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Local Government Capacity-Building: A Regional Perspective

The views expressed are those of the author and do not necessarily reflect the views of ASPA as an organization. 

By Agustin Leon-Moreta and Vittoria Totaro
March 3, 2019

In this article, we discuss the role of local government in public service delivery from a comparative perspective. It is increasingly recognized that local governments have diverse capacities to deliver public goods and services across nations. Here we compare some major differences between local governments in the United States vs. local governments in Latin America with a focus on functional, fiscal and structural capacities.

Functional capacity, the ability of local governments to deliver public goods and services, is a fundamental dimension of local government capacity. In the United States, local governments often have general functional capacities. For example, policing powers are generally delegated to municipal governments, so these governments can employ those policing powers for a wide range of public safety purposes. However, local governments in many Latin American nations lack policing powers. Instead, policing powers tend to be a governmental function of the national governments. For this reason, police services in Latin American communities are generally delivered by national agencies. This is one example of how functional autonomy is much more restricted in Latin American local governments and is generally broader in United States local governments.

Why does the functional capacity of local governments differ across the Americas? Much of the explanation lies in the legal powers and rights of local governments in United States federalism. In some states, municipal governments can enjoy substantial functional autonomy due to home rule legislation, which grants capacity for action in terms of the scope of services that municipal governments can provide. Conversely, municipal governments in Latin America are much more dependent on their central government for explicit authority to deliver services. For example, while United States local governments can defend some of their powers in court if necessary, local governments in many Latin American countries lack basic authority for service delivery due to more centralized systems of government.

A second factor is the fiscal capacity of local governments. Although there are differences in fiscal capacity among United States local governments, these governments often enjoy fiscal powers that starkly contrast with the restricted fiscal capacity of Latin American local governments. A serious constraint on Latin American local governments is their borrowing capacity. While many United States local governments can raise funding through the municipal bond market, this ability is limited or even nonexistent in Latin American communities, denting their ability to fund capital-intensive public goods like infrastructure.

A third factor is the overall structural autonomy of local governments. By structural autonomy, we specifically refer to the ability of local governments to adjust their boundaries. Boundary change is a key tool for local governments to incorporate, annex, consolidate, or dissolve local governments. In many United States localities, the ability to change boundaries is available, yet local governments in most Latin American governments depend on their central government for authorization or initiative to adjust their jurisdictional boundaries. For this reason, boundary changes are extremely rare in Latin America, but can be quite common in the United States. Every year, new local governments are formed or their boundaries are changed via annexation, consolidation and dissolution in the United States. The ability to change local government boundaries is tremendously important to make local government more productive from a service delivery standpoint.

Stark differences in the functional, fiscal and structural capacities of local governments are prevalent between the United States and Latin American nations, but why? First, the United States has been governed under a strong tradition of federalism. Federalism typically concerns federal-state relationships, it has arguably a beneficial impact on local government capacities. Some features of the federal system deliver protections and rights to local governments that Latin American local governments do not enjoy. The governmental powers of the American states in the federal system can also result in general grants of autonomy from the states to localities, especially cities.

How can local government autonomy be promoted in Latin America? A long-term agenda of local capacity-building in this region should begin with a reassessment of constitutional rights for local government and governance. Under some Latin American constitutions, local governments owe their ability to function to the central government. Ideally, local governments of Latin America would be granted autonomy in the consequential areas discussed above: structural, fiscal, and functional capacity.

Building local government capacity in Latin America is a long-term effort that will go hand-in-hand with state development in Latin American nations. Local governments of Latin America will continue to depend on central governments for their functionality. However, granting them greater autonomy will allow many of them to more efficiently and effectively deliver services to their communities. Multilateral organizations such as the IMF and the World Bank can play a decisive role via lines of credit to Latin American nations, which could be tied to improved efforts in democratic practices and anti-corruption reforms. In sum, both institutional reform and well-structured fiscal assistance programs will be essential to enhance democracy, governance and quality of government in Latin American communities.

Agustin Leon-Moreta is Assistant Professor at the University of New Mexico School of Public Administration. He received a PhD in Public Administration and Policy from the Askew School at Florida State University. His research has appeared in Public Administration Review, the American Review of Public Administration, Urban Studies, State and Local Government Review, and Public Administration Quarterly.

Vittoria Totaro is a research analyst and consultant with i2i Institute, conducting program evaluations for nonprofit and government entities. She received her MPA in 2018 from the University of New Mexico.

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