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In the last two decades, decentralization policies swept across Latin American countries. Both advocates and critics of decentralization took for granted that these reforms would increase the power of subnational governments. However, empirical observations contradict this assumption. Pointing to the limitations of static (either institutional or rational choice) explanations, and proposing a three dimensional definition of decentralization, I will argue that the sequencing of decentralization reforms, and the type of political coalitions that initiated each round of reforms are two key determinants of the resulting balance of power between levels of governments. My hypothesis is that these two factors, sequencing and political coalitions, led to the strengthening of subnational governments in Colombia and Mexico, and to the strengthening of the national government in Argentina. I will test my hypothesis by comparing the ways in which decentralization policies unfolded in Argentina, Mexico, and Colombia between 1982 and 1999, and by comparing the composition of the political coalitions that started each round of reforms in the three countries. Finally, I will use a combination of quantitative and qualitative methods to measure my dependent variable, balance of power between levels of government.