and accountability of the states could help improve the quality of services and citizen satisfaction. So, a good package would link the two. The question is: How?

Currently the federal government retains little authority in the social sectors other than to negotiate wages with the unions. For teachers, after national-level negotiations are finished every year, each state-level section of the union negotiates a second additional package of benefits with its state, and usually the state that gives the most concessions sets the national standard, since the union is more coordinated nationwide than the state governments. The states do not want to take over all the wage bargaining directly, but if a board of state secretaries of education participated in the national negotiations and set guidelines for the state-level ones, the outcomes might be more fair and sustainable. The states also want to gain control over other personnel issues, like assignment of positions to schools and of personnel to those positions, supervision and evaluation, and enforcement of accountability for parental and community satisfaction with the quality of service. At present the unions, led by the federal union in each sector, effectively hold this authority, which they inherited from their close political relationship with the PRI and formerly the federal government. Indeed, their power may have grown in the relative vacuum left when the federal government ended its direct control of the sectors. Unions have a valuable role to play in representing the interests of employees vis à vis management, but it is a perversion when the union takes over management and supervision, as is the case in many state-level social sectors. Working together the state and the federal governments could help solve this problem, although neither could do it alone. For instance, one part of the authorityaccountability package could be for the federal and state governments to make wage concessions to the union conditional on things like independent (non-union) supervision and assignment of teachers where the need is, as indicated by the residence of school-age children. Then the states and the teachers unions would have the incentive to work together to achieve such aims in ways that make a sustainable improvement in the quality and equity of service delivery.

While state accountability to the federal government has some attractions, along the lines of the German model, the Mexican federal government lacks the constitutional authority to demand that accountability, and the practical politics would be difficult if the states could call on local popular support to resist federal encroachment. On the other hand, the federal government could more likely enlist popular support if it made more effective delegation of authority to the states conditional upon state-level reforms to improve transparency and accountability to the local populace. To do this, the other part of the authority-accountability bargaining package could be for the federal government to make increased authority for the states (or perhaps increased transfers not earmarked for wages) conditional on actions like the publication of teacher attendance, monetary allocations, and school-by-school data on student performance. The last item would require establishment or improvement of standardized testing.<sup>13</sup> Another key issue in the discussions of education and health decentralization is how Federal resources should be allocated among the various states and within states. Paqueo, Lopez-Acevedo and Parandekar (2003) shows that there are two approaches to this question for the education sector: “(a) bilateral negotiations between the Federal government and states with little transparency as to the rules; and (b) formula based distribution.” The author finds that the former approach can led to allocation results that appear contrary to policy objectives like equity

> 13 The state of Nuevo Leon now makes evaluations of each of its public schools available on the internet

> (educacion.nl.gob.mx), which illustrates the opening of possibilities and could serve as an example for other states.

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