipación federal de impuestos: Análisis y alternativas.” Buenos Aires: Consejo Federal de Inversiones.Google Scholar
Oates, Wallace E., ed. 1977 The Political Economy of Fiscal Federalism. Toronto: Lexington Books.Google Scholar
O'Neill, Kathleen 2003 “Decentralization as an Electoral Strategy.” Comparative Political Studies 36 (9): 1068–1091.CrossRefGoogle Scholar
O'Neill, Kathleen 2005 Decentralizing the State: Elections, Parties, and Local Power in the Andes. Cambridge: Cambridge University Press.CrossRefGoogle Scholar
Panebianco, Angelo 1988 Political Parties: Organization and Power. Cambridge: Cambridge University Press.Google Scholar
Persson, Torsten, and Tabellini, Guido 2000 Political Economics: Explaining Economic Policy. Cambridge, MA: MIT Press.Google Scholar
Pírez, Pedro 1986 Coparticipación federal y descentralización del estado. Buenos Aires: Centro Editor de América Latina.Google Scholar
Porto, Alberto 2003a “Etapas de la coparticipación federal de impuestos.” Documento de Federalismo Fiscal 2, Universidad Nacional de La Plata, Argentina.Google Scholar
Porto, Alberto 2003b “La teoría económica del federalismo fiscal y las finanzas federales.” Documento de Federalismo Fiscal 4, Universidad Nacional de La Plata, Argentina.Google Scholar
Porto, Alberto 2004 “Finanzas públicas subnacionales: La experiencia argentina.” Documento de Federalismo Fiscal 12, Universidad Nacional de La Plata, Argentina.Google Scholar
Porto, Alberto, and Sanguinetti, Pablo 2001 “Political Determinants of Intergovernmental Grants: Evidence from Argentina.” Economics and Politics 13 (3): 237–256.CrossRefGoogle Scholar
Prud'homme, Remy 1995 “The Dangers of Decentralization.” World Bank Research Observer 10 (2): 201–220.CrossRefGoogle Scholar
Przeworski, Adam, and Teune, Henry 1970 The Logic of Comparative Social Inquiry. New York: Wiley-Interscience.Google Scholar
Remmer, Karen L., and Wibbels, Erik 2000 “The Subnational Politics of Economic Adjustment: Provincial Politics and Fiscal Performance in Argentina.” Comparative Political Studies 33 (4): 419–451.CrossRefGoogle Scholar
Rezende, Fernando 2001 “Compensações financeiras e desequilibrios fiscais na federação brasileira.” In Federalismo na Alemanha e no Brasil, edited by Hofmeister, Wilhelm and Carneiro, José Mario Brasiliense, 185–200. São Paulo: Konrad Adenauer Stiftung.Google Scholar
Rodden, Jonathan A. 2006 Hamilton's Paradox: The Promise and Peril of Fiscal Federalism. Cambridge: Cambridge University Press.Google Scholar
Rodden, Jonathan, Eskeland, Gunnar S., and Litvack, Jennie 2003 Fiscal Decentralization and the Challenge of Hard Budget Constraints. Cambridge, MA: MIT Press.CrossRefGoogle Scholar
Rodden, Jonathan, and Wibbels, Erik 2002 “Beyond the Fiction of Federalism: Macroeconomic Management in Multitiered Systems.” World Politics 54 (4): 494–531.CrossRefGoogle Scholar
Rogoff, Kenneth 1990 “Equilibrium Political Budget Cycles.” American Economic Review 80 (1): 21–36.Google Scholar
Rondinelli, Dennis A., Nellis, John R., and Cheema, G. Shabbir 1983 “Decentralization in Developing Countries: A Review of Recent Experience.” World Bank Staff Working Paper 581, World Bank, Washington, DC.Google Scholar
Samuels, David J., and Mainwaring, Scott 2004 “Strong Federalism, Constraints on the Central Government, and Economic Reform in Brazil.” In Federalism and Democracy in Latin America, edited by Gibson, Edward, 85–130. Baltimore, MD: Johns Hopkins University Press.Google Scholar
Samuels, David, and Snyder, Richard 2001a “Devaluing the Vote in Latin America.” Journal of Democracy 12 (1): 146–159.Google Scholar
Samuels, David, and Snyder, Richard 2001b “The Value of a Vote: Malapportionment in Comparative Perspective.” British Journal of Political Science 31 (4): 651–671.CrossRefGoogle Scholar
Snyder, Richard, and Samuels, David J. 2004 “Legislative Malapportionment in Latin America: Historical and Comparative Perspectives.” In Federalism and Democracy in Latin America, edited by Gibson, Edward, 131–172. Baltimore, MD: Johns Hopkins University Press.Google Scholar
Souza, Celina 1997 Constitutional Engineering in Brazil: The Politics of Federalism and Decentralisation. London: Macmillan.CrossRefGoogle Scholar
Thelen, Kathleen, and Steinmo, Sven 1992 “Historical Institutionalism in Comparative Politics.” In Structuring Politics: Historical Institutionalism in Comparative Perspective, edited by Steinmo, Sven, Thelen, Kathleen, and Longstreth, Frank, 1–32. Cambridge: Cambridge University Press.Google Scholar
Tiebout, Charles M. 1956 “A Pure Theory of Local Expenditures.” Journal of Political Economy 64 (5): 416–424.CrossRefGoogle Scholar
Tommasi, Mariano 2002 “Federalism in Argentina and the Reforms of the 1990s.” Documento de Trabajo 69, Centro de Estudios para el Desarrollo Institucional, Buenos Aires.Google Scholar
Tommasi, Mariano, Saiegh, Sebastián, and Sanguinetti, Pablo 2001 “Fiscal Federalism in Argentina: Policies, Politics, and Institutional Reform.” Economia 1 (2): 157–211.Google Scholar
Treisman, Daniel 2000 “Decentralization and Inflation: Commitment, Collective Action, or Continuity?” American Political Science Review 94 (4): 837–857.CrossRefGoogle Scholar
Treisman, Daniel 2007 The Architecture of Government: Rethinking Political Decentralization. Cambridge: Cambridge University Press.CrossRefGoogle Scholar
Weingast, Barry R. 1995 “The Economic Role of Political Institutions: Market-Preserving Federalism and Economic Growth.” Journal of Law, Economics, and Organization 11 (1): 1–31.Google Scholar
Wibbels, Erik 2005a “Decentralized Governance, Constitution Formation, and Redistribution.” Constitutional Political Economy 16 (2): 161–188.CrossRefGoogle Scholar
Wibbels, Erik 2005b Federalism and the Market: Intergovernmental Conflict and Economic Reform in the Developing World. Cambridge: Cambridge University Press.CrossRefGoogle Scholar
Willis, Eliza, Garman, Christopher da C. B., and Haggard, Stephan 1999 “The Politics of Decentralization in Latin America.” Latin American Research Review 34 (1): 7–56.Google Scholar