| Abstract: | In contrast to years of centralization when the national governmentdominated the states and municipalities, fiscal decentralizationis now taking place throughout Latin America. This study considersthe reasons for this change. Fiscal decentralization meritsseparate attention because the financial independence of subnationalgovernments ultimately determines their success and power. Competingpolitical and economic explanations are tested on a sample of17 countries between 1985 and 1995. While federalism is a significantpredictor of greater fiscal decentralization, other factorssuch as presidential power, structural adjustment, level ofdevelopment, and country size also determine the level of fiscaldecentralization. |
