PROCESO DE MONTAJE

It bears emphasis that subnational undemocratic governors, unlike their more

democratic counterparts, stand, from a political point of view, in a more powerful position to both resist political/territorial penetration from the center, and to control provincial politics. The absence of democratic procedures through which opposition forces may eventually undermine the power of nondemocratic governors, enables subnational incumbents to act as powerful gatekeepers, constraining in turn the capacity of national rulers to penetrate and control subnational arenas. It is in this context that the control exerted by the federal government to either engage nondemocratic governors’ cooperation or curb their power

(from above or from below –i.e., via the municipal level) is critical to their ability to win over and penetrate nondemocratic arenas, and precisely for that reason becomes a key building block in the analytic framework.

Control by national incumbents over subnational politicians and subnational arenas can be exercised in two distinct major ways: (a) over governors (both opposition and co- partisan), and (b) over different aspects of subnational politics/arenas. Control over governors materializes when presidents can induce subnational incumbents to concede political spaces that they would otherwise not concede.26 By contrast, control over (some aspects of) subnational politics/arenas takes place when incumbent national politicians can trespass provincial borders and broadcast their authority and power over provincial political structures, thus circumventing and also undermining undemocratic subnational rulers’ power within their own territorial domains. Hereafter, I will refer to this control as “control from below” because it occurs via municipal or local political structures27 Finally, autonomy of subnational rulers from the center is materialized when governors manage to block or neutralize presidents’ (or national officials’) capacity to discipline and control them, thus increasing their room for maneuverability to act indifferently to, or oppose, the president’s will and agenda.

26 _{Examples of this type of control include: governors’ willingness to support candidates endorsed by national}

politicians whom they would otherwise not endorse (this includes mobilizing voters to vote for the president’s endorsed candidate); legislative support for bills that run counter to the governor’s/province’s/partisan interests; general support (materialized in the assistance to public rallies, and public declarations) for policies enacted by the national government that are not in consonance with a governor’s agenda and/or ideological stand; siding with local organized groups and with the local civil society more broadly.

27 _{Examples of this type of territorial breach include, siding with and strengthening (with political and economic}

means) provincial opposition parties; establishing and sustaining political loyalties at lower (municipal) levels of government; controlling provincial outlets of public opinion and media, among others.

Instruments of territorial and political autonomy/control

One effective instrument through which national politicians can augment their control over subnational governments is through the centralization of political, administrative, and fiscal authority. In recent decades, however, Latin American central governments have conceded power to lower levels of government, with this trend resulting in a substantial increase in the power and autonomy of subnational officials vis-à-vis the center (see Montero & Samuels 2004, and the contributors to their edited volume; Eaton 2004; Garman, Haggard, and Willis 2001; Falleti 2003, 2005, forthcoming). This shift in the balance of

intergovernmental power indicates that national incumbents now enjoy less capacity to control undemocratic subnational incumbents and arenas than they had a decade ago.

The power conferred to governors or presidents by the decentralization of political, fiscal, and administrative authority, however, assumes a zero-sum distribution of authority across levels of government, and consequently is useful to identify whether the locus of power lies at higher or lower levels of government. Yet, this way of assessing who controls whom in intergovernmental relations is not helpful in determining the degree of autonomy of each individual governor vis-à-vis the center.In other words, decentralization of authority affects all subnational politicians in the same way, conferring all subnational politicians the same autonomy vis-à-vis the central government.28 As a result, the zero-sum logic intrinsic in the processes of decentralization is silent with respect to cross-subnational differences. Because in this dissertation I am particularly concerned with variations across

(nondemocratic) subnational units, as these are key to understanding different trajectories of

28 _{For instance, once decentralization of administrative policy domains ensues, all subnational politicians will}

enjoy the same scope of authority over administrative issues, and all of them will be equally “administratively” autonomous from the center.

SUR continuity, I thus focus on instruments of control and autonomy that are cross- provincially variant.

I identify four major instruments of territorial and political control/autonomy, two of them available to presidents, and two others accessible to governors. Presidential control can be exerted through partisan structures and/or fiscal instuments.29 Gubernatorial autonomy instead, can be attained through financial autonomy and/or neopatrimonial state-

administrations (as opposed to bureaucratic state-administrations). Table 2.1 below

summarizes the 4 instruments of territorial and political autonomy/control available to both national and subnational rulers, as well as their predicted effect on rulers’ autonomy and control. I describe each of these instruments in the following section.

