Gonzalo Sánchez de Lozada[2]
Jean-Paul Faguet[3]


Why would any president, having spent a career achieving the pinnacle of power, willingly hand it away to others he cannot control?  This is the black hole at the heart of the decentralization debate that has never been satisfyingly answered.  We provide an answer for the radical case of Bolivia through an extended interview with the man who decentralized it.  Gonzalo Sánchez de Lozada was a principal actor in some of the most important events in Bolivia’s – and indeed Latin America’s – modern history.  A highly improbable politician and statesman, he rose to prominence as the minister who designed the stabilization plan that defeated hyperinflation in a period of near-national collapse.  He was elected president in 1993 and again in 2002.  His first term saw a burst of reforms that decentralized political power and resources to municipalities, privatized the largest state enterprises, reformed education, created a public pension scheme, and reformed the executive branch of government.  His second term saw rising unrest that culminated in huge demonstrations, shocking violence, and Sánchez de Lozada’s overthrow/flight to the US, where he lives today.  This chapter focuses on his formative experiences in government, how he came to believe in the necessity of reform, and how he carried his party and government in a startling push that decentralized Bolivia.


Bibliography and Further Reading

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Albó, Xavier and Victor Quispe. 2004. ¿Quiénes son los indígenas en los gobiernos municipales? La Paz: CIPCA.

Albó, Xavier, Armando Godínez, Kitula Libermann and Francisco Pifarré. 1990. Para Comprender Las Culturas Rurales en Bolivia. 2d ed. La Paz: MEC/CIPCA/UNICEF.

Ardaya, R. 1996. La Construcción Municipal de Bolivia. La Paz: Editora Ateneo.

Blanes, José. 2000. Mallkus y Alcades: La Ley de Participación Popular en comunidades rurales del Altiplano paceño. La Paz: PIEB.

Boone, Peter and Jean-Paul Faguet. 1998. “Multilateral Aid, Politics and Poverty: Past Failures and Future Challenges”, chapter 2 in Richard Grant and Jan Nijman (eds.). The Global Crisis in Foreign Aid, Syracuse: Syracuse University Press.

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Campbell, Timothy. 2001. The quiet revolution: The rise of political participation and leading cities with decentralization in Latin America and the Caribbean. Pittsburgh: University of Pittsburgh Press.

Channa, A. and J.P. Faguet. 2012. “Decentralization of Health and Education in Developing Countries: A Quality-Adjusted Review of the Empirical Literature.”  LSE/STICERD Working Paper No. EOPP 38.

Dunkerley, James. 1984. Rebellion in the Veins: Political Struggle in Bolivia 1952-82. London: Verso.

Faguet, Jean-Paul. 2014. “Can Sub-National Autonomy Strengthen Democracy in Bolivia?” Publius: The Journal of Federalism, 44(1): 51-81; doi: 10.1093/publius/pjt020.

Faguet, Jean-Paul (ed.). 2013. “Decentralization and Governance.”  Special Issue of World Development. http://dx.doi.org/10.1016/j.worlddev.2013.01.002

Faguet, Jean-Paul. 2012. Decentralization and Popular Democracy: Governance from Below in Bolivia. Ann Arbor: University of Michigan Press.

Faguet, Jean-Paul. 2004. “Why So Much Centralization? A Model of Primitive Centripetal Accumulation.” LSE-STICERD Development Economics Discussion Paper No.43, London School of Economics and Political Science.

Faguet, Jean-Paul. 2000. “Decentralization and Local Government Performance: Improving Public Service Provision in Bolivia”, Revista de Economía del Rosario, 3(1): 127-176.

Faguet, Jean-Paul and Fabio Sánchez. 2013. “Decentralization and Access to Social Services in Colombia.” Public Choice. Winner of the Corporación Andina de Fomento International Research Paper Prize. DOI 10.1007/s11127-013-0077-7.

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