In developing countries, tribes, clans, religious groups and other traditional leaders often control parallel governance zones outside the reach of the state. How does governance fare in these traditional zones relative to governance exercised by state institutions? To explore plausible mechanisms, we collected a household survey in over 90 villages. Using a geographic discontinuity approach to identify causal effects, we find strong evidence that political autonomy enhances development outcomes for indigenous communities in southern Mexico. In communities with party-based political systems we find that provision of basic services is politically mediated, distributed to households based on clientelism. In indigenous villages, direct participatory democracy practices lead instead to a more egalitarian distribution of services with a less notable anti-poor bias.

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Beatriz Magaloni

Funding provided by
• FSI Action Fund