29 _{Wibbels (2005) also identifies these two instruments as the main mechanisms through which presidents can}

Table 2.1: Governors and presidents’ instruments of territorial and political autonomy/control (in absolute terms) Type of instrument Value Predicted effect on governors' autonomy Predicted effect on presidents' control

high fiscal discretion ↓ ↑

low fiscal discretion ↑ ↓

high electoral presence of pres. party ↓ ↑

low electoral presence of pres. party ↑ ↓

provincial financial autonomy ↑ ↓

provincial financial dependency ↓ ↑

bureaucratic state administration ↓ ↑

patrimonial state administration ↑ ↓

State administration

Presidents' instruments of territorial and political control

Fiscal

Partisan

Governors' instruments of territorial and political autonomy

Financial

1) Presidents’ instruments of territorial control

(a). Fiscal instruments

At the national level of government, officials can resort to fiscal instruments to exercise control over subnational politicians (Eaton 2004, Falleti 2005, Wibbels 2005, Díaz- Cayeros 2006). In countries where intergovernmental fiscal relations are structured along a system of revenue-sharing30, and where the rules that regulate such a system are vague, lax, easily changeable, and hardly enforceable, presidents may easily encroach on the power of lower levels of government. By withholding and/or altering the amount and timing of the

30 _{In a revenue-sharing system a country’s main (domestic) taxes are collected by the federal government and}

then distributed in two rounds. In the first round, taxes are split into two (not necessarily equal) parts between the federal government and the subnational. In the second round, the subnational share is distributed among the provinces/states.

transfers sent to a given subnational unit, national incumbents can easily buy off or induce lower-tier incumbents to act in agreement with their will/agenda.

Presidential fiscal control over governors is more likely to increase in countries where intergovernmental transfers are not channeled using automatic and formula-based criteria, but rather, on a discretional basis (Bonvecchi & Lodola 2008). Indeed, federal transfers that are automatically channeled to subnational units and which, by definition, are less susceptible to presidential discretion, hinder presidents’ ability to fiscally manipulate and exercise

control over subnational incumbents.

Finally, the level of presidential fiscal power over subnational units also depends on the revenues that are not subject to sharing. In almost all federal countries, there are taxes that are collected by the federal government and that are not reallocated to the provinces (such as import/export duties and other special taxes). In some cases, these taxes comprise a large bulk of a country’s total revenues. They thus provide national incumbents with a considerable share of fiscal resources that remain exclusively at the federal level of government, and which can be used with virtually complete presidential discretion. The larger the percentage of the taxes (out of total revenues) not subject to sharing, the larger the president’s capacity to use these resources in a discretionary way, and the more fiscal power presidents get vis-à-vis governors.

(b). Partisan instruments

National political parties and more specifically, political parties’ organizational structures, constitute powerful means through which national-level politicians can control subnational rulers and penetrate peripheries. Different strands of literature within political

science have long recognized the crucial role played by national political parties in

domesticating and controling local potentates and subnational politicians. The literature on state building and party system formation, for example, has viewed political parties as crucial instruments to exercise political influence and win over the peripheries and to undermine local potentates’ authority (Caramani 2004, Rokkan 1970, Tilly 1990, Keating 1998). In this vein, the formation of state(nation)-wide parties is viewed as a means for penetrating and standardizing the peripheries. It also stands as a reflection of the central government’s capacity to appeal, win over, and discipline provincial political elites and peripheral rulers. From a similar perspective, the literature on federalism has long acknowledged the

importance of political parties, and partisan structures as a means to control subnational elites, while empowering central governments (Mainwaring 1999; Jones, Sanguinetti & Tommasi 2000; Stepan 2000; Garman, Haggard, and Willis 2001; Samuels 2003; Wibbels 2005; Levitsky 2003; Leiras 2006). Strong, cohesive, institutionalized, and territorially extended parties are said to facilitate the central government’s ability to discipline and control subnational copartisans.

