Government Fragmentation and Public Goods Provision

Citation:
Grossman, G, Pierskalla JH, Dean EB.  2017.  Government Fragmentation and Public Goods Provision. Journal of Politics.

Abstract:

We investigate the effects of government fragmentation on the quality of public services. We argue that an increase in the number of regional governments has two effects: (1) it redistributes fiscal and administrative resources to under-served regions and (2) affects the quality of the pool from which future leaders are drawn, while encouraging yardstick competition. Extreme government fragmentation, however, limits efficiency gains by diluting informational signals about leader quality, and by reducing administrative capacity and economies of scale. We test this argument using original data on the number of regional governments in Sub-Saharan Africa (1960-2012). Consistent with our theoretical expectations, we find robust evidence for an initial increase in the quality of services provision following regional government splits, which levels off at high levels of regional fragmentation. Three distinct difference-in-difference analyses of micro-level, geo-referenced data on health outcomes in Malawi, Nigeria, and Uganda further support our theoretical argument.

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