Bolivia decentralized in an effort to deepen democracy, improve public services, and make government more accountable. Unlike many countries, Bolivia succeeded. Over the past generation, public investment shifted dramatically toward primary services and resource distribution became far more equitable, partly due to the creation of new local governments. Many municipalities responded to decentralization with transparent, accountable government, yet others suffered ineptitude, corruption, or both. Why? Jean-Paul Faguet combines broad econometric data with deep qualitative evidence to investigate the social underpinnings of governance. He shows how the interaction of civic groups and business interests determines the quality of local decision making. In order to understand decentralization, Faguet argues, we must understand governance from the ground up. Drawing on his findings, he offers an evaluation of the potential benefits of decentralization and recommendations for structuring successful reform. Winner of the 2013 W.J.M. Mackenzie Prize for the best book published in political science. The book was the unanimous choice of a distinguished jury, who commented: "This is an outstanding and exemplary piece of research that teaches us how properly devolving power and money leads local government to be more responsive to local interests. The empirical analysis is a rare combination of quantitative and qualitative evidence, blending econometric analysis of local government spending over time with thorough ethnographic fieldwork in various districts." "This book promises to alter the entire debate on decentralization and will certainly make a signal contribution to the field." - James Dunkerley, Queen Mary University of London "This is a very important book that provides detailed evidence of the transformative potential of local democracy in developing countries. And it does so for a country that could have been seen as the least promising in Latin America. I value it greatly."- Roger Myerson, University of Chicago and 2007 Nobel Laureate in Economics "Faguet provides a timely analysis of the long-term effects of decentralization with rigorous methods and innovative data. It is a good example of how robust econometrics, vibrant thick descriptions, and a deep historical understanding of our objects of study can move our discipline forward by clarifying our theoretical debates."- Alexander Ruiz-Euler, University of California San Diego "The Bolivian experience is striking and this book will easily be the definitive work on the topic." - Dilip Mookherjee, Boston University "[This book] compellingly suggests the Bolivian 'decentralization shock' could be a model for other developing countries with weak institutions. Finally, those interested in current affairs can read Bolivia's decentralization success in strengthening social capital and local democracy as a necessary condition for the rise of Evo Morales and his Movement for Socialism. By empowering local communities, decentralization allowed the previously silent majority to organize from the ground up."- Joan Ricart-Huguet, Princeton University.        Decentralization is everywhere around us and yet we cannot say what, if anything, it achieves.  Proponents argue that it will deepen democracy, improve public services, and make government more accountable.  These intuitions have prompted a massive policy response across the globe, with an estimated 80-100 percent of the world's countries experimenting with reform.  But careful research has not found that it achieves any of these goals.  Is it all empty fashion?  A giant mistake?       In Decentralization and Popular Democracy, Jean-Paul Faguet uses the remarkable case of Bolivia, a radical reformer over two decades, to investigate what happens when a country decentralizes.  The answer is remarkable success leading to transformation.  Public investment shifted dramatically towards primary services and human capital formation, while the distribution of resources across the nation became much more equitable.  These changes were disproportionately driven by Bolivia's smaller, poorer, more rural municipalities investing newly devolved funds according to greatest need.  The accumulation of such micro-level changes led the Bolivian state as a whole to become more responsive to citizens nationwide.       But these successes are only the beginning.  Some municipalities responded to decentralization with transparent, accountable government, while others suffered ineptitude, corruption, and worse. Why?  In order to discover the causes of good and bad government, Faguet drives his investigation deep into the political and social underpinnings of governance.  He deploys statistical evidence covering all of Bolivia's municipalities, territory, and citizens over twenty-one years, alongside deep qualitative evidence based on fieldwork that ranges from the altiplano to the broad Eastern plains, and from the smallest h