Decentralization can shift the focus of political competition from the national level to the local level. This can have an effect on party discipline within national parties. This is especially the case for national parties that have strongly centralized structures, such as those that directly appoint candidates for positions at local or regional level. Political decentralization means that there are more positions in local governance that are directly elected. This gives more opportunities for local politicians and political movements to run for office without the support of a national political party. This can have a negative effect on party discipline and cohesion.

Political and fiscal decentralization can break the link of dependence between national and local political leaders by allowing local politicians to advance their own electoral goals. This can affect the balance of power inside national party organizations. When elections focus on local or regional issues, the balance of power within national party structures can shift from the center to the periphery.

For example, political and fiscal decentralization in Colombia created incentives for regional leaders to distance themselves from the national leadership of their parties in order to strengthen their own support base. The extensive fiscal decentralization of Colombia contributed to the fragmentation of parties and helped the emergence of important regional political movements.