Explaining the Varieties of Performance of Local Governments Across New and Old Democracies

The current economic crisis puts countries’ performance and government capacities in the spotlight. Although political scientists have recognized the importance of the quality of state institutions for the provision of economic growth and prosperity, there has been a serious lack of understanding of how this can be achieved. A serious gap in this developing field is the lack of reflection on the large variation in sub-national government performance. Many cities outperform their regions and countries in the quality of their institutions and public goods provision while others are lagging behind. What are the causes of this variation in government performance across different cities in old and new democracies? To what extent subnational administrative structures and economic models play a role? The central objective of this paper is to explain why government performance varies focusing mainly on financial stability and public goods delivery as the components of government performance. Drawing on the most recent developments in the political economy and local administration, this project hinges on the relationship between local level factors (size of the middle-class, economic model) and political competition as explanatory factors for this variation. Empirically, I expect that the relationship between political competition and governmental performance will be contingent on voter poverty and local economic organization. In order to test this argument, the paper employs a quantitative analysis of government performance in 600 Spanish and Romanian municipalities from 2007 to 2015. Both countries present a large subnational variation in government performance and represent both new and consolidated democracies.