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Sandra León, "How does decentralization affect electoral competition of state-wide parties? Evidence from Spain," Party Politics, 20 (May 2014), 391-402, [Available at http://ppq.sagepub.com/content/vol20/issue3/ ]

First paragraph:
According to the classical normative view of welfare economics, decentralization enhances control of incumbents by bringing government closer to citizens and removing information asymmetries between them. Competition between jurisdictions reinforces hard-budget constraints and ensures that politicians' incentives are efficiency-oriented (Brennan and Buchanan, 1980; Inman and Rubinfeld, 1997 Musgrave, 1959; Oates, 1972; Qian and Weingast, 1997: 131-132; Weingast, 1995). This perspective is grounded in the assumption that dual accountability works: voters are expected both to distinguish responsibilities across levels of government and evaluate them on the basis of policy outcomes that belong to their areas of responsibility. However, dual accountability is hampered by both a highly intertwined distribution of power across levels of government that blurs clarity of responsibility and the lack of isolation of regional elections from national politics, which render the former as 'second-order' elections (Anderson and Ward, 1996; McLean et al., 1996; Reif and Schmitt, 1980).

Figures and Tables:
Table 1. Testing the existence of electoral externalities.
Table 2. Testing decentralization hypothesis (I).
Table 3. Testing the decentralization hypothesis (II).
Table 4. Testing the impact of regionalist parties on electoral externalities.
Figure 1. Evolution of per capita regional financing across different groups of regions (1986-2007).

Last Paragraph:
Even if empirical evidence on regional accountability is provided, the weakening of electoral externalities has further implications for the economic and political stability of federations that may counterbalance its positive effects on accountability. The most important advantage associated with the existence of high electoral externalities is that they prevent regional leaders from opportunistic behaviour. This is so because electoral interdependences between national and regional party co-partisans prevent the latter from any political action that may have a negative impact on the electoral prospects of the national party. Any strategy that hampers the national party label may eventually boomerang on regional leaders through national coattails. This argument accounts for the existence of irresponsible fiscal behaviour (higher levels of sub-national deficits) in states or provinces that are not ruled by the same party at central level (Jones et al., 2000; Rodden, 2006; Rodden and Wibbels, 2002). In addition, heterogeneity and policy differentiation in the electoral platforms across jurisdictions may hamper national parties' ability to coordinate and implement the policy and economic agenda (Caramani, 2004; Chhibber and Kollman, 2004; Filippov et al., 2004; Garman et al., 2001; Jones and Mainwaring, 2003). In summary, these final caveats suggest that the implications of low electoral interdependences in highly decentralized systems go beyond the role of national coat-tails in state and provincial elections and point to the existence of a trade-off between potential gains in regional accountability and costs in terms of political or economic stability.

Last updated April 2014