Decentralization is generally accepted as one of the defining or distinguishing features of the third wave of democratic transition in Latin America. Decentralization, in fact, is commonly understood as an index and an agent of democratization. This article tests this optimistic perspective inherent in the literature and examines the effects of decentralization policies on the design of local development programs in a northern state of Mexico, Chihuahua. The case of Chihuahua shows that, although decentralization policies have expanded local participation in policy design and making, they have failed to bring equal access to local state power by various local social groups. After the decentralization of development programs, internationalized local capitalists have gained privileged access to political power. Thus, decentralization can easily be a vehicle of class domination and may not be a panacea for unequal power relationships in local politics.
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