The regime type-development nexus has long preoccupied scholars of the political economy of development. Investigation of this relationship generally has taken place at the cross-national level of analysis. In a world now dominated by a development strategy that seeks to empower local-level governments and community groups, an understanding of the development impact of the local political environment is essential. This paper examines the municipal-level development legacy of Mexico’s principal poverty alleviation program of the early 1990s, the National Solidarity Program (PRONASOL). PRONASOL’s demand-based approach to poverty alleviation reflects the dominant policy strategy being pursued across the developing world in the 1990s. Through OLS regression I explore the development consequences of distinct local-level electoral environments. The findings suggest that local-level democracy is critical for the success of the current decentralized development strategy prevalent across much of the world.