From Bolivia to India, and from the United Kingdom and Spain to Uganda, national governments are giving away their power. A revolution of local empowerment has quietly swept both developed and developing nations alike in the closing decades of the twentieth century.

Perhaps nowhere has this trend reshaped the political landscape more dramatically than in Latin America – a region more likely to call to mind highly centralized governments run by military strongmen, civilian dictators, or one-party rule (Véliz 1980). In 1980, only half of Latin America's governments held democratic elections at the national level; by 1997, all but one elected both national and regional and/or local governments (Inter-American Development Bank 1997: 99). Even more stunning, many countries have bolstered local political empowerment by increasing the financial independence of subnational governments by apportioning real fiscal resources to elected officials.

Have national politicians all gone mad? Surprisingly, few scholars have paused to probe the puzzling question of why politicians are giving power away. Instead, a great deal of intellectual activity has been devoted to two other questions: Has fiscal decentralization increased economic gains? And have more elections improved democratic quality? Determining what motivates decentralization seems a necessary and prior question to determining what its consequences may be; it is a missed step that can throw the best analysis of consequences awry. Exploring the why and the when of decentralization is the heart of this project. Unfortunately, the answer is not obvious.