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Federations Magazine Article
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Special Section: Decentralization and devolution in non-federal countries
JUNE | JULY 2008 Federations
REUTERS/David Mercad o
SPECIAL SECTION : Decentra lizati on and Dev oluti on in non-federa l countries
Bolivians in Santa Cruz celebrate after 85 per cent voted “Yes” for autonomy on May 4, 2008. The vote for autonomy of Bolivia’s richest region
went against President Evo Morales.
Decentralization may make
governments more responsive
to local needs
While Federations ma gazine normal y features articles about
the approximately 28 federal countries in the world, there are
also many other countries that have granted or delegated
powers to their smaller regional units.
In this issue of Federations, we look at the state of decentralization
in five such non-federal countries, the three South
American nations of Colombia, Bolivia and Peru as well as
Japan and Morocco.
Decentralization means the ceding of certain administrative
powers to regions within a country but without the
granting of political and fiscal powers.
The five countries, to varying degrees, have decided and
are attempting to bring the governing process closer to the
people being governed.
Certain so-called ‘unitary” governments have existed for
centuries with all the important powers concentrated in their
national government, but either to meet regional demands
or to make the business of government more efficient, have
chosen to “devolve” powers to another order of government.
Witness the U.K.’s devolved governments in Scotland,
Wales and Northern Ireland after elections held in 2007.
Devolution is a method of decentralization which
includes not just a shift in administrative decision-making,
but also political and fiscal decentralization as well. As such,
it is the most developed form of decentralization short of
JUNE | JULY 2008 Federations
b oli v ia
By Fran z X. Barri os Suve lza
hen socialist candidate Evo Morales became
the first indigenous president of Bolivia in
2006, with a mandate to bring about sweeping
change, there were expectations from
his supporters that he would do great things.
Bolivia is a society divided along economic
and ethnic lines. Morales’s supporters are also
indigenous, and are mostly economically underprivileged.
The challenge is significant. Bolivia is one of the poorest
countries in South America and the country of 9.2 million people
had a shopping list of expectations.
On one side, indigenous peoples, mostly in the mountainous
western regions, want improved democracy, a stronger
negotiating position with the multinational oil and gas companies
and a total reform of the constitution with a formal
recognition of indigenous rights. Indigenous Bolivians make
up as much as 70 per cent of the country’s population and are
Morales’s strongest supporters.
On the other side, wealthier Bolivians in the eastern lowlands,
mostly of Spanish and mixed descent, want the national
government in La Paz to agree to greater autonomy for their
Initially in early 2006, these two groups had an uneasy peace
under Morales’ leadership. But many of Morales’ supporters
wanted him to dismantle so-called “neo-liberalism,” the policy
of unfettered markets and small governments that do not interfere
with the flow of capital and goods. That is where the two
first collided after Morales nationalized the oil and gas sector in
May 2006.
In the east, which chafes under Morales’s rule, four out of
Bolivia’s nine regions wanted to block Morales from heavily taxing
their soy plantations and cattle ranches, and hoped,
through the process of devolution, to gain a larger share of their
natural gas revenues, which are now under Morales’ control.
The pro-Morales forces – led by his Movement Towards
Socialism party – want the wealth generated by those eastern
regions to raise the standard of living elsewhere in the country.
Class, ethnic conflicts
paralyze Bolivian reforms
President Morales dithers on decentralization
SPECIAL SECTION : Decentra lizati on and Dev oluti on in non-federa l countries
constitutional self-rule.
The five countries under study in this edition of the magazine
are at different points in the continuum between basic
decentralization and full-fledged devolution. None are facing
the imminent secession of any of their sub-national
Of the five, Japan is among the least devolved. The
Economist magazine recently commented that, “more than
any big rich democracy, Japan concentrates political power
and financial resources at the centre.”
However, earlier this year a government panel recommended
the quasi dismantling of the centrally governed
state that has existed since 1867. The proposal would limit the
central government to 16 areas including diplomacy, national
security and trade policy. Under the plan, regional governments
would also have responsibility for areas such as public
works and industrial promotion.
In Morocco the government is seeking to defuse the anger
of radical youth and put a halt to terrorist bombings that
shocked the country five years ago. Part of its strategy is to
give responsibility for social and economic development to
the local level.
In the South American countries, Colombia has provided
significant funding to fuel decentralization, but the reforms
do not come close to resembling devolution.
In Bolivia, populist President Evo Morales is fighting a losing
battle against sub-national regions in the east of the
country voting to transfer national fiscal powers to the
regions. For Morales, this decentralization is a power grab by
wealthy landowners and a means for them to duck their tax
burden. Morales wants that extra tax revenue to help the
poorer, largely indigenous 70 percent of the population.
Meanwhile, in Peru, decentralization has advanced in fits
and starts over the last 29 years. Martin Tanaka and Sofia Vera
of the Institute of Peruvian Studies, write that decentralization
in their country has been chaotic and thus far failed to
establish a coherent and orderly institutional framework for
providing government services to the people.
