According to mainstream theories, democracy improves human development because electoral competition strengthens accountability of politicians to citizens: If politicians do not improve citizen welfare, they risk losing power. These approaches, however, neglect pathologies of political competition in many young democracies where citizen participation is low and corruption of parties high, thus reducing political responsiveness to broad societal interests. I argue that in such environments, development is driven by <italic>partisan accountability<italic> whereby politicians remain loyal to party leaders since they control candidate lists and funnel resources to lower level politicians. Pro-development practices are adopted only to the extent that they improve a party's re-election chances and maximize its expropriation of budgetary resources. I provide preliminary evidence from the local level in Bosnia and Herzegovina, which suggests that vertical, intra-party relations between mayors and regional governments improve local business environments, while inter-party diversity in decision-making bodies increases political fragmentation and unemployment.