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The Political Determinants of Federal Expenditure at the State Level
Abstract
It has been shown that states with higher per capita senate representation have higher federal spending per capita (Atlas, C. M., Gilligan, T. A., Hendershott, R. J. and Zupan, M. A. (1995). American Economic Review 85: 624–629). With a more recent data sample, more highly disaggregated data and a different set of political control variables, we are able to confirm the main result of Atlas et al. that per capita senate representation is positively related to federal expenditure. This effect is strongest for procurement expenditures. By contrast, we do not find support for their result that spending increases with per capita representation in the House of Representatives. Several other political variables are found to be significant in a subset of the expenditure equations. Copyright Springer Science + Business Media, Inc. 2005
... Since Albouy (2013) is the only study that examined how political alignment at the federal level influences the distribution of federal transportation grants, we expand our literature review to include prior research concerning various categories of federal grant spending, not just transportation grants. Hoover and Pecorino (2005) found evidence that states with more House members in the majority received more federal grant spending per capita. They also showed that having more legislators in the party of the president was worth more federal grant spending as well. ...
... 5 Both Larcinese et al. (2006) and Berry et al. (2010) showed that more House members in the party of the president was worth more total federal spending. 6 Lastly, our expectations for how alignment between the governor and the president should influence transportation grants is informed by Hoover and Pecorino (2005) and Larcinese et al. (2006). Both found evidence that a state receives more funding per capita when the governor and the president are in the same party compared to when they are not. ...
... Both found evidence that a state receives more funding per capita when the governor and the president are in the same party compared to when they are not. Hoover and Pecorino (2005) only found this relationship mattered for federal procurement spending, whereas Larcinese et al. (2006) found the effect with respect to high-variation spending. ...
Using data from the Department of Transportation's Federal Highway Administration, we examine whether political ideology and political alignment a�ect how much a state receives in per-capita highway funding. For the period 1994 { 2008, we �nd evidence that Republican-dominated House of Representatives delegations received more highway funding per capita compared with Democratic delegations, especially in states with below average urban population shares. Overall, the distribution of highway spending during this time period appears to have been determined by political, rather than deterministic, considerations. In a way, it is consistent with how the Interstate Highway System has distributed Republican voters to rural areas.
... Importantly, Bickers and Stein identified an effect associated with a change in majority control of the House, however, their analysis did not extend to the Senate. Hoover and Pecorino (2005) use the spending categories from the Consolidated Federal Funds Report (CFFR) and find weak evidence of majority party effects. An advantage of Hoover and Pecorino's study over Levitt and Snyder (1995) is that their sample period, 1983-1999, included majority party changes in both the Senate and the House of Representatives. ...
... Albouy (2013) estimated party effects over the period 1983-2004. He was able to take advantage of slightly more changes in majority control of the Senate than Hoover and Pecorino (2005) but the number of changes within the House remained the same. Specifically, majority control of the Senate changed five times over this period. ...
... Wright (1974) argued that the Roosevelt administration, which had considerable power over the allocation of New Deal spending, targeted expenditures in order to maximize electoral votes. Hoover and Pecorino (2005) controlled for the percentage of a state's house delegation and the number of senators in the same party as the sitting president. The relationships between federal grant spending and both the percentage of House delegates and the number of senators in the same party as the president were positive, highly significant, and robust to a number of different specifications. ...
Research on the distribution of federal expenditures has provided mixed evidence showing that states with more legislators who belong to the president’s party and states with more legislators in the chamber majority tend to receive a larger allocation of federal funds. We add to this research by considering how political polarization and political alignment impact these presidential and congressional determinants of how the domestic US budget is distributed to the states. Our results show that states with a larger percentage of senators in the majority can secure a larger share of federal grant expenditures per capita when political polarization is relatively low.
... Bennett and Mayberry (1979) and Holcombe and Zardkoohi (1981) developed early studies claiming that overrepresented states tend to receive more federal grants per capita. The claim, supported by several other works (see Atlas et al. 1995;Hoover and Pecorino 2005;Lee 1998), is that the political benefits from a marginal dollar of increased grants to a small and overrepresented state are greater than a marginal dollar of increased grants to a large state in which the per capita impact is smaller. Although part of the comparative literature on the topic reached similar conclusions (see Gibson et al. 2004;Gibson and Calvo 2000;Gordin 2006;Rodden 2010;Samuels and Snyder 2001), other studies did not find overrepresentation to be a relevant factor in explaining changes in the allocation of federal funds (González and Mamone 2012;Lodola 2005). ...
