GOLD Report I - UCLG

167I. IntroductionLatin America is made up of a large group ofcountries located in the territory extendingfrom Mexico’s Río Bravo in the north to Tierradel Fuego at the southernmost tip ofSouth America. Latin America for the purposesof this report is divided into four subregions:Mesoamerica, including Mexico andthe Central American nations of Belize, CostaRica, Guatemala, Honduras, Nicaragua,Panama and El Salvador; the Antilles withCuba and the Dominican Republic 1 ; SouthAmerica, which comprises the Andean countriesof Bolivia, Colombia, Ecuador, Peru, andRepública Bolivariana de Venezuela; andthe Southern Cone, which encompassesArgentina, Brazil, Chile, Paraguay andUruguay.An estimated 540 million people live in LatinAmerica. Predominant cultures includethose embodied by descendants of NativeAmericans, Spanish and Portuguese colonizers,African slaves and successive wavesof European immigrants during thepast two centuries. It is the most urbanizedof the developing regions. Althoughlevels of urbanization vary between 93%in República Bolivariana de Venezuela and42% in Haiti (see Table 1), an estimated77.8% of all Latin Americans live in cities.Latin American countries present very differentdegrees of development. While theaverage regional GDP is $4,044 (CEPAL,2005), it is a continent with great inequalityin the distribution of wealth. Almost40% of the population lives below the povertyline. The inequality has an unfavorableimpact on the advance of democracyand full exercise of citizenship (HumanDevelopment Report, UNDP, 2005).The forms of states are diverse as wouldbe expected in a vast area containing 100states or provinces in federal countries,250 regions or departments, and morethan 16,000 local governments —municipalities,districts or cantons— across thesubcontinent. Several countries, includingBrazil, Mexico, Argentina and RepúblicaBolivariana de Venezuela, have adopteda federal system with at least two levelsof sub-national government. The othercountries have unitary state systems.In Latin America, the presidential regimeis the most prevalent form of governance,with a clear predominance of the nationalexecutive over other state powers.From 1980 onward, the authoritarian regimesthat dominated the area for generationshave slowly given way to democraticgovernments that foster popular electionof local authorities.A few Latin American countries did havedemocratically elected local governmentsbefore 1980, and now all of the nationshave municipal governments elected byuniversal suffrage (see Table 2). Themajority of the countries are democratizingand reforming their statesthrough institutional, political and legaltransformations, of which decentralization2 and strengthening of sub-nationalgovernments are part 3 .In Latin America,the presidentialregime is the mostprevalent formof governance,with a clearpredominanceof the nationalexecutive overother state powers1. The English-speaking countries (Antigua, Barbados, Granada, Jamaica, Saint Lucia, Trinidad and Tobago) are not included in this study.Nor is Puerto Rico or the overseas territories of France, the United Kingdom and the Netherlands. Only brief mention will be made ofHaiti.2. The notion of decentralization is broadly understood as the process of transfer of power and functions from the central state to theintermediate and local levels of government and administration. We make a distinction between political decentralization or devolution—with the transfer of responsibilities and resources in the framework of local autonomy— and administrative decentralization or“deconcentration,” which refers only to the transfer of functions and resources without autonomy. Both processes are accompanied byvarying degrees of fiscal decentralization, i.e., the capacity to establish, collect and administer financial resources, to fulfill functions andprovide services. Complex forms arise from the various combinations of these three processes.3. Valadés, Diego and Serna, José María, 2000; Carbonell, Miguel 2004; Fix, Héctor and Valencia, Salvador, 2005.