Decentralisation Policies, Subnational Autonomy and Federal Executive Power

Abstract

Decentralisation is assumed to benefit subnational government by increasing its autonomy from central government. This paper challenges this assumption by arguing that decentralisation can have mixed effects on vertical intergovernmental relations (national-subnational). Some decentralisation policies may result in greater subnational autonomy from national government, while some decentralisation policies may paradoxically increase a subnational unit’s dependence on national government. By deconstructing decentralisation into its administrative, fiscal and political nature, and by identifying different patterns of fiscal and administrative decentralisation, the paper examines decentralisation policies in Mexico and Brazil. Although both countries have undergone decentralisation, its nature and patterns were very different and explain the different intergovernmental relations that resulted in each country. Brazil’s decentralisation led to increased subnational autonomy, while Mexico’s preserved or even increased federal executive power.