Decentralizing the provision of public services in Bolivia: institutions, political competition and the effectiveness of local government

This dissertation comprises a close analysis of decentralization in Bolivia, employing a methodology that marries qualitative and quantitative techniques. It first examines the effects of decentralization on public-sector investment and the provision of public services in Bolivia using a unique database that includes measures of municipalities' social and institutional characteristics and information on its policy-making processes. I find that decentralization changed both the sectoral uses of public resources and their geographic distribution significantly by increasing government sensitivity to local needs in human capital investment and the provision of basic services. I then investigate the determinants of central and local government investment respectively in order to investigate why the shift in regime produced such large changes in investment patterns. I then turn to a much deeper examination of local government via nine case studies, selected to broadly represent Bolivia's national diversity. I begin with an account of the workings of local government in the best and worst of these, analyzing the character and interactions of the major societal actors. I locate fundamental causes of good and bad government in the economic structure of a district as it relates to the political party system, and the cohesiveness and organizational capacity of its civil society. These ideas are used to build a conceptual model of the local government process in which the interactions of political, economic and civic actors reveal information and enforce accountability. I show how imbalances between them can cripple accountability and distort the policy-making process. Lastly, the dissertation tests the model by examining government performance in seven additional municipalities. I show that the framework can explain the emergence of good or bad government institutions, and thus the quality of government a district ultimately receives, through the interactions of key players —notably civic organizations — deep in the local political economy