Political Fragmentation & Economic Growth in U.S. Metropolitan Areas

This paper analyzes the impact of local political fragmentation on long-run population, employment, and per capita money income growth in 314 U.S. metropolitan areas. The results suggest a positive relationship between fragmentation and long run population growth; however, the type of fragmentation matters. Local government fragmentation in both the horizontal (cities) and vertical (special districts) are important. The results do not generalize to long run employment or per capita money income growth. These findings partially support the hypothesis that governmental fragmentation can enhance local economic growth; however, taking into account the local context in the measurement of local political structure is important.