Why do some U.S. cities maintain robust public services while others falter? This article argues that racial segregation exacerbates political polarization, hindering collective investment and reducing public goods spending.

Data & Methods

* Leverages election data from 25 large U.S. cities.

* Uses demographic and financial data for over 2600 places to analyze expenditure patterns.

* Instruments segregation using the number of waterways via regression discontinuity design, addressing endogeneity concerns.

Key Findings

* Segregated municipalities exhibit higher political polarization.

* These polarized areas consistently spend less on diverse public goods, from roads to parks and social services.

Why It Matters

This research demonstrates how structural factors like segregation can systematically undermine the democratic process responsible for funding essential community resources. The findings highlight a critical mechanism linking inequality in residential patterns with tangible deficits in local government provision.