Tanzi, in Chapter 2, poses some unfashionable personal views. He argues that if countries
are not already committed to decentralization, they should consider alternatives to it
and its potential pitfalls. Often decentralization is seen as a response to failed policies –
the solution may be to improve the current policies, such as skewed or inefficient spending.
Often privatization, and reducing the role of the state may be a preferable alternative –
with a smaller government, there may be less or little to decentralize. In the extreme,
if local preferences dominate especially in very large countries, then breaking them
into smaller states may well be a solution. This has happened as in Yugoslavia and
Czechoslovakia.