Political Decentralization and Corruption: Exploring the Conditional Role of Parties

This paper investigates how national levels of corruption are influenced by the interaction of two factors: the presence of local elections and the organizational structure of national parties. Previous studies have focused primarily on the role of fiscal decentralization on corruption and have mostly ignored political context. We argue here that corruption will be lower when local governments are more accountable to and more transparent towards their constituents. This beneficial arrangement is most likely, we find, when local elections are combined with non-integrated political parties, that is, where party institutions themselves are decentralized from national control. Such an institutional arrangement maximizes local accountability by putting the decision to nominate and elect local leaders in the hands of those best in a position to evaluate their honesty – local electors. In our empirical analyses, using new data in a series of expansive models across multiple countries and years, we find support for our arguments.