Structures of government in Latin America's major cities

The following discussion examines the principal features of government structure and administrative practice in Latin America's major cities and judges them against the above-mentioned criteria. The discussion focuses on the four existing mega-cities, as well as drawing upon the experience of smaller capital cities such as Lima, Caracas, Bogotá, and Santiago.

1 The lack of a metropolitan authority

No major city in Latin America has a single authority which administers the whole urban area. Most cities are divided between a number of political-administrative units, and, although one municipality may be dominant, none has much wish or incentive to collaborate. This pattern is particularly marked in the metropolitan area of São Paulo, which consists of 39 separate municipalities, and in Greater Santiago, which is made up of 34 separate communes. Whereas São Paulo developed this structure by chance, failing to reform the administrative structure as the metropolitan area grew and absorbed one contiguous municipality after another, Santiago made a conscious decision to adopt it. An administrative reform in 1982 "balkanized" administration in Santiago, giving considerable responsibility to local government over a wide range of municipal matters.

If these two cities represent the extreme in terms of the number of municipal units, several other cities have similar structures. Rio de Janeiro consists of 13 separate municipalities, Buenos Aires has 20 local government units, and Mexico City falls under the jurisdiction both of the 16 delegated areas of the Federal District and of 27 municipalities. The exception is Lima, which does have the equivalent of a metropolitan government because the Province of Lima corresponds broadly with the mega-city's built-up area and is located within the a single state, the Department of Lima.

What makes administration particularly complicated is that many of these municipalities are themselves managed by separate higher level administrative units. Mexico City is divided administratively between the Federal District and the State of Mexico. Administration in Buenos Aires is split between the Federal Capital and the surrounding State of Buenos Aires, the latter having its capital based in La Plata. Administration in Bogotá is split between the Federal Capital and the Department of Cundinamarca, and local government in Caracas between the Federal District and the State of Miranda. Indeed, among the largest eight cities of the region, only Lima, Rio de Janeiro, and São Paulo fall within a single second-tier authority (i.e. a state or a province).3

The division of authority between different second-tier authorities often causes conflict. In Mexico City, for example, the governor of the State of Mexico may be drawn from a different political party, or from a different faction of the same party, from the presidential nominee who runs the Federal District. As a result, there is minimal integration between agencies in the State of Mexico (responsible to the governor) and those of the Federal District (responsible to the regente or mayor). For example, until recently the metro system operated only in the Federal District; transportation in the State of Mexico was someone else's problem! In Buenos Aires, the national government provides electricity, water, and gas in the Federal Capital but the Province of Buenos Aires is responsible for infrastructure in the rest of the city (Pírez, 1993; see also chapter 6).

The multiplicity of municipal governments combined with different second-tier authorities makes coordinated action across the metropolitan area very difficult. In so far as there is any form of coordination it comes from three sources. The first is that one form of authority in most of these cities is much more powerful than the rest. For example, in Buenos Aires the administration of the Federal Capital (which contains 27 per cent of the total city population) has far greater influence with central government than the individual municipalities of the Province of Buenos Aires. The intendente of the Federal Capital holds a national cabinet post and formally runs the "municipality" on behalf of the central government. Similarly, in Mexico, the mayor of the Federal District holds a cabinet position and has much more political clout than the governor of the State of Mexico, let alone the mayors of the individual municipalities within the State.

A second source of coordination, at least in theory, comes from the consultative bodies which have been established in all four mega-cities to improve communication between the different administrative units. In practice, however, these bodies achieve little because they threaten existing power structures within each administrative area. As a result, they are little more than "letterhead" bodies with little in the way of effective power.

Finally, specific functions are occasionally managed at a metropolitan level because they are administered by larger-scale government agencies, although, as will be described below, these are often undergoing privatization. Thus, electricity provision for the whole of Mexico City is run by a federal agency. In Lima, the whole metropolitan area is supplied with water and electricity by two public companies (SEDAPAL and ElectroLima respectively). In Bogotá, a different mechanism operates: water services in some neighbouring municipalities are run under contract by the Bogotá water and sewerage company; elsewhere the company sells water in bulk to the municipality. Sometimes, too, utilities may be provided by a single private company, as is the case with CHILECTRA, which provides electricity to the whole of Santiago. In Buenos Aires, two private telephone companies compete for business across the metropolitan area.

2 Strong mayors and weak councils

A common feature of local government in most large Latin American cities is the power of the executive relative to the legislature. Much of the problem relates to the weakness of the councils. Unlike some of the mayors, who sometimes hold national cabinet office and often have considerable personal influence, the councils are very weak.

