Paper short abstract:

This paper looks at the political process through which key stakeholders in selected countries bargain the allocation and distribution of EI revenues in Bolivia, Colombia, Ecuador and Peru.

Paper long abstract:

The recent price and investment boom in the mining and hydrocarbon sectors has triggered widespread expectations for greater economic and social development, especially among developing countries. The choice of mechanisms for the use and distribution of extractive revenues is an inherently political process. For the most part, governments have favoured a greater decentralisation of EI-related revenues to appease local resistance to extractive industries but the modalities and mechanisms of fiscal decentralisation vary considerably across cases. This paper explains variation in redistributive mechanisms in four Andean countries: Colombia, Ecuador, Peru and Bolivia. We argue that distribution modalities depend on the bargaining power of subnational actors and the linkages between national and subnational political actors. The paper builds on original field research undertaken during the last three years in the four Latin American countries and identifies some knowledge gaps regarding the effectiveness of different decentralisation modalities to improve development outcomes at the local level.