“Why I decentralized Bolivia”

Why would any president, having spent a career achieving the pinnacle of power, willingly hand it away to others he cannot control? This is the black hole at the heart of the decentralization debate that has never been satisfyingly answered. We attempt to answer this question for the radical case of Bolivia through an extended interview with the man who decentralized Bolivia. Gonzalo Sánchez de Lozada was a principal actor in some of the most important events in Bolivia’s – and indeed Latin America’s – modern history. A highly improbable politician and statesman, he rose to prominence as the minister who designed the stabilization plan that defeated hyperinflation in a period of near-national collapse. He was elected president in 1993 and again in 2002. His first term saw a burst of reforms that decentralized political power and resources to municipalities, privatized the largest state enterprises, reformed education, created a public pension scheme, and reformed the executive branch of government. His second term saw rising unrest that culminated in huge demonstrations, shocking violence, and Sánchez de Lozada’s overthrow/flight to the US, where he lives today. This chapter focuses on his formative experiences in government, how he came to believe in the necessity of reform, and how he carried his party and government in a startling push that decentralized Bolivia.