Do Party Systems Count?

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Abstract
Delivery of public goods varies significantly across the Indian states. This article argues that differences in state government expenditures are largely the result of differences in their party systems. Using macroeconomic data from 1967 to 1997 as well as postelection voter surveys, we demonstrate that states with two-party competition provide more public goods than states with multiparty competition, which, we argue, reflects differing mobilization strategies. In two-party systems, political parties require support from many social groups and therefore provide public goods to win elections. In multiparty systems, needing only a plurality of votes to win, parties use club, rather than public, goods to mobilize smaller segments of the population. In stressing the impact of party systems on state government performance in India, this article differs from recent political economy research, which has stressed either the effect of particular political parties or ethnic divisions on government performance and public goods delivery.