... Several scholars expect overrepresentation to influence the distribution of federal grants (Atlas et al. 1995;Gibson and Calvo 2000;Gibson et al. 2004;Holcombe and Samuels and Snyder 2001;Hoover and Pecorino 2005). 18 This article furnishes further evidence to the discussion including this variable as a control in the different models. ...
... 22 The coefficient for overrepresentation is statistically significant in most models. These findings are consistent to what several authors reported in their studies on the United States and the European Union (see Atlas et al. 1995;Hoover and Pecorino 2005;Lee 2000;Rodden 2002). Despite being statistically significant, the coefficient is always smaller than the ones for the variables in the main models presented in this article. ...
... Bennett and Mayberry (1979) and Holcombe and Zardkoohi (1981) developed early studies claiming that overrepresented states tend to receive more federal grants per capita. The claim, supported by several other works (see Atlas et al. 1995;Hoover and Pecorino 2005;Lee 1998), is that the political benefits from a marginal dollar of increased grants to a small and overrepresented state are greater than a marginal dollar of increased grants to a large state in which the per capita impact is smaller. Although part of the comparative literature on the topic reached similar conclusions (see Gibson et al. 2004;Gibson and Calvo 2000;Gordin 2006;Rodden 2010;Samuels and Snyder 2001), other studies did not find overrepresentation to be a relevant factor in explaining changes in the allocation of federal funds (González and Mamone 2012;Lodola 2005). ...
... Several scholars expect overrepresentation to influence the distribution of federal grants (Atlas et al. 1995;Gibson and Calvo 2000;Gibson et al. 2004;Holcombe and Samuels and Snyder 2001;Hoover and Pecorino 2005). 18 This article furnishes further evidence to the discussion including this variable as a control in the different models. ...
... 22 The coefficient for overrepresentation is statistically significant in most models. These findings are consistent to what several authors reported in their studies on the United States and the European Union (see Atlas et al. 1995;Hoover and Pecorino 2005;Lee 2000;Rodden 2002). Despite being statistically significant, the coefficient is always smaller than the ones for the variables in the main models presented in this article. ...
This article studies the main factors that affect the allocation of non-earmarked federal funds to subnational units in Argentina
between 1999 and 2009. The main contribution is that it brings presidential popularity together with presidential structural
and partisan preferences for distribution into the analysis. It argues that electorally strong and popular presidents tend
to increase transfers to developing districts and reduce allocations to richer districts. Investing in developing provinces
is more efficient, and governors from these districts tend to support redistributive presidents and be weaker political challengers
than governors from richer units. In contrast, weaker presidents are less capable of resisting pressures from governors from
larger and richer districts. There is also more distribution to developing regions when presidents have a larger share of
partisan allies there and fewer in richer states. The article discusses these results, compares them with competitive claims,
and explores implications for the comparative debate.
... Importantly, Bickers and Stein identified an effect associated with a change in majority control of the House, however, their analysis did not extend to the Senate. Hoover and Pecorino (2005) use the spending categories from the Consolidated Federal Funds Report (CFFR) and find weak evidence of majority party effects. An advantage of Hoover and Pecorino's study over Levitt and Snyder (1995) is that their sample period, 1983-1999, included majority party changes in both the Senate and the House of Representatives. ...
... Albouy (2013) estimated party effects over the period 1983-2004. He was able to take advantage of slightly more changes in majority control of the Senate than Hoover and Pecorino (2005) but the number of changes within the House remained the same. Specifically, majority control of the Senate changed five times over this period. ...
... Wright (1974) argued that the Roosevelt administration, which had considerable power over the allocation of New Deal spending, targeted expenditures in order to maximize electoral votes. Hoover and Pecorino (2005) controlled for the percentage of a state's house delegation and the number of senators in the same party as the sitting president. The relationships between federal grant spending and both the percentage of House delegates and the number of senators in the same party as the president were positive, highly significant, and robust to a number of different specifications. ...
Research on the distribution of federal expenditures has provided mixed evidence showing that states with more legislators who belong to the president's party and states with more legislators in the chamber majority tend to receive a larger allocation of federal funds. We add to this research by considering how political polarization and political alignment impact these presidential and congressional determinants of how the domestic US budget is distributed to the states. Using dynamic fixed-effects methods we find robust evidence that the benefits of having the entire senate delegation in the chamber majority is conditioned on the level of political polarization in the Senate and on whether or not both chambers of Congress are controlled by the same party.