Franz X. Barrios Suvelza is a consultant with the UNDP in La Paz,
JUNE | JULY 2008 Federations
At first it looked as if both of these two irreconcilable goals
could be achieved. But neither the Morales forces nor the eastern
regions were prepared to compromise.
Autonomy advocates confront Morales
Unrest with the new president and his programs had been
brewing for some time in the east. In July 2006, Morales’ opponents
won a first round of referendums supporting the
principle of provincial autonomy in four regions in eastern
Bolivia. It served as a dress
rehearsal for the definitive
referendums soon to come
and a sharp warning to
Morales. The stage for the
autonomy movement was set
in motion back in December
2005 when, in the first democratic
regional elections since
1825, six of Bolivia’s nine
regions elected governors
from parties opposed to
Morales’s socialist party.
Time slips away
Meanwhile, while the eastern
seats were preparing for
additional referenda, time
was slipping away on Morales
and his bid to have a new
constitution adopted rapidly,
a constitution that he promised
would entrench political
and economic rights for his
indigenous supporters.
It took 18 months of frustrating
sessions of the Constituent Assembly to complete a draft
constitution. That constitution, written exclusively by the progovernment
majority and a few allies, was adopted amid
tumult. The referendum on the constitution, originally scheduled
for May 4, 2008, was put on hold by the government after
the electoral court held that the referendum could not be organized
in time for that date. No new date has yet been set.
In the constitutional negotiations, the constituent assembly’s
pro-Morales forces refused until the last minute to cede a
modicum of legislative powers to the regions in the new constitution.
The pro-government faction feared that allowing such
legislation would mean giving up political powers that they just
could not concede, and wrongly calculated that the demand for
autonomy was simply manoeuvring by the wealthy
In a last-minute effort by Vice President Alvaro Garcia to
reach agreement with the eastern factions, the final draft of the
constitution introduced legislative powers for the subnational
sphere – in what was a concession to the regions seeking greater
autonomy. But those powers were not deemed satisfactory by
the landowners. For their part, the pro-Morales forces inserted
into the draft constitution a variety of provisions such as autonomous
entities, as well as regional and indigenous ones, which
created a complex and potentially unmanageable network of
In an interview with the
BBC on Apr i l 24, 2008,
Morales accused his opponents
in the eastern regions
of really being interested in
money, not in devolution,
claiming that the more
wealthy easterners only
became interested in devolution
when they lost control of
the central government.
Losing control
“If we look at history, we see
that there have always been
demands for federalism
when the rich minority have
lost control of central government,
but then when they get
it back again, they forget all
about autonomy.”
The next clash between
the two forces took place on
May 4, 2008. The subnational
region of Santa Cruz held a
referendum, asking voters to approve a statute of autonomy
passed by the region’s legislature the previous December. The
referendum was approved by 85 per cent of the voters. Morales’
supporters had called upon people in Santa Cruz to boycott the
vote, but without much success.
In April, Morales had promised that the new constitution
would guarantee devolution of powers to the regions, according
to the BBC:
“But it will be autonomy for the people, not autonomy for the
rich elite in Santa Cruz.”
The next showdown will likely come right after the date is set
for the referendum to approve the draft constitution. The new
continued on page 22
The Bolivian autonomy
referendum of 2006
The question to voters was: “Do you agree, within the framework
of national unity, with giving the Constituent Assembly
the binding mandate to establish a regime of regional autonomy,
applicable immediately after the promulgation of the
new Political Constitution of the State in the regions where
this referendum has a majority, so that their authorities are
chosen directly by the citizens and receive from the National
Government executive authority, administrative power and
financial resources that the Political Constitution of the State
and the Laws grant them?” – from the referendum of July 2,
2006, in which the four eastern regions voted a solid “Yes.”
An indigenous woman votes in the referendum in May 2008. The proautonomy
forces in Santa Cruz won the vote.
REUTERS/Andres Stapf
SPECIAL SECTION : Decentra lizati on and Dev oluti on in non-federa l countries
By Purnendra Jain
he ned for decentralization has become a hot
political issue in Japan these days.
Yet political and bureaucratic complexity, hand
in hand with competing and irreconcilable political
interests, hinder the devolution of power to lower
units of government in Japan’s still strongly unitary
So strong that the Economist magazine commented in a
recent article that, “more than any big rich democracy, Japan
concentrates political power and financial resources at the
Japan’s local governments have struggled for years to secure
both financial independence and political autonomy. Recently,
demands for decentralization have grown louder than ever. The
need for change is manifest.
In April 2008, a Japanese government panel recommended
dismantling the centrally governed state that has existed since
the restoration of the Meiji Dynasty in 1867. The proposal would
limit the central government to 16 competencies including
diplomacy, national security and trade policy. All other powers
would go to the regions or municipalities. Under the plan,
regional governments would also have responsibility for areas
such as public works and industrial promotion.
But nothing will be rushed. The recommendations are part
of an interim report. The panel is expected to take another two
years to table its final recommendations.
With one of the most rapidly greying populations in the
world, Japan’s highly centralized structure is struggling to cope
with evermore diverse demands for services. The pressures of
globalization make it increasingly difficult for the local govern-
Japanese panel calls for
power shift to regions
Decentralization process picks up momentum
j apan
Purnendra Jain is professor and head of Asian Studies at the
University of Adelaide in Australia.
