Party system nationalization, party centralization and legislative de/centralization in federal democracies

Federal systems have centralized at a rapid pace since the second half of the twentieth century. Subnational legislatures tend to legislate less and on fewer policy matters. Legislative competencies shift to the federal legislature through constitutional amendments or enactment of federal laws. I argue that this is due to the nationalization and centralization of parties and party systems. In federations with highly nationalized and centralized party systems, transaction costs of reforming the constitutional federal pact will be lower than in federations with regionalized systems and decentralized parties. I test this argument with data on federal elections and federal de/centralization between 1945 and 2010 in 11 federal countries. I use a two-way fixed effects strategy to confirm my argument that party-system nationalization is the main driving factor behind legislative centralization in federal systems. I test my causal mechanism through a multilevel linear model and find that it is Party Nationalization that causes legislative centralization in federal democracies.