ABSTRACT
This chapter discusses the major propositions from the recent comparative literature in light of Agency for International Development (AID)/Peru experience and the additional hypotheses that emerge from analysis of that experience. Decentralization policies should establish or strengthen capabilities in national-level agencies to assist decentralized organizations and should promote appropriate interorganizational linkages among complementary capabilities at different levels. AID's experience in supporting Peruvian decentralization provides important support for each of the propositions. Decisions taken to expedite implementation during the early days of the Integrated Regional Development (IRD) project reduced its long-term institutional impact. In addition, AID/Peru experience suggests that incremental capacity building and efforts to achieve institutional reform are both necessary and potentially reinforcing in highly centralized political systems. Some of the best recent literature on decentralization focuses on the design of appropriate assistance linkages between supportive national-level agencies and decentralized organizations. Donors that establish central project funds during the initial stages of decentralization should address the issue of sustainability.