JUNE | JULY 2008 Federations
Japanese Prime Minister Yasuo Fukuda faces demands for more powers from the country’s mayors and local governments.
Credit : REUTERS/Lee Jae Won
SPECIAL SECTION : Decentra lizati on and Dev oluti on in non-federa l countries
ments to operate effectively. Heavy dependence on their
central masters leaves the subnational governments usually
impeded, cash-strapped and often hamstrung.
The road to decentralization in postwar Japan has been long
and winding. It is marked with plenty of initiatives, ideas, plans
and recently even the passage of legislation in support of greater
autonomy for local governments.
The central government, fuelled by the work of the panel, is
now seriously considering a total restructuring of the current
two-tier structure consisting of 47 prefectures and a few thousand
municipalities classified as cities, towns and villages.
Cities cut in half
In 2006, centrally-designed – and in some cases unwelcome –
amalgamations halved the number of municipalities to 1,820.
The move was aimed to improve efficiency and economies of
scale by enabling more effective delivery of services to local
A new proposal considers redefining the current prefectural
boundaries to form what Japanese call doshusei (expanded
regions or states).
These states could number between 9 and 13 and could have
greater fiscal and functional autonomy than prefectures currently
hold. But it is strewn with obstacles while stakeholders
struggle to protect their turf. Ironically, powers of the central
government would be devolved to more centralized subnational
Following Japan’s defeat in World War II, the Allied Powers
(mainly the U.S.) occupied Japan. In line with Occupation aims
to decentralize governance, the 1947 Constitution enshrined
the principle of local autonomy. For the first time in Japan’s
modern history, local self-governance gained constitutional
With the end of the Occupation in 1952, ruling conservative
parties at both central and local levels rejected decentralization
by the Occupation authorities and flagrantly recentralized as
much as the new constitution allowed. Japan’s rapid economic
takeoff in early postwar served to legitimize this reversal by creating
broad acceptance of a centralized state as the essential
means to national economic growth.
This rapid economic growth through industrialization in the
1950s and 1960s also became a spur to local communities seeking
more autonomy, as they struggled to address severe social
problems like urban housing shortage and inadequate health
and family welfare. The conservative government of the Liberal
Democratic Party focused on continued economic growth and
ignored ordinary people’s suffering. But resistance inspired a
strong, creative and motivated grassroots movement against
the central government’s neglect of urban living conditions.
A new breed of left-leaning local chief executives was swept
into office through subnational elections. They were not afraid
to lock horns with the central government on issues vital to their
local communities, with which the central government was
demonstrably way out of touch.
They bravely initiated innovative policies in the interests of
local residents, even when that meant flying in the face of central
government policies. Their strong will, forthright policy
initiatives and concern to truly serve the localities that elected
Continued on page 21
Japanese walk down a Yokohama street. Citizens living in the countryside and cities outside Tokoyo now have more control over their local
JUNE | JULY 2008 Federations
REUTERS/Pawel Kopc zyns ki

SPECIAL SECTION : Decentra lizati on and Dev oluti on in non-federa l countries
Ana Maria Bejaran o
espite its lon g-standin g battle with dru g lords and
factional fighting, Colombia has succeeded in instituting
the direct election of its mayors and governors
in a 20-year democratisation process that is still
changing the face of the nation in 2008.
The move to direct elections of mayors and governors
has had a lasting impact on Colombia’s
politics. It opened the political system to many groups. New
political parties and movements have sprung up, vowing to
clean up public administration, root out corruption, end oneman
rule by city mayors, and offer more accountability.
Previously, mayors were appointed by state governors, who
were appointed by the president.
But the changes are not enough to call the decentralization
process “devolution.” Colombia’s 32 regions and its cities have
few powers, though these powers are set out and fully protected
in the constitution adopted in 1991. There are few taxes that the
regions and cities can raise. However, the changes in a quarter
century have been impressive.
One local star in the transfer of powers to the cities is Sergio
Fajardo, a mathematics professor who was a popular mayor of
Medellin from 2003-07. Fajardo focused on helping the poor,
building public infrastructure and improving their commute to
work and is credited with the turnaround of a city once considered
the most dangerous in Latin America. Medellin is no
longer viewed as the drug capital of South America, thanks in
part to Fajardo.
The people today expect far more from municipal administrations
than they did two decades ago. This is true of the major
cities, but also of the many mid-size urban centres, which have
undergone considerable transformations, mainly because of
incentives created by democratization and the increasing
power of the municipal order of government.
The current decentralization campaign began in Colombia
in the mid 1980s. It was part of Latin America’s return to democracy
and was a result of pressures to diminish the size of central
governments. It ushered in a region-wide trend toward leaner,
more decentralized states.
Forces disarm
Colombians were weary of decades of internal warfare.
Decentralization was promoted as a means of instilling peace
among the various warring factions and as an incentive to lay
down their arms and in exchange, gain powers in regional
It was viewed as a win-win by the right wing of the
Conservative party and originally, also by the extreme left, represented
by various guerrilla groups – particularly the powerful
rebel group known as the FARC.
