Polity Size and Local Government Performance: Evidence from India

Developing countries have increasingly decentralized power to local governments. This paper studies the implications of a central element of decentralization (polity size) using population- based discontinuities that determine local government boundaries for over 100,000 Indian villages. Over the short and long run, individuals allocated into local governments with smaller populations have better access to public goods. We provide suggestive evidence that these results are related to heightened civic engagement and stronger political incentives, but not to other mechanisms such as elite capture.