The vast literature on parties and party system has identified a number of mechanisms through which political parties and party organizational structures can contribute to enhance national politicians’ control and dominion over subnational incumbents. For instance, national party leaders can limit subnational rulers’ political autonomy, thus exerting tighter control over them, by inducing provincial incumbents to act along national party lines (instead of provincial party lines). One possible way in which national partisans can lead their subnational counterparts to act in agreement with a president’s agenda/will is via their power over selection, nomination, and appointment of candidates (Samuels 2000; Wibbels

2005; Willis, Garman & Haggard 1999). Provincial leaders with progressive career ambition, and who depend on national leaders’ nominations will most likely side with national

incumbents and act along the center’s agenda, even if so doing implies a loss in their relative autonomy vis-à-vis presidents.

Another mechanism through which political parties may induce subnational rulers to follow a president’s agenda/will, at the expense of giving up their autonomy, is via coattails effects (Wibbels 2005, Rodden 2003). As Rodden notes, “copartisanship can encourage ‘electoral externalities,’ whereby subnational politicians aligned with the central government forego particularistic benefits in favor of policies [reforms] that benefit their party as a whole.” If subnational officials fail to contribute to these policies [reforms], as Rodden’s argument goes, non-compliance “may weaken the national party, thus reducing provincial incumbents own reelection chances.” In this case, provincial rulers will give up their autonomy and follow the president’s agenda/will out of prospective concerns for what may happen in future elections if they do not (see Wibbels 2005).

When analyzing the effects of political parties on lower-levels of government, scholars of federalism have, for the most part, concentrated on either one or both types of mechanisms (Rodden 2003, Samuels 2000, Wibbels 2005, Shugart and Carey 1992). In doing so, they have underplayed the importance of a third, and more basic mechanism of presidential partisan control, that antecedes (and enables the operation of) the above- mentioned mechanisms, namely, the effective presence of a president’s party in any given subnational unit. Presidential leverage over subnational rulers via control over candidates’ selection and nomination, and control through coattails, are both meaningless in provinces where the presidential party does not exist, i.e., does not have an electoral presence and a

minimal organizational structure. Thus, in order for a president to control or appeal a governor via his/her power over selection and nomination, a governor necessarily must belong to the president’s party. The same holds true for coattails effects: in order for a governor to benefit from electoral externalities and have incentives to strengthen their party at the national level, the president’s party needs to be present in the governor’s district. In summary, the first mechanism that allows president to control subnational copartisans is the effective territorial presence of the president’s party in any given subnational unit.

Note that the preceding instruments of partisan control (i.e., coattails and

manipulation via nominations) refer to instances where the president and the governor belong to the same party. Yet, instances of partisan control can also occur when presidents and governors are not co-partisans. Territorially extended parties may also facilitate a presidents’ capacity to control governors from the opposition. Even though presidents cannot resort to internal partisan mechanisms to discipline opposition governors –simply because they do not belong to their party, the existence of the president’s party in any given subnational unit confers presidents the possibility of using their partisan structures as springboards to

penetrate the state. Presidents who can take hold over their state-level partisan branches may expand their power in subnational units as well as threaten (opposition) governors’ power from “below,” thus challenging their authority.

2) Governors’ instruments of territorial autonomy

As noted in the previous section, presidents can become powerful vis-à-vis governors provided they have effective access to partisan and financial instruments. Yet, the authority conferred by these instruments to presidents might be overshadowed by the power of

governors to gain autonomy from the central government. Two instruments of territorial and political autonomy that can help governors neutralize presidential power are the governor’s economic/financial autonomy (from the center) and the existence of neopatrimonial state- administrations (as opposed to a bureaucratic administration). I turn next to these devices.