The Conservative Party government of President Belisario
Betancur (1982-86) initiated peace talks with three guerrilla
groups in 1983. Within this context, the proposal to initiate a
decentralization process took off. Decentralization – which
soon became entrenched in the Constitution of 1991 – was seen
as bait to lure guerrilla groups to the negotiation table and, by
others within Congress, as a way to enhance their political prospects
once the Liberals returned to power, as they did in 1986.
In 1998, Conservative President Andres Pastrana began a
series of peace talks with FARC, resulting in a so-called “demilitarized
zone” for the rebels in Colombia. But after more than
three years of negotiations, Pastrana ended the talks in
February 2002, following a series of high-profile guerrilla
attacks by FARC. The Colombian army then moved in to occupy
the demilitarized zone.
FARC then responded with the kidnapping of such high-
25 years of
colom b ia
Reforms changed the face of
cities but underfunded key
Ana Maria Bejarano, assistant professor of political science at
University of Toronto, was previously professor of political science at
Universidad de los Andes in Bogota, Colombia.
JUNE | JULY 2008 Federations
Colombia’s President Alvaro Uribe gestures during a meeting with U.S.
Commerce Secretary Carlos Gutierrez. Uribe launched a raid on a FARC camp
in Ecuador in April, 2008, causing protests from several Latin American
Credit : REUTERS/Albeir o Lopera
SPECIAL SECTION : Decentra lizati on and Dev oluti on in non-federa l countries
level hostages as Colombian Senator Ingrid Betancourt at the
end of February 2002. This action raised the ante. Cities all
across the nation mounted massive demonstrations with
Colombians of all stripes and ideological persuasions opposing
the kidnappings.
Civil conflict in Colombia was a confusing array of overlapping
alliances. Guerrilla groups and so-called “paramilitary”
groups had been funded by the drug trade for years. Colombian
drug cartels even used miniature submarines costing $2 million
each to make cocaine deliveries. Although many were
captured by the Colombian or U.S. navies, those subs that
slipped through were able to deliver $250 million worth of
cocaine to Mexico.
On the extreme right, the 26,000-member AUC paramilitary
group laid down its weapons between 2002 and 2006 in return
for benefits such as reduced jail terms. But after demobilizing,
the paramilitary groups strengthened their networks of political
power and control of land.
Municipal elements led reform
Like some other Latin American countries, decentralization in
Colombia initially had a strong municipal bias. A new statute
for municipal administration was approved in 1985 and the
direct election of mayors was approved in 1986.
Significant funding from the central government fuelled the
decentralization process.
Juan Camilo Restrepo, the former minister of finance, said in
1998, that “close to a third of the central government’s increased
spending during the 1990-98 period is accounted for by the
accumulated additional obligations related to territorial transfers,
some entrenched in the constitution, others coming from
ordinary law.”
Some argue that the constitution drafted in 1991 by an
elected constituent assembly changed the dynamics of the
decentralization process to one of devolution by giving regional
governments a few constitutional areas of competency,
although their taxation power was limited only to taxes on
alcohol, tobacco, and lotteries.
The constituent assembly that preceded the ’91 constitution
represented multiple minorities – including the left, the
indigenous movement and the non-Catholic Christian population
– which banded together with progressive factions of the
Liberal party to implement a dramatic opening of the
Colombian political system.
Key changes involved extending the decentralization process
to the regional governments, with governors elected by
popular vote for the first time in 1991.
The constitution also included rules mandating that a fixed
(and increasing) proportion of national revenue be transferred
to subnational entities, thereby guaranteeing that political and
fiscal decentralization would go together. This
has sparked considerable debate, with some
blaming the fiscal deficits of the late 1990s on
this revenue distribution scheme.
Simplifying revenue transfers
A 2001 law simplified revenue transfers and
slashed the proportion of national revenue
going directly to regions and municipalities, to
37.2 per cent from 46.5 per cent. The debate on
transfers continues, with the central government
seeking to cut them and the opposition
defending the gains entrenched in the 1991 constitution.
Discussion has focused on rules for
improving revenue distribution rather than
reversing the process of decentralization.
The process of decentralization has had
important long-term consequences. It has
opened the system to new actors who were previously
excluded and has created a vibrant
political scene at the regional and local levels.
New opportunities for popular participation
have opened as well as new avenues for advancing the political
careers of leaders from outside the capital city of Bogota. Since
the reforms, many national level leaders have arrived on the
scene after starting their political careers as mayors or
Not all is positive, however. Along with opening the political
system to new entrants, some of the most harmful political
forces (including drug dealers, paramilitary groups and
remaining guerrilla groups) took full advantage of the political
spaces opened up by decentralization, and have become
entrenched centres of power.
