On February 20, 2026, Ecuador's National Assembly approved an important reform to the Organic Code of Territorial Organization, Autonomy, and Decentralization (Cootad) aimed at enhancing the sustainability and efficiency of spending by decentralized autonomous governments (GAD). This legislative effort received support with 77 votes in favor, 71 against, and 2 abstentions during a session held at the Ecotec University in Samborondón, demonstrating the contentious nature of the voting process, which required a simple majority for the law's passage.

The backing for the reform came primarily from the Democratic Action National party, independent assembly members, and former members of the Citizens' Revolution party, highlighting a coalition across different political factions. Assembly member Valentina Centeno, who presented the bill, underscored the urgency and significance of the legislation, suggesting that it would optimize resource allocation and strengthen a framework established back in 2011. The approval of this legislation is positioned as a crucial step towards addressing fiscal inefficiencies within local governments in Ecuador.

As local governance and budgetary management become increasingly significant in developing nations, this reform may serve as a blueprint for other countries grappling with similar challenges in public finance. The passage of the law indicates a possible shift towards more collaborative politics, as different parties found common ground to support the urgency of effective governance in the face of economic pressures. The implications of improved fiscal management are vital not only for the local governance but also for enhancing overall public service delivery in Ecuador.