(a). Financial instruments

With the exception of the country capitals and a few other highly populated and/or rich provinces, subnational units in most federations of the developing world lack significant own-state revenues, and consequently depend to a large extent on the revenues that are allocated by the federal government (Wibbels 2005, Courchene & Diaz-Cayeros 2000; Diaz- Cayeros 2004, 2006; Rodden 2006; Spiller & Tommasi 2007; Saiegh & Tommasi 1998). The fiscal dependence of subnational units on the center may be accentuated provided the rules that regulate the intergovernmental distribution of fiscal resources are lax and conducive to augmenting national politicians’ distributional discretion.31

There is, however, another way in which subnational rulers, regardless of their capcity to raise their own revenues, can become economically dependent on the central government. Profligate subnational units, which incur severe financial imbalances (i.e., high deficits and high levels of indebtedness), can become extremely dependent on the center regardless of whether they receive abundant, automatic shared revenues from the center or

31 _{This conception of fiscal dependency of subnational units on the center –i.e., one in which}

provinces/states/regions are conceived to be dependent on the central state because the former channels revenues from taxes to subnational units, has dominated the fiscal federalism literature. Yet, these works have omitted the fact that in most federations, the transfers that flow to the states within revenue-sharing agreements do so in an automatic way. Thus, even though formally speaking subnational units are “dependent” on the center, this dependency is neutralized because these transfers are channelled automatically (for a discussion of this point and related issues Bonvecchi & Lodola 2008).

raise copious state taxes. Provincial financial mismanagement is commonly seen among subnational units in federal systems (see Rodden 2006, Remmer & Wibbels 2000, Wibbels 2005). In fact, a recurring practice among lower-tier governments is to resort to the central government for financial aid and bailouts (see Sanguinetti 1999; Hernández Trillo, Diaz- Cayeros & Gamboa González 2002; Wibbels 2005; Rodden 2006).

Under these circumstances, and given that federal governments have considerable leeway in deciding when and what provinces/states they rescue, profligate governors can easily become hostages of the federal government.32 By contrast, governors who are financially and economically responsible, and who, as a result, do not need to resort to the national government for financial assistance stand in a solid position to preserve their autonomy from federal politicians. In sum, the less the governors’ need for financial aid, the greater their potential for political independence vis-à-vis the center and thus for

confrontation with national incumbents.

(b). Neopatrimonial state-administrations

Compared to their more democratic counterparts, undemocratic governors stand in an exceptional position to exercise control over the territorial areas they rule. Due to the fact that provincial/state-level elections in undemocratic regions are minimally pluralistic,

minimally competitive, and minimally open, undemocratic governors are “protected” against other opposition forces, which might incidentally dispute their political power.

32 _{Economic and financial dependence on the center can become even more acute in contexts where the}

borrowing autonomy of subnational units is limited. That is, in countries where lower-tier governments are not allowed to borrow from lenders other than the central government, lower-tier politicians are virtually

Yet, the exercise of authority and political power can differ substantially. Subnational state-administrations, i.e. the set of institutions and rules that organize government, establish the parameters through which rulers exercise the (political) power conferred to them by their ruling position (see Weber 1976 [1925]; Hartlyn 1998b; Bratton & van de Walle 1997; Ertman 1997; Mazzuca 1998, 2007). As I will show in detail in chapter 3, these administrations concentrate and disperse the capacity of subnational incumbents to wield control over persons, territory, resources, and institutions, thus constraining or empowering subnational rulers’ relative power position vis-à-vis local subnational groups (i.e., political parties, elites, local organized groups, and civil society more generally).

Following Max Weber (1976 [1925]), the management of state resources is administered either through (neo) patrimonial or bureaucratic administrations. Whereas neopatrimonial state (provincial) administrations allow for a greater concentration of power, thus enhancing governors’ political clout over their subnational domains, bureaucratic administrations disperse political power, thus lessening the rulers’ capacity to control persons, resources, other branches of government, and territory.

The existence of different state administrations, and how these in turn allow for subnational incumbents’ encroachment or constraint of political power is decisive for governors’ capacity to avert penetration and control from the central government.33 Unlike neopatrimonial state-administrations, bureaucratic administrations prevent rulers from exerting tight control over state-agencies, opposition forces, local organized groups, and civil

33 _{For a similar reasoning on how the concentration/dispersion of subnational power empowers/weakens}

society, thus paving the way for the existence of autonomous local groups. The existence of a more independent civil society and opposition, in turn, creates a “window of opportunity” for national incumbents to further expand their presence and leverage over recalcitrant incumbents, as they stand in a position to side with and/or activate local groups and political structures, and thus challenge and control nondemocratic governors from “below.”34

By contrast, neopatrimonial administrations, which enable subnational incumbents to exert a tight grip over state-agencies of control, local opposition and organized groups, and