Frequently, councils have only nominal powers. In the Federal District of Mexico, although recent reforms have increased the role of the Asamblea de Representantes (Representative Assembly) from a consultative to that of a legislative body it remains relatively weak. In the Federal Capital of Argentina, the Consejo Deliberante (Deliberating Council) performs a similarly restricted role. In both cities, the mayor is the dominant actor and is appointed by the national president. Elsewhere councils have more responsibility but have few real controls over the power of the mayor. The mayor appoints the key department heads, and if the council has committees to monitor their actions, they do little more than act as public "watchdogs." Whether it is a municipal president in relation to the cabildo in Mexican municipalities in the State of Mexico, the prefeito in relation to the Câmara de Vereadores in São Paulo and Rio de Janeiro, or the mayor before the Deliberating Councils in the municipalities of the Province of Buenos Aires, it is the mayor who holds most of the reins of power.

Only in Santiago de Chile do the municipal councils wield real power. Administration in the city is decentralized and each of the 34 communes directly elects a council for four years. A member of the council is elected as mayor, unless a single councillor has managed to obtain more than 35 per cent of the electoral vote, in which case he or she is appointed automatically. The mayor presides over the council but has limited powers to appoint executive officers. Local officials are civil servants, and even department heads continue from one administration to the next. This structure weakens the power of the mayor relative to the council and to the executive.

3 The dominant role of partisanship

Unlike the United States, where it is the individual rather than any allegiance to a political group that matters, in Latin America party membership is critical. It is certainly much more important than a candidate's individual qualities or his or her ability to do the job. This is clearly the case where higher political authorities appoint the chief executive, as in the Federal District of Mexico.

Of course, nomination by the party is not inevitable. In Brazil, recent elections seem to have reduced the power of the political parties. Indeed, while some candidates have won power through their allegiance to a particular party (the case in 1988 of Luiza Erundina's election for the Workers" Party in São Paulo being a good example), individual qualities appear to count more. Generally, indeed, party allegiance seems to be fickle and electors are not surprised to find candidates switching parties between elections, or forming splinter groups in loose coalitions. Leonel Brizola is perhaps the classic case of such behaviour. He has twice been elected mayor of Rio de Janeiro and once governor of the State, on each occasion representing a small minority party in coalition with other small parties.

Moreover, as local democracy spreads and electorates become more discerning, political bosses will need to select candidates for office who have some personal credibility and capacity to carry out the job. Also, the growing sense of citizenship and demands for transparency and accountability in Latin American cities are likely to intensify the emerging tension between partybased policy-making and the need to develop sound administrative practices that are less coloured by partisan considerations.⁴ An individual's qualities, together with a proven capacity to govern effectively and to develop some level of consensus among hetereogenous social, economic, and political groups, will be crucial in getting that individual or party reselected power. While political parties may be expected increasingly to develop specific urban policy platforms and manifestos at election time, and while party affiliation is likely to continue to be an important determinant in elections and appointment to public office throughout Latin America, overt partisanship in the actual practice of city governance is likely to be eschewed, and is certainly in decline.

4 Overlapping, not interlocking bureaucracies

One of the principal impediments to effective administration in Latin American cities is the lack of an overall planning authority to coordinate the functions of different sector agencies (Londoño de la Cuesta, 1992; Ward, 1990). This is particularly important in so far as there is sometimes a multiplicity of agencies with competing or parallel responsibilities. This problem is aggravated by the way that the individual agencies ignore one another's needs and programmes and, at worst, actually compete with one another. At times, strong rivalries emerge between departments which seek to develop their programmes in maverick fashion. Where decentralized organizations form an important element of national and municipal government, they tend to act independently and make little effort to collaborate (Londoño de la Cuesta, 1992). In Bogotá, ICT, the now-defunct national housing agency, frequently built homes in areas that the local planning and servicing agencies did not want developed. The housing agency was forced to develop cheap land in the periphery of the city even though the public utilities did not want to provide infrastructure in such areas. In one notorious instance, a housing estate went without water for three years when the municipal company refused to supply it (Gilbert and Ward, 1985).

5 Privatization or municipalization?

One way of cutting through public inefficiency is to privatize state agencies. Privatization also has other virtues. It releases the public sector from the responsibility of investing in expensive infrastructure and of replacing and maintaining deteriorating service networks. It also offers governments a means of cutting their budget deficits by bringing in windfall revenues. For these reasons, privatization is flavour of the decade in Latin America and among the international development banks (Roth, 1987; World Bank, 1994). Privatization may be achieved in degrees, ranging from contracting out, through private supplements, to full privatization (Pohlmann, 1993: 284-5).