... Focussing on Senate overrepresentation, this amounts to estimating the following equation: spending between under and overrepresented states. 8 It is important to point out that there is a lag between the appropriation of federal funds and the moment 7 ...
... However, the signi…cance disappears in the larger sample. 10 Similarly to Hoover and Pecorino (2005) we …nd that the coe¢ cient of over-representation in the procurement equation is positive and signi…cant: this result, however, is not robust to clustering the standard errors at the state level. 11 The rationale for introducing the political controls that we use can be found in a vast literature in both to cite just a few. ...
... Two crucial aspects of the current literature deserve, in our view, particular attention. First, as shown byAtlas et al. (1995) andHoover and Pecorino (2005), the e¤ects of overrepresentation are found on spending categories such as direct payments to individuals, salaries and pensions, that should be less prone to political manipulation. Second, the evidence of any di¤erence in federal spending in size of a state.Table 1also reports average federal spending per capita by state in the period considered, showing that there is no clear pattern linking Senate overrepresentation and ...
We analyze the relationship between Congressional representation and federal bud-get allocation to the US federal states during the period 1978-2002. Using di¤erent spending categories, we investigate whether small states, which are typically overrep-resented in the Senate, receive signi…cantly more spending than the underrepresented large states. Contrary to existing studies, we …nd that defense and procurement spend-ing are not inuenced by overrepresentation. On the other hand, less manipulable spending categories, such as direct payments to individuals, grants and salaries, seem to be a¤ected. However, once state-speci…c trends -largely due to population trends -are taken into account, apart from a small e¤ect on defense spending, we do not …nd any further evidence of overrepresentation bias on federal budget allocation. Hence, our results run against the hypothesis of small state advantage in the distribution of federal monies. We are grateful to seminar participants at LSE (EOPP work in progress) and Bristol (Public Economics Week-End) for their useful comments.
... including procurement or defense expenditure. He divided spending into three categories: redistributive, discretionary distributive and nondiscretionary distributive. Only for this last category, including formulas produced by the political process, Lee finds a significant positive effect of senate representation on per capita state level spending. Hoover and Pecorino (2004) look at a different time 1 At district level, Ansolabehere et al. (2002) analyze the effect of unequal representation prior to the 1960's and the equalizing impact on state transfers to counties following the court-ordered redistricting in the 1960s. period (19831984198519861987198819891990199119921993199419951996199719981999) and a bro ...
... Two important aspects of the current literature deserve in our view particular attention. First, spending categories such as entitlements, salaries and retirement that should be less prone to political manipulation, are indeed affected by over-representation as shown by Atlas et al. (1995) and Hoover and Pecorino (2005). Second, the evidence of big differences in federal spending in cross section regression is weak (Lee, 1998; Knight, 2006) and studies finding a strong effect of overrepresentation (Atlas et al.1995, Hoover and Pecorino 2005, Larcinese et al. 2006 ) rely on within state variation to identify overrepresentation in fixed effect regressions. ...
... The same holds when we consider more disaggregated spending categories such as direct payments to individuals, grants, and salaries. Importantly, we also show that while the coefficient of senators per capita may suffer from a considerable upward bias when state trends are omitted, the results on other political variables commonly used in the literature, such as the partizan alignment between the president and the state governor (Hoover and Pecorino 2005, Larcinese et al. 2006 ) are robust to the introduction of state trends. Overall our results show that small and big states do not get significantly different shares of the federal pie. ...
We analyze the relationship between Congressional overrepresentation and fed- eral budget allocation to the states during the period 1978-2002. Using different spending categories, we investigate whether small states, which are typically over- represented in both the senate and the house, receive significantly more spending than the underepresented large states. Contrary to existing studies, we find that defense and procurement spending are not influenced by overrepresentation, while less manipulable spending categories, such as entitlment grants and salaries, seem to be affected. However, once state specific trends - largely due to population trends - are taken into account, we do not find any evidence of overrepresentation bias on federal spending. Hence overall our results run against the hypothesis of small state advantage in the federal budget allocation.
... Their results suggest that the president rewards states in which he won by a large margin. Hoover and Pecorino (2005) also include a wide range of variables, including presidential variables in their analysis. They also find some evidence that the governor's party alignment with the president results in more spending for the state. ...
... Our paper is most closely related to last three above. As in Larcinese, Rizzo and Testa (2006) and Hoover and Pecorino (2005) we analyze a wide range of political variables. As in Bickers and Stein (2000) are analyzing the effects of the Republican takeover of 1994. ...