As the stakes have been raised in local and regional elections,
violence and intimidation during electoral contests have
reached new heights. New-found autonomy from the central
government has not always furthered the best interests of the
people, and has often served regional elites, local politicians, or
both. Additionally, although the mayors and governors have
higher levels of education than their predecessors, there are
nonetheless troubling reports of increased corruption and
abuse of public funds. The good news though is that with new
electoral accountability, cities have seen unpopular mayors
thrown out. Overall, the balance seems to weigh more heavily
on the positive side.
continued on page 32 JUNE |
JULY 2008 Federations
A banner in Medellin calls for the release of Colombian politician Ingrid Betancourt,
who was kidnapped by FARC guerillas in February 2002.
Credit : REUTERS/Fred y Amari les
SPECIAL SECTION : Decentra lizati on and Dev oluti on in non-federa l countries
By Alae Eddin Serrar
evolution in Morocco is the focus of a momentous
national debate that if successful, could result in
bringing government services much closer to this
restive people.
The focus of the debate is aimed at amending
the law governing municipalities. With many social
and political actors involved in the discussions, including ordinary
citizens, elected officials, government and civil society
and none other than King Mohammed VI himself, changes to
the law could come soon. Others could follow.
When King Mohammed succeeded his father to the throne
in July 1999, there was an atmosphere of optimism and the process
of democratization began. But the pace of the
democratization and decentralization has not always kept up
with people’s expectations.
The benefits of the reforms of 1999 and the impending
changes in governance and services for poorer citizens did not,
nor could they possibly, change Morocco’s social conditions
overnight. More than 4.2 million of the country’s 34 million
people live on less than $1 per person a day. As well, 38 per cent
of the population is illiterate, 1.7 million people live in shanty
towns and 11 per cent of working-age young people are
Terrorists attack
Little more than five years ago, with these alarming social indicators
as a backdrop, several radical Islamist groups were
successfully recruiting underprivileged youth in Morocco. In
May 2003, the deadliest terrorist attacks in the country’s history
conflagrated in Casablanca. A total of 12 suicide bombers died,
along with 33 civilians, and 100 were injured. Another seven
suicide bombers blew themselves up in Casablanca in March
and April 2007. In both cases, most of the bombers were from
the shanty towns of Sidi Moumen in the suburbs of Casablanca.
Response to roots of the attacks
The king stepped in. In Morocco, the king’s support is often crucial
to whether a reform project goes through or not. In formal
politics, under the constitution of Morocco, the king can
appoint the prime minister and the cabinet after a democratic
election, and can dismiss any cabinet minister. In informal politics,
the involvement of the monarch can launch a political
project on its way to success.
After the first attacks, the king launched the National
Initiative for Human Development to place social issues at the
top of the country’s priorities. This initiative was aimed at
empowering citizens to participate in decision-making at the
local level.
In a speech in July 2006, the monarch said there was a strategic
need to evaluate Morocco’s “experience in local democracy,
and to explore possibilities to enlarge the space for democratic
Morocco dabbles with
devolution as means to quell
Cities to gain powers, regions next
Alae Eddin Serrar is program manager at the USAID/State University
of New York Parliament Support Project in Morocco. He graduated
from Al Akhawayn University in Ifrane with a Master of Arts in
International Studies and Diplomacy.
JUNE | JULY 2008 Federations
REUTERS/Aladin Abde l Nab y
King Mohammed VI of Morocco makes a point at a recent Arab League
summit in Tunisia. The King’s participation is often the key to the
success of a project in Morocco.
SPECIAL SECTION : Decentra lizati on and Dev oluti on in non-federa l countries
practice, (and) to give a new impulse to decentralization and
regionalization dynamics so that decentralized management of
public services becomes a basic rule.”
In layman’s terms, the king was calling for broadening of
democracy in his country and for decentralization.
In light of this speech, and with municipal elections coming
in 2009, the Ministry of the Interior launched a national debate
to reform the law governing municipalities in Morocco, known
as the Communal Charter.
This was to be an important step toward enabling local governments
to improve delivery of services to citizens and create
a more inclusive and transparent management style at the local
level. Since then, more than 20 legal experts have fanned out,
holding workshops in the country’s 16 regions, involving the
leaders and members of local communes, members of civil
society groups and citizens.
The discussions and the debate centre on one topic: reforming
the Communal Charter. These consultations are focusing
on clearly defining powers at the subnational level; protecting
local autonomy; and providing the necessary funding and
trained staff for
m u n i c i p a l
Clearer powers
Subnational gove
r n m e n t s i n
Morocco come in
three forms:
• the municipality
(led by a mayor
elected for a six–
year term),
• the province (led
by an appointed
• the region (led
by a regional
g o v e r n o r
appointed by
the king).
While the regions have been given significant responsibilities
in social assistance and economic development matters,
municipalities have been granted similar responsibility over
socio-economic development through the 2002 Communal
Charter. Yet, this law did not specify how overlapping responsibilities
in socio-economic matters are to be shared.
Nor did the Communal Charter specify functions or relations
within the locally elected councils in major cities like
Casablanca, Rabat, Marrakech and Tangiers. In these four cities,
there is a single municipal council – headed by an elected
mayor with exclusive fiscal authority – which sits atop several
local municipalities.
In Morocco, a local municipality (commune in Moroccan
French) can be either an independent municipality in the
countryside or a municipal district within a large metropolis.
