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Central governments slowly cede power

Ever since the colonial era, when Spain tried to control its far-flung empire by concentrating power in a few viceroyalties, government in Latin America has tended to be highly centralized. That tendency persists today, even though central authorities are beginning to delegate powers to lower administrative levels, such as provinces and municipalities.The graph below illustrates one of the simplest indicators of the degree of centralization in a country: the percentage of total government spending carried out by subnational governments. On average, that figure amounted to only 15 percent in Latin America in 1995, compared to 35 percent in the industrialized countries of the Organization for Economic Cooperation and Development (OECD). There are exceptions: Brazil and Argentina have always given more power to the provinces, partly because the sheer size of their territory has made extreme centralization impractical, and Colombia has historically given its departments considerable authority.

Over the last decade, however, the resurgence of democracy and civic activism across the region has led to the election of provincial and municipal governments that are demanding greater control of the resources that affect their local constituencies. As a result, the region as a whole is showing a slow but unmistakable tendency toward decentralization. According to a survey conducted by the IDB and included in the 1997 edition of Economic and Social Progress in Latin America, between 1985 and 1995 the percent of government spending by subnational governments grew from around 34 to 50 percent in Argentina, 33 to 40 percent in Colombia, 3 to 10 percent in Peru and 4 to 14 percent in Chile.

Even in these countries, however, decentralization is affecting some sectors more than others. On the one hand, central governments have long been quite willing to hand over management of waste disposal, urban street maintenance and urban transportation to local officials. Now, even sectors such as water services, health, and education are gradually being decentralized. But airports, telecommunications, ports and railways still remain largely in the hands of a single central authority.

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