Decentralization requires a particular condition to function, especially when initial endowment is less favorable. The sceptics of decentralization argued that it hinders public goods delivery by incentivizing subnational government to behave opportun...
Decentralization requires a particular condition to function, especially when initial endowment is less favorable. The sceptics of decentralization argued that it hinders public goods delivery by incentivizing subnational government to behave opportunistic. Considering that a lack of local public good is a sign of ineffective decentralization, I found the vertical party competition produces a better policy outcome. My statistical analysis shows that the competition between national and regional parties commit incumbents to produce local public goods. But horizontal competition between regional parties incentivize the regional agents to coordinate one another to expand a common pool of rent. And it necessarily lowers the incentives to provide local public goods. I analyzed the Indian states from 2004 to 2020 with random effects model. Finally, the result is consistent to my hypotheses.