The resulting ambiguity between the city and the municipalities
has been a key obstacle confounding efficient and
democratic decentralized management.
Protecting local autonomy
Morocco’s urban and rural municipal governments are governed
primarily by Article 69 of the Communal Charter which
contains a long list of municipal council decisions that require
pre-approval by the Ministries of Finance and the Interior, in
the case of urban communes; and of the regional governor or
the governor in the case of rural communes. This mandatory
pre-approval covers almost every expenditure line item. It even
extends to the naming of city streets. The law defines the precise
procedures that need to be followed for such pre-approval
and stipulates sanctions for any violation of the procedures by
the local communes.
During one confrontation in 2006, the governor of the city of
Meknes rejected the program that the elected municipal council
had developed to reflect local citizens’ priorities, which
council members had promised to address during the election
campaign. Instead, the governor used the nationally determined
plan, as set
by the cent ral
author i t ies, t o
design and implem
e n t l o c a l
d e v e l o pme n t
Prof. El Manar
E s s l i m i o f
Mo h amme d V
University in Rabat,
one of the specialists
working on the
reforms of the

C o m m u n a l
Charter, said the
coming reforms
will have the effect
of pressuring central
authorities for
“less concern about
legal compliance
with formal rules at
the local level, and a more strategic role in monitoring and evaluating
local performance in delivering services.” He added that
there will also be provisions to encourage citizens’ involvement
as the most efficient mechanism for accountability and
Saad Guerrouani, the youngest member of the municipal
council of Martil, a town in northern Morocco, stated in an
interview that “the new reforms should necessarily reflect the
trust that citizens have expressed when they voted for us.”
“Heavy control hinders our capacity to program and execute
investments in a timely and effective manner.”
“Our hands are now handcuffed … they should be released
so that we can serve our communes better,” Guerrouani added.
Continued on page 32
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A victim of the May 2003 suicide bombing in Casablanca is carried to an awaiting hearse.
Thirty-nine people were killed and scores injured in the bombings.
REUTERS/Joelle Vass ort
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By Mart ín Tana ka and Sofía Vera
an y Peru vians want decentralization for one
reason: to counterbalance the overwhelming
influence of Lima, the country’s capital.
But the path to decentralization is a rocky
one, and the end is nowhere in sight.
Lima’s 8.5 million inhabitants make up 26
per cent of the country’s total population. The city produces 46
per cent of the country’s goods and services. People outside the
capital want more power to be devolved to its 25 regions – and
want some of the public and private investment that now is
going to Lima.
The 28-year decentralization movement has advanced in fits
and starts. The movement began when the right to hold local
elections was restored in 1980.
Then in 1988 the creation of regions began with the election
of regional authorities that were meant to replace the 24 administrative
units called departments. The regional governments
Peru’s decentralization stalled
by protests and distrust
Voters support devolution but not amalgamation
Martin Tanaka has a PhD in Political Science (FLACSO Mexico), and is
a senior researcher at the Institute of Peruvian Studies.
Sofía Vera is a sociologist and research assistant at the Institute of
Peruvian Studies.
Food kitchen volunteers from an outlying province demonstrate in Lima for more funding, in April 2008. Regions outside Lima have been
campaigning for more powers and public finances.
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REUTERS/Reuters Photographer
JUNE | JULY 2008 Federations
were then dissolved but were brought
back in 2002, when Peru was divided into
2 5 “ re gions”, replac ing the ol d
A constitutional reform allowed for
regional elections in 2002. But the goal of
merging the 25 regions into fewer, larger
regions has not yet succeeded.
One of the regions leading the push for
decentralization today is Lambayeque,
where Yehude Simon was re-elected governor
in 2006.
Simon is one of the successful leaders
of the decentralization movement in
Peru. One of the main projects of his government
is completing the final phases of
the Proyecto Olmos reservoir for farmers,
which stores and distributes 2,050 million
cubic meters of water each year.
In April, after a meeting with 23
regional governors and Peruvian
President Alan Garcia, Simon said that
the decentralization of Peru was proceeding
satisfactorily, despite its many
“The state has acknowledged that
some things aren’t working … this
encounter should put an end to the criticism
from those who wish the failure of
Movement is fragmented
The decentralization process is a reflection
of Peru’s political fragmentation.
When new regional and local elections
were held in November 2006, 18 of the
country’s 25 regions elected governments from regional political
parties. In only seven of the regions did candidates affiliated
with national political parties form governments.
An important setback for decentralization occurred in
October 2005, when Peruvians voted in a referendum to turn
down the amalgamation of many smaller regions into a few
larger ones. This step was seen as necessary in order to give
more power to the regions. However, people in the regions
feared that amalgamation would mean a weakening of their
autonomy and lead to consolidation of the power of the bigger
The process of decentralization has nearly a 30-year history
in Peru. It started just after the 1979 Constitution was adopted.
The ’79 Constitution, adopted by a popularly elected assembly,
stated that the country should establish regions with elected
authorities. In the Constitution, the regions and local municipalities
were described as governments with administrative
and economic autonomy from the central government.
Mayors elected
When the military government finally ended in 1980, the mayors
for all local assemblies in the country’s provinces and
districts were directly elected by popular ballot.
