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Rethinking the political economy of decentralization: how elections and parties shape the provision of local public goods

Author

Listed:
  • Raúl A. Ponce-Rodríguez
  • Charles R. Hankla
  • Jorge Martinez-Vazquez
  • Eunice Heredia-Ortiz

Abstract

As more and more of the world’s states devolve power and resources to sub-national governments, decentralization has emerged as one of the most important global trends of the new century. Yet there is still no consensus concerning the benefits of decentralization and how to design institutions that can realize these benefits. In this paper, we investigate the political conditions under which the decentralization of authority will improve the delivery of public goods. Building off Oates’ “decentralization theorem” to include inter-jurisdictional spillovers, we develop a new theory suggesting that the interaction of democratic decentralization (the popular election of sub-national governments) and party centralization (the power of national party leaders over sub-national office-seekers) will produce the best service delivery outcomes. To test this argument empirically, we develop a new dataset of sub-national political institutions. Our analyses, which examine educational and health service delivery in 135 countries across 30 years, provide support for our theoretical expectations.

Suggested Citation

  • Raúl A. Ponce-Rodríguez & Charles R. Hankla & Jorge Martinez-Vazquez & Eunice Heredia-Ortiz, 2016. "Rethinking the political economy of decentralization: how elections and parties shape the provision of local public goods," Working Papers. Collection A: Public economics, governance and decentralization 1603, Universidade de Vigo, GEN - Governance and Economics research Network.
  • Handle: RePEc:gov:wpaper:1603
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    File URL: http://infogen.webs.uvigo.es/WP/WP1603.pdf
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    References listed on IDEAS

    as
    1. Jorge Martinez-Vazquez & Santiago Lago-Peñas & Agnese Sacchi, 2017. "The Impact Of Fiscal Decentralization: A Survey," Journal of Economic Surveys, Wiley Blackwell, vol. 31(4), pages 1095-1129, September.
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    6. Myerson, Roger B., 2006. "Federalism and Incentives for Success of Democracy," Quarterly Journal of Political Science, now publishers, pages 3-23.
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    Citations

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    Cited by:

    1. Raul A. Ponce-Rodriguez & Charles R. Hankla & Jorge Martinez-Vazquez & Eunice Heredia-Ortiz, 2016. "Political Institutions and Federalism: A "Strong" Decentralization Theorem," International Center for Public Policy Working Paper Series, at AYSPS, GSU paper1603, International Center for Public Policy, Andrew Young School of Policy Studies, Georgia State University.
    2. Raul A. Ponce-Rodriguez & Charles R. Hankla & Jorge Martinez-Vazquez & Eunice Heredia-Ortiz, 2017. "The Provision of Local Public Goods in Proportional Representation Electoral Systems with Closed and Open Party Lists," International Center for Public Policy Working Paper Series, at AYSPS, GSU paper1714, International Center for Public Policy, Andrew Young School of Policy Studies, Georgia State University.
    3. Estache, Antonio & Garsous, Grégoire & Seroa da Motta, Ronaldo, 2016. "Shared Mandates, Moral Hazard, and Political (Mis)alignment in a Decentralized Economy," World Development, Elsevier, vol. 83(C), pages 98-110.
    4. repec:bla:jecsur:v:31:y:2017:i:4:p:1095-1129 is not listed on IDEAS
    5. Jorge Martinez-Vazquez & Santiago Lago-Peñas & Agnese Sacchi, 2017. "The Impact Of Fiscal Decentralization: A Survey," Journal of Economic Surveys, Wiley Blackwell, vol. 31(4), pages 1095-1129, September.
    6. María F. Prada & Graciana Rucci & Sergio S. Urzúa, 2015. "The Effect of Mandated Child Care on Female Wages in Chile," NBER Working Papers 21080, National Bureau of Economic Research, Inc.

    More about this item

    Keywords

    decentralization;

    JEL classification:

    • H70 - Public Economics - - State and Local Government; Intergovernmental Relations - - - General
    • H71 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Taxation, Subsidies, and Revenue
    • H72 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Budget and Expenditures
    • H73 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Interjurisdictional Differentials and Their Effects
    • H74 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Borrowing
    • H77 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Intergovernmental Relations; Federalism

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