Resource information
The decentralization game in Bolivia has
been altered quite significantly with the presence of new
bargainers at the departmental level. Two, opposing groups
have emerged and which follow intricate strategies to
enforce their claims. The highland departments are strongly
aligned to the Movimiento al Socialismo (MAS) party and the
charismatic leadership of the country's first
indigenous leader Evo Morales. The Media Luna departments in
the lowlands demand autonomy and seek a greater share of the
national pool of hydrocarbon revenue. The paper discusses
how a fiscal pact can be forged to bring agreement around
the most pressing issues. It considers several bargaining
packages which could be crafted and analyzes the extent to
which decentralization principles need to be sacrificed in
order to achieve agreement among competing actors. It is
likely that these agreements may eliminate some
inefficiency, but also create others. An important insight
is that the fiscal pact should be renegotiated at certain
pre-defined times, in order to provide flexibility and
adjust to the constraints of actors to engage in
inter-temporal commitments. Explicit exit options would
enhance the possibilities for agreement.