That same year, 1980, a terrorist group called “Shining Path,”
started a campaign of attacks which they called “revolutionary
war.” Their incursions inflicted severe harm to the decentralization
process by striking at the roots of the Peruvian government
and assassinating mayors in several rural districts. Shining Path
started its activities in one of the poorest regions in Peru,
Ayacucho, and spread over almost the entire country.
The destabilization caused by the Shining Path helped stall
the decentralization process until 1988, when a number of
regions were formed and governors elected.
But devolution ground to a halt under President Alberto
Fujimori, who became president in 1990. In 1992 he led a coup
d’état, shutting down the national Congress and putting an end
to regional governments.
Fujimori maintained a strongly centralist outlook in the relationship
between the central government and the regions. Use
of government resources, meanwhile, was concentrated in the
hands of the President and his staff.
Meanwhile, in the countryside, the Shining Path began losing
the support of the peasants, leading to the capture in 1992 of
its leader and the collapse of the uprising.
The once-popular Fujimori became embroiled in a
corruption scandal, and he fled the country in 2000. His departure
laid the groundwork for a revival of democratic principles
Peru’s former president Alberto Fujimori testifies during his trial in Lima on Feb. 20, 2008.
Fujimori shut down regional governments while in power.
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in general, as well as a rebirth of the decentralization initiatives.
A new common cause took shape, which considered decentralization
not only good for achieving balanced development, but
also a potential bulwark against arbitrary and abusive
centralization of power.
With the election of Alejandro Toledo as president in 2001,
decentralization was taken up once again. One of the new government’s
first measures was to call elections to constitute
regional governments.
As there were no territorial boundaries for the regions, temporary
borders were drawn up, based on the 25 existing units.
The results of the 2002 regional elections favoured the principal
opposition party, the populist APRA party, which won a
plurality of the vote in 12 regional assemblies – nearly half of the
Initiative failed
In addition to needing a better definition of their tasks and
responsibilities, the new assemblies also needed a roadmap for
merging into larger regions.
The creation of a smaller number of larger regions out of the
25 existing ones would have meant more funds and staff in the
respective regions and a greater potential for economic development.
Another gain would have been the potential for the
building of a stronger regional identity in fewer regions.
However, the initiative failed as it ran into a brick wall of resistance
from the central government.
The merger proposals were voted upon in popular referendums
in 16 regions. The regions and provinces feared being
gobbled up into the larger regions. The result was that every referendum
to create five new larger regions from the 16 smaller
ones was defeated in October 2005.
Decentralization in today’s Peru, which began with a chaotic
regionalization process, has thus far failed to establish a coherent
and orderly institutional framework for delivery of
government services to its citizens. Many of the regional movements
are not well rooted. Some also suffer from poor
management. Nevertheless, some regional movements do
show potential and their efforts could lead to success.
Some regions believe that gaining the power to collect their
own taxes is the next logical step on the road to greater
Governor Yehude Simon of Lambayeque is of that view: “The
transfer to the regions of functions along with funds is indispensable
for moving ahead with the decentralization process,
and what would be a better way to achieve that than by allowing
the regions to directly collect taxes themselves?”
But to truly succeed, the elected officials and the civil servants
in these regions need to acquire the ability to promote and
sell development programs that will create jobs and sustainable
development. The regions and the national government also
need to restart the regional merger process and embark on
reforms for enhanced intergovernmental relations among
national, regional and municipal orders of government. Peru
must address these challenges or face more conflict and social
protest, both of which it has suffered enough from in recent
Japan [From pa ge 14]
them produced de facto decentralization and a vibrant democracy
at grassroots level.
Here at last was a counterbalance to the national government.
Yet no constitutional or major legal changes were
introduced to promote decentralization. In essence, new policies
were adopted within the highly centralized structure.
Soon the local activism lost the wind from its sails. The
national economic boom and resulting widespread prosperity
from the late 1970s enabled the central government to rein in
the pressure for reform and, importantly, to retain its tight fist
on local administrations.
Economy stagnates
Then came the 1990s when Japan’s economy began to stagnate,
an era that injected a fresh enthusiasm for reviving decentralization.
And, while some advances were made in the 1990s,
many tasks remained.
This issue became part of Prime Minister Junichiro Koizumi’s
(2001-2006) broader agenda of reform and restructuring and
continued under the Shinzo Abe administration (2006-2007).
Prime Minister Yasuo Fukuda, who came into power in 2007,
has endorsed his predecessors’ initiatives.
Consequently, a new Decentralization Reform Promotion
Act was legislated in 2006 and the government set up a
Decentralization Reform Promotion Committee in April 2007 to
consider issues related to further devolution of power and
Rethinking Japan
As part of the devolution process, the ruling LDP, especially
since the Koizumi administration, has promoted the doshusei
idea. The opposition political party and its leader Ichiro Ozawa
also lent support. Although he advocated a somewhat different
structure in his renowned 1994 book Blueprint for a New Japan:
The Rethinking of a Nation, Ozawa then considered decentralization
a core issue and recommended ‘transfer of substantial
national authority and finances to local governments’.
