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Abstract

Efforts to promote decentralization have spread globally in response to pressures to better address the needs of citizens, and these processes have produced varying degrees of change in the distribution of power between national and subnational governments. I apply Tulia Falleti's groundbreaking sequential decentralization theory to shed light on the outcomes of the current decentralization process in Peru. I test the robustness of her theory using entirely new data gathered from more than 90 interviews with actors involved in the process. According to Failed, decentralization reforms are categorized as administrative, fiscal and political. The nature of coalitions (national, subnational, ruling, opposition and two types of mixed coalitions) determines the next round of reform to emerge. The types of interests, whether territorial, corresponding to the government level that a politician represents, or partisan, namely party affiliation, affect reformers when bargaining for more power. The analysis of sequences and the nature of coalitions affect the degree of change in the intergovernmental balance of power (IBOP) after the reforms. I argue that in Peru the sequence of reforms—political, administrative and fiscal—has produced a low level of change in IBOP. A mixed coalition, with prevailing subnational interests, promoted political reforms. A reactive mechanism triggered the formation of a national coalition between the ruling and opposition parties, promoting national interests. As the result of a power reproduction mechanism, which strengthens the prevailing interests, a national coalition dominated the fiscal reforms. Although this decentralization process generated a low level of change in the intergovernmental balance of power, it is a significant process considering Peru's long list of failed decentralization attempts. Moreover, greater political representation will take place as civil participation mechanisms are outlined in the decentralization laws, contributing to legitimating the democratization of Peru's state and society.