Several mega-cities have privatized or are in the process of privatizing public utilities. In Buenos Aires, the gas company has been sold off, electricity provision and telephones are in private hands, water and sanitation have been privatized through concessions, and even the metro and the suburban railways are candidates for sale. In Lima, the telephone company has been sold off and steps are being taken to reprivatize the water and electricity companies (supported by a US$300 million loan from the World Bank). In Caracas, the electricity and telephone companies are privately run. And in Santiago, the provision of electricity, telephones, and cleaning is now in private hands, although water and the metro are still the responsibility of public companies.

Progress towards the privatization of public services has been much slower in Mexico City, Rio de Janeiro, and São Paulo; indeed, the tendency is almost in the other direction. In Rio de Janeiro, the electricity and telephone companies have recently reverted to public ownership. In Mexico City, despite active privatization at the national level, there has been little divestment of public services. Garbage collection and street cleaning are being opened up to private competition and the telephone system has been privatized. To date, however, no moves have been made to sell off the major public utilities or the metro. One of the city's largest and most important municipalities privatized garbage collection in 1993, only to revoke the concession four months later owing to public dissatisfaction with the private service. One of the few major successes of the Workers' Party administration in São Paulo was its takeover of the private transport system in 1991 (Jacobi, 1995: 158). Governments in these three cities are subcontracting some activities to the private sector, but they are reluctant to embrace full privatization.

6 Fiscal responsibility: Doing more with less

All mega-cities depend heavily upon transfers of funds from central government and/or from state government. Sometimes, these transfers constitute the lion's share of recurrent expenditure. In addition, urban administrations may seek federal government assistance for special projects, particularly capital investment programmes for urban infrastructure. A common feature of Latin American local finance, therefore, is its heavy dependence upon central government.

In addition, urban governments seek major loans from institutions such as the World Bank, although this may dramatically raise their indebtedness and can sometimes undermine the city budget. In Bogotá, for example, major infrastructural improvements undertaken during the 1980s raised the proportion of recurrent expenditure allocated to debt servicing from 14 per cent to 41 per cent between 1980 and 1990 (Londoño de la Cuesta, 1992). In 1990, the city was running a deficit almost half of its annual recurrent expenditure. The incoming administration to São Paulo in 1988 found that it faced a billion-dollar external debt requiring a total overhaul of the city's finances.

Cities have different sources of independent local revenues: fees, taxes on production, fines and surcharges, consumption charges, property and title transfer taxes, and so on. Usually the most important source of local revenue is taxation of local property. Of course, revenues depend upon the quality, coverage, and regular updating of the property cadaster and most major cities are busy improving their cadasters. Often, indeed, they are privatizing or subcontracting property registration and assessment levies, one way of depoliticizing the collection process.

Faced by recurrent deficits and mounting debts, many governments have made a concerted effort to increase their revenues. While locally generated income still represents a small proportion of total income, many local authorities have managed to increase their local tax yield. They have raised local property taxes, transfers and sales taxes, taxes or charges on regulatory permissions authorized, and other taxes. For the first time in many years there are signs of a political will to introduce realistic levels of taxation and an improving capacity to administer tax collection.

Every government in Latin America now recognizes the need to cut expenditure and to reduce subsidies. Most governments are reducing subsidies on public transport, infrastructure, and services. Private bus companies are receiving fewer subsidies and even public transport companies are being forced to raise fares. In Mexico, the cost of travelling on the metro and the city-run bus system has risen progressively in recent years, although both still remain heavily subsidized. Throughout Latin America charges for water and electricity are increasingly set to cover the full cost of the service. In Santiago, charges for electricity are so high that disconnection for non-payment is common in low-income settlements. Elsewhere, poorer households are protected through subsidies, the income being recovered either through imposing higher charges on the rich (as in Bogotá) or through general taxation.

7 Marginalization of the public from mega-city governance

Public participation in government is very limited in Latin America. The extreme is reached in Mexico City, where the population of the Federal District is effectively disenfranchised (Ward, 1990). As noted above, the mayor (regente) of Mexico City is appointed by the national president and in turn selects the local mayors who head the sixteen delegaciones. Only recently have the citizens of the Federal District been given the right to elect any representatives; they now vote for the Representative Assembly, formerly a consultative body which now has some legislative powers, and which will in effect become a local congress in 1997. At least the Mexican government has announced reforms in the Federal District; the next mayor will be appointed by the president from among the members of the majority party in the elected Representative Assembly.

Fortunately, in most other major cities, both the principal executive and the legislature are elected. Even here, however, participational democracy is severely constrained by the limited effective powers of the local authority. Several cities have some sort of arrangement for local sub-councils but these are weakly linked to the centre. Residents' associations are weak and have little impact on decision-making. There is little clear understanding about how to move from a structure of active social movements and non-government organizations to one of citizen participation in the process of government. To date, there has been a distinct reluctance to empower citizens in Latin America's mega-cities.