The Effect of Democracy on Infrastructure Spending

The stores regime did not last more than a couple of years, but Indonesia's transition to democracy certainly did. Can we generalize from Indonesia's experience to the likely effect of democratization in other countries? There are two influences of democratization on how spending might be allocated. On one hand these local elections can increase that accountability that disciplines public spending. But there's this other effect too. These local elections are then going to increase politicians' focus on their own local constituents and under reward politicians for accounting for how other non-local Indonesians might benefit. They're in opposition to each other.