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We study the direct and spillover effects of local state capacity in Colombia. We model the determination of state capacity as a network game between municipalities and the national government We estimate this model exploiting the municipality network and the roots of local state capacity related to the presence of the colonial state and royal roads. Our estimates indicate that local state capacity decisions are strategic complements. Spillover effects are sizable, accounting for about 50 percent of the quantitative impact of an expansion in local state capacity, but network effects driven by equilibrium responses of other municipalities are much larger.

For more than a century researchers have studied Maya ruins, and sites like Tikal, Palenque, Copán, and Chichén Itzá have shaped our understanding of the Maya. Yet the lowlands of Belize, which were once home to a rich urban tradition that persisted and evolved for almost 2,000 years, are treated as peripheral to these great Classic period sites. The hot and humid climate and dense forests are inhospitable and make preservation of the ruins difficult, but this oft-ignored area reveals much about Maya urbanism and culture. Using data collected from different sites throughout the Maya lowlands, including the Vaca Plateau and the Belize River Valley, Brett Houk presents the first synthesis of these unique monuments and discusses methods for mapping and excavating. Considering the sites through the theoretical lenses of the built environment and ancient urban planning, Houk vividly reconstructs their political history, how they fit into the larger political landscape of the Classic Maya, and how the ancient cities fell apart over time.

This article seeks to shed new light on the study of decentralized natural resource governance by applying institutional theories of polycentricity-the relationships among multiple authorities with overlapping jurisdictions. The emphasis on multi-level dynamics has not penetrated empirical studies of environmental policy reforms in nonindustrial countries. On the contrary, many of today's decentralization proponents seem to be infatuated with the local sphere, expecting that local actors are always able and willing to govern their natural resources effectively. Existing studies in this area often focus exclusively on characteristics and performance of local institutions. While we certainly do not deny the importance of local institutions, we argue that institutional arrangements operating at other governance scales-such as national government agencies, international organizations, NGOs at multiple scales, and private associations-also often have critical roles to play in natural resource governance regimes, including self-organized regimes.

Leadership and Innovation in Subnational Government takes stock of promising innovations that began to appear in local government across the region of Latin America and the Caribbean during the 1990s. The purpose of this work—in contrast to many reports which document best practice—is to deepen our understanding of the genesis and evolution of change as local leaders cope with the challenges of governing in decentralized democracies. One of the most striking features exhibited by the cases in this volume is that local authorities have been change makers often without help from outside, from national or international agencies. The authors, Tim Campbell and Harald Fuhr, call these local enterprising risk takers an \"engine of change.\" Twenty specific cases of innovation have been documented in the study covering the core business areas of cities—finance, popular participation, service delivery, privatization, and personnel management. The book aims to show, in policy and practice, how to sustain this engine of change. One of the central messages of this work is that by supporting key steps in the process of innovation, donors can enjoy cost-effective impacts and help to achieve the next stages of reform in the region. But to do so, donors must focus on management and learning at the local level, building on the foundations of broad participation in public choice and working more actively to help local actors learn from each other.

Audacious Reforms examines the creation of new political institutions in three Latin American countries: direct elections for governors and mayors in Venezuela, radical municipalization in Bolivia, and direct election of the mayor of Buenos Aires in Argentina. Diverging from the usual incremental processes of political change, these cases marked a significant departure from traditional centralized governments. Such \"audacious reforms, \" explains Merilee S. Grindle, reinvent the ways in which public problems are manifested and resolved, the ways in which political actors calculate the costs and benefits of their activities, and the ways in which social groups relate to the political process. Grindle considers three central questions: Why would rational politicians choose to give up power? What accounts for the selection of some institutions rather than others? And how does the introduction of new institutions alter the nature of political actions? The case studies of Venezuela, Bolivia, and Argentina demonstrate that institutional invention must be understood from theoretical perspectives that stretch beyond immediate concerns about electoral gains and political support building. Broader theoretical perspectives on the definition of nation and state, the nature of political contests, the legitimacy of political systems, and the role of elites all must be considered. While past conflicts are not erased by reforms, in the new order there is often greater potential for more responsible, accountable, and democratic government.

Can bottom-up relief efforts lead to recovery after disasters? Conventional wisdom and contemporary public policy suggest that major crises require centralized authority to provide disaster relief goods. Using a novel set of comprehensive donation and expenditure data collected from archival records, this paper examines a bottom-up relief effort following one of the most devastating natural disasters of the nineteenth century: the Chicago Fire of 1871. Findings show that while there was no central government relief agency present, individuals, businesses, corporate entities and municipal governments were able to finance the relief effort though donations. The Chicago Relief and Aid Society, a voluntary association of agents with a stake in relief outcomes, leveraged organizational assets and constitutional rules to administer aid.

This paper shows that the stance of fiscal policy does have significant impact on the conduct of monetary policy in the United States. Further, we document that the implied fiscal-monetary policy interactions are subject to regime instability, using a Markov-switching model. Then, we develop a microfoundation of regime switches using a cheap talk game between central bank and government. As a case study, we simulate the effects of regime switches within an otherwise standard New Keynesian model using the cheap talk game in the state-space of our model.

How diversified are small town revenues? Revenue diversification is analyzed among towns governed by town meetings. Using previously developed diversification measuresy the findings confirm that these localities draw from less diverse revenue streams than other state and local governments. The reasons for these variations include differences in home rule status as well as tax and expenditure limitations imposed by states. The authors suggest that revenue allocation in these jurisdictions is substantively different from other forms of local government because these communities rely much less on sales taxation than states and municipalities. Their essay proposes possible options for improvement, along with other criteria by which small towns can assess their revenue diversification.

Despite rapid metropolitanization throughout the Americas and widespread interest in \"megacities,\" few studies have examined the new governance structures needed to address issues of citizen representation and participation and the public service challenges of population expansion and increasing urban inequalities. To fill that void, Peter K. Spink, Peter M. Ward, Robert H. Wilson, and the other contributors to this volume provide original research and analysis of the principal metropolitan areas in six federalist countries of the Americas-Argentina, Brazil, Canada, Mexico, the United States, and Venezuela. They find that a common feature of metropolitan expansion is the lack of a unified governmental structure. Using a comparative research framework, they examine the forms, functions, legitimacy, and performance of emerging governmental structures. Their cross-national study shows that existing institutional structures and political systems impede collaboration among governments in metropolitan areas. Given both the relatively few successful models at the local level and the disinterest on the part of federal governments, regional governments-states and provinces-seem to provide the most pragmatic bases for constructing metropolitan governments that are capable of efficiently delivering services. Because there is no direct path to achieve such new structures, the authors urge reform at the state and local levels to address the need to work out the politics and management structures that will function best within their own politics.

Although Chilean municipalities are not permitted to borrow, they do so through arrears and leasing contracts. A formal model of municipal indebtedness is estimated, based on a sample of 345 municipalities with yearly data from 2004 to 2007. Variables that are positively and significantly related to borrowing through arrears are: mayors closely tied to the ruling central government coalition; politically diverse municipal councils; years close to elections; and deeper municipal involvement in education. While leasing contracts appear to be insensitive to political factors, they are positively and significantly related to municipal staff managerial skills and municipal revenues per capita.