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."