The Local Alternative Decentralization and Economic Development

This book offers a step forward in finding out how the new decentralized institutional arrangements affect local economic development. In particular, it analyzes how local governments can use their increasing powers and responsibilities to improve product

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The Local Alternative Decentralization and Economic Development Rafael de la Cruz, Carlos Pineda Mannheim, Caroline Pöschl, Editors

THE LOCAL ALTERNATIVE

Copyright © Inter-American Development Bank, 2011. Softcover reprint of the hardcover 1st edition 2011 978-0-230-11175-2 All rights reserved. First published in 2011 by PALGRAVE MACMILLAN® in the United States—a division of St. Martin’s Press LLC, 175 Fifth Avenue, New York, NY 10010. Where this book is distributed in the UK, Europe and the rest of the world, this is by Palgrave Macmillan, a division of Macmillan Publishers Limited, registered in England, company number 785998, of Houndmills, Basingstoke, Hampshire RG21 6XS. Palgrave Macmillan is the global academic imprint of the above companies and has companies and representatives throughout the world. Palgrave® and Macmillan® are registered trademarks in the United States, the United Kingdom, Europe and other countries. ISBN 978-0-230-11176-9 ISBN 978-0-230-11964-2 (eBook) DOI 10.1057/9780230119642

Library of Congress Cataloging-in-Publication Data The local alternative : decentralization and economic development / the Inter-American Development Bank ; editors: Rafael de la Cruz, Carlos Pineda Mannheim, Caroline Pöschl. p. cm. ISBN 978–0–230–11176–9 (pbk.) 1. Economic development—Latin America. 2. Economic development— Caribbean Area. 3. Decentralization in government—Latin America. 4. Decentralization in government—Caribbean Area. I. Cruz, Rafael de la. II. Mannheim, Carlos Pineda. III. Pöschl, Caroline. IV. Inter-American Development Bank. HC130.E5L63 2011 338.98—dc22 A catalogue record of the book is available from the British Library. Design by Newgen Imaging Systems (P) Ltd., Chennai, India. First edition: July 2011 10 9 8 7 6 5 4 3 2 1

Transferred to Digital Printing in 2011

2011000620

Contents

List of Boxes

ix

List of Figures

xi

List of Tables

xiii

Acknowledgments

xv

About the Contributors

xvii

Preface

xxi

Introduction Rafael de la Cruz, Carlos Pineda Mannheim, and Caroline Pöschl

1

Part I Decentralization and Local Economic Development 1

2

Exploring Conditions for Local Economic Development in Decentralized Systems of Government Tim Campbell

7

The Experience of Decentralization and Local Development in Latin America Rafael de la Cruz

39

3 Alternative Decentralization Models and the Chilean Experience Mario Marcel

57

Part II Local Management 4

5

Mississauga, Canada: From a Small Community to a Dynamic Urban Center Hazel McCallion Washington, DC: Restoring the Capital of the United States Anthony Williams

81 91

vi

CONTENTS

6 Catalonia: Overcoming Budgetary Limits with Public-Private Partnership and Performance-Based Budgeting Salvador Maluquer I Amorôs and Anna Tarrach I Colls 7 Revitalizing Urban Centers Mauricio Silva and Roberto Chávez Part III

95 105

Macroeconomic Impact

8 Decentralization and Macroeconomic Control Ernesto Stein

119

9 Lessons from the Argentinean Case of the 1990s Roberto Lavagna

129

10

Fiscal Decentralization and Macroeconomic Performan