Review of decentralization and municipal development initiatives and their effect on democratization in Central America

This document reviews the impact and prospects of these efforts. Each country has developed its own unique process and pace of change, yet each has responded to the common objective of achieving stronger and more participatory democratic systems. Significant conclusions on the benefits of this process are not yet possible. Decentralization in Central America is still in its infancy, and the paternalism of central government, together with the natural reluctance of incumbent political parties to surrender political power, remain constraints to local autonomy. Nonetheless, the shifting in the balance of power from central to local governments has generated a new spirit in local government leadership, which is quickly becoming aware of its new responsibilities and power. Evidence is also mounting throughout the region that democratically elected local governments are more than capable of managing their own affairs, generating and effectively spending their own resources, and delivering services more responsively, effectively, and in most cases, more efficiently than central government. Lessons learned include the following. (1) Building confidence in democratic institutions begins at the local level. (2) Municipal government financial autonomy is critical for local democratic development. (3) National-level commitment to municipal reform is essential for establishing an environment supportive of decentralization and municipal autonomy. (4) Municipal associations, both national and regional, can become catalysts for decentralization and democratization, and they may be the critical variable absent from past decentralization efforts in the region. (5) Local government is an effective vehicle for identifying, prioritizing, and implementing multisectoral investments. (6) Local capacity building is most successful and local level impact is greatest in countries where broader authorities and greater resources have been transferred to municipalities. (7) Linkages between municipal governments and civil society institutions are underutilized mechanisms for participatory democracy in Central America.