Political obstacles to decentralization: Evidence from Argentina and the Philippines

Decentralization has swept across the developing world in recent years. Alt hough the speed and scope of the shift toward more decentralized practices is striking, decentralization is neither inevitable nor irreversible. Rathe r, it faces enormous political obstacles and can be subject to serious setb acks. This article accounts for attempts by national politicians to thwart decentralization in two countries that recently adopted some of the most si gnificant decentralizing changes in their respective regions: Argentina and the Philippines. Based on fieldwork in each country, it suggests that even after the political decision to decentralize has been made, national polit icians may face deep-seated incentives to preserve centralized control over fiscal policy. In Argentina, President Carlos Menem partially reversed the previous decentralization of revenue because fiscally-independent provinci al governors were a challenge to his political interests and capabilities. In the Philippines, legislators attempted to reverse and then circumvent de centralization since it threatened their status as brokers claiming persona l credit for negotiating fiscal transfers from the centre. The article iden tifies an intermediate outcome in both countries, according to which decent ralizing policies are neither entirely reversed nor implemented as initiall y designed.