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Rethinking The Political Economy Of Decentralization: How Elections And Parties Shape The Provision Of Local Public Goods, Raúl A. Ponce Rodriguez, Charles R. Hankla, Jorge Martinez-Vazquez, Eunice Heridia-Ortiz

Political Science Faculty Publications

We investigate which political institutions will improve the delivery of public goods in decentralized systems. We begin with a formal extension of Oates’ influential “decentralization theorem” to include the presence of inter-jurisdictional spillovers. Our new model, which we term the “strong decentralization theorem,” indicates that, when spillovers are present, the impact of decentralization will depend on the structure of a country’s political system. More specifically, our model suggests that the interaction of democratic decentralization (the presence of popularly elected sub-national governments) and party centralization (the power of national party leaders over sub-national office-seekers) will produce the best outcomes. To test …