In a 2007 survey conducted by Japan’s leading economics
daily, the Nihon Keizai Shinbun on the desirability of a “state
system”, 23 of 47 governors strongly supported the idea. Only
four opposed it.
The main opposition comes from the central bureaucracy
that sees its power eroded significantly. The new structure will
provide few opportunities for central bureaucrats to control
localities through their field offices or to transfer central personnel
to key local administrative positions.
Nonetheless, the current situation of “30 percent autonomy,”
where local governments raise roughly thirty percent of their
financial needs through local taxes, while depending for the rest
on the centre, is going to change. Already the central government
has agreed to transfer a greater proportion of income tax
to localities. Maintaining a sound balance of power between
national and regional interests will be critical. But how this balance
will be achieved remains unclear.
Moves toward decentralization now have a new momentum.
Still, it is unlikely that profound reform will be introduced anytime
soon. Japan’s road to decentralisation still has many
winding turns, but these days many more travellers too.
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Boli via [continued from pa ge 12]
constitution identifies the 36 indigenous people of Bolivia for
the first time in history, lists their languages as official languages
nationally, and requires each region to have at least two
official languages, one of which must be Spanish. Opposition
critics say that if the constitution is passed in its current form, it
will split Bolivia.
This chain of events and
the outcome hold several lessons
for Bolivians. The first is
that Morales was mistaken
when, in 2006, he mounted a
fierce campaign for the No
side in the autonomy referendum.
This act galvanized
voters against him in the four
eastern regions, where the proautonomy
forces would later
win. Morales unwisely campaigned
on the platform that
Bolivia’s only pressing issues
were greater control over its
natural resources and integrat
ion of i t s indi g enous
inhabitants into Bolivian society
and institutions. The
country, however, has other
challenges. One is regional
autonomy. Here Morales
made a crucial error. Not content
to pursue his strategy in
favour of indigenous and antineoliberal
policies, he went
further and dismissed the proautonomy
movement as an
expression of simple greed on
the part of the oligarchy – a
few wealthy families.
Compromise needed
The mistakes Morales made
arise from two different definitions of federalism. One is
Morales’ “cultural federalism” with economic power held
mostly by the central government. The other is a “federalism of
autonomy” of regions like Santa Cruz, which wants to keep all
the revenues from its natural resources. These two extremes
have led to an all-or-nothing struggle between Morales’ supporters
and the richer eastern regions.
Until the two sides acknowledge some validity in each other’s
goals, compromise will not be possible. This common
ground could lay the foundations for a new territorial model,
which is neither completely federal nor completely autonomous.
One way of implementing it could be an agreement on
equalization payments between the richer and poorer regions.
That may not be difficult to agree upon in principle. Where the
battle will play out is over what is to be equalized: government
services, perhaps including medical care and retirement, or the
standard of living?
Morales’s strongest argument against devolution is that it
would lead to a return of the latifundia, the system in early Latin
America that put large landowners in mansions and kept the
peasant farmers living in huts.
The opponents of the president are strongest in the region of
Santa Cruz, the largest of the four easternmost regions led by
the opposition. These four regions – Beni, Pando, Tarija and
Santa Cruz – are commonly called “the half moon” by Bolivians
because on the map, the outline of
the four regions resembles a crescent
The region of Santa Cruz is the
largest contributor to Bolivian GDP
(30 per cent), and generates a major
chunk of the country’s tax revenues.
In 2007 the value of exports from
Santa Cruz was four times that of the
region of La Paz. Second in wealth is
the region of Tarija, one of the four
regions that approved autonomy in
principle in 2006 and which is also
preparing for its own referendum to
implement that autonomy. About 85
percent of Bolivia’s natural gas
reserves are located in Tarija, which
accounts for its economic muscle.
East demands autonomy
The origins of the demand from
Bolivia’s east, for greater autonomy,
go back to the beginning of the
Spanish occupation. The eastern
lowlands, isolated for centuries from
the mineral-based economy of the
west, have an Amazonian climate
and look towards Brazil rather than
to La Paz. Add to that a strong
Spanish presence and some indigenous
peoples quite different from
those of the west, and you get a part
of the country with a very different
With a municipal system that has been democratizing since
the mid-1990s and an irrepressible regional movement, Bolivia
could, with a few changes, invent a new territorial model that is
neither unitary nor federal nor autonomous.
That structure could be one in which the three orders of government
would have equal constitutional powers: national,
regional and municipal. In all federal countries, the municipality
is important but in only some federal countries is it
recognized in the constitution. If Bolivia were to adopt such a
model, it could even surpass Colombia, which has been the
best example of Latin American decentralization in the past few
Unfortunately, Morales has not as yet succeeded in negotiating
a moderate arrangement for a diverse nation. He has less
than two years to go before his first presidential term is up to
square the circle and appease the four autonomous Eastern
regions as well as to transfer greater wealth and opportunity to
his indigenous constituency.
Bolivia’s President Evo Morales holds a hammer and chisel at
a ceremony in which he donated trucks and heavy machinery
to miners in the Cochabamba region in May 2008.
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