INTRODUCTION

The implicit assumption in this recent World Bank book on Mexico is that democratization leads to decentralization and that the latter leads to development. In all fairness, the publication and the Bank have been careful to point out that not all decentralization is good for development. This chapter argues that, in practice, not all democracies have equally auspicious forces driving the decentralization process.

Decentralization can, but does not necessarily, improve accountability, equity, and government performance. From the citizen's point of view, the specific benefits that decentralization can bring about depend on the way they are represented politically as well as the kinds of institutions that form and implement government policy. Moreover, the costs and benefits of decentralization depend largely on the entry points and intermediate goals for the transition from the centralized state to a decentralized public sector. There is no standard path toward decentralization; and countries also rarely plan their path toward a final version of the decentralized state – the process is more often the result of internally inconsistent accumulated reforms adopted over time in response to changes in the political balance.

This chapter is centered on two interconnected developments that account for the main challenges for Mexico's decentralization today.