Building the theory: majoritarian electoral systems and non-integrated parties

We study the relative merits of democratic decentralization (subnational elections) versus centralization (national elections) for economies with majoritarian electoral systems and non-integrated parties (nomination of candidates are determined by primary elections). We show that the joint interaction of general elections (national and subnational) and the participation rules of primary elections (whether elections are blanket or closed) have important implications for the provision of local public goods. General elections create sufficient electoral accountability for politicians to produce local public goods that benefit the society as a whole. However, the participation rules of primary elections might create incentives for politicians to target local public goods to benefit a minority of voters. In particular, blanket primaries might lead to local public goods with broad benefits in the society but closed primaries to the targeting of these goods to particular groups. We show that the relative benefits of democratic decentralization versus centralization are critically dependent on the participation rules of primary elections.