The Politics of Decentralization Level: Local and Regional Devolution as Substitutes

Abstract

Most contemporary decentralization has occurred at the local (district) rather than the regional (provincial) level. Why? We advance a theory highlighting the political incentives of central authorities to bypass the regional tier of government in favor of decentralizing to smaller, more fragmented units. Regional decentralization can capitalize on economies of scale and scope in public service provision, but it also enables political opposition to scale more effectively. Local decentralization provides some of the benefits of regional decentralization at less political risk, making it an imperfect but attractive substitute for central authorities. Drawing on cases from Africa and Latin America, we discuss when and how strategic local decentralization can be an effective strategy to maintain political control in divided societies, why sometimes governments may instead opt for regional decentralization or (re)centralization, and how the choice of decentralization level depends on political geography and history as well as economic factors.

Keywords: decentralization, federalism, political conflict, developing countries, Africa, Latin America

JEL Classification: H70, H77, P48, R50