The Triple Engine Effect: Does Full Vertical Alignment Unlock the State?

Does "full vertical alignment"—political congruence across national, state, and local tiers—drive economic development? Using a sharp regression discontinuity design based on close state elections in India, we estimate the causal effects of multilevel alignment on growth, inequality, and public service delivery. We find that full vertical alignment reduces annual nightlight-based inequality by 2.5%, boosts local growth by 2%, and significantly expands welfare access and banking penetration. Critically, these redistributive effects are concentrated in marginalized (SC/ST) constituencies and are absent under partial (dyadic) alignment. These results suggest a vital non-linearity in political economy: a "critical mass" of congruence is required to overcome entrenched bureaucratic friction and unlock the state’s distributive capacity.