... the small state effect whereby smaller states obtain a higher level of spending due to their overrepresentation in the senate. Atlas et al. identify this effect by using senators per capita as an explanatory variable. They analyze spending in three categories (defense, entitlement and all other) and find a large spending bias towards small states. Hoover and Pecorino (2005) conduct a similar analysis with spending divided into five categories (retirement, wages and salaries, grants, procurement and other). They find that senators per capita has more explanatory power in categories where one would expect political influence to be more important. In particular, there is a large estimated effect on procuremen ...
With the election of 1994, the Republican party gained control of both houses of the U.S. Congress for the first time since 1954. In this paper, we analyze whether this change in party control had significant effects on the determinants of federal spending at the state level. To perform this analysis, we utilize panel data on federal spending, at the state level, over the years 1983-2004. We allow for a break in the sample to analyze whether the political determinants of state level spending differed after the election of 1994. There is little evidence that a presence in the house or senate majority yields positive spending effects prior to the election of 1994, but a positive spending effect does emerge after the Republican takeover. Surprisingly, there is evidence that spending became more redistributive (measured at the state level) in the later period.
... La evidencia empírica del efecto de determinantes políticos sobre el Presupuesto se concentra básicamente en EEUU, caracterizado por un sistema federal de gobierno, donde tanto el Congreso como el Presidente ejercen influencias sobre las decisiones de gastos y transferencias (Atlas et al, 1995; Hoover y Pecorino, 2005; Berry et al, 2010). Argentina, el país bajo análisis en este trabajo, aunque comparte este arreglo institucional con EEUU, el rol del Congreso en el proceso y control del presupuesto federal ha sido limitado, siendo más importante la "política del presidente" (Abuelafia et al, 2005;Saiegh et al, 2002). Bercoff y Meloni (2009) definen a la Argentina como una "democracia emergente" caracterizada por un sistema político en el que el Poder Ejecutivo absorbe funciones correspondientes al Poder Legislativo, dando lugar a lo que se ha denominado como el "hiper-presidencialismo" argentino. ...
... Es posible que solo ciertos componentes del presupuesto se vean afectados por el mecanismo político (Hoover y Pecorino, 2005). Entonces, se consideran las siguientes variables dependientes (y), expresadas en términos per cápita y en valores constantes: i. PBG pc: PBG per cápita a valores constantes; ii. ...
Estudio de los determinantes económicos, demográficos y políticos de la distribución del Presupuesto Nacional y las Transferencias intergubernamentales entre las provincias en la Argentina. 1995-2010
ISSN1852-0022
IBSN 978-987-28590-2-2
... Bennett y Mayberry (1979) y Holcombe y Zardkoohi (1981) desarrollaron los primeros estudios alegando que los estados legislativamente sobrerrepresentados tienden a recibir más fondos federales per cápita. El argumento, sostenido también por otros trabajos posteriores (ver Atlas et al., 1995;Lee, 1998;Hoover y Pecorino, 2005), es que los beneficios políticos de un aumento de un peso marginal en los fondos a un Estado pequeño y sobrerrepresentado son mayores que los del aumento de un peso marginal en un Estado grande y poblado, en el que el impacto per cápita es menor. Varios estudios de la literatura comparada abordaron el rol de esta variable (ver Gibson et al., 2004;Gibson y Calvo, 2000;Gordin, 2006;Lodola, 2005;Rodden, 2010;Samuels y Snyder, 2001). ...
... El coeficiente de la sobrerrepresentación es estadísticamente significativo en la mayoría de los modelos. Estos resultados son consistentes con lo que varios autores reportaron en sus estudios sobre los Estados Unidos y la Unión Europea (ver Atlas et al., 1994;Lee, 2000;Hoover y Pecorino, 2005;Rodden, 2002). A pesar de ser estadísticamente significativo, el coeficiente es siempre más pequeño que los de las variables en los modelos principales de este trabajo 23 . ...
... Fixed effects focus only on the variation within entities of interest across time, thus controlling for much of time-invariant between-entity effects that could be even more important in uncovering the source of variation. Moreover, in many cases researchers using fixed effects are unaware of the necessity for caution in their interpretations and tend to generalize their results to the differences between entities (e.g., Atlas et al. 1995;Levitt and Snyder 1995;Hoover and Pecorino 2005;Matthews et al. 2011). For example, finding that larger vote shares for the government within counties result in more allocated grants over time-clearly a within effect-often is misinterpreted as the between effect and generalized into a cross-sectional conclusion that counties received more grants because the government garnered a larger share of the votes in a previous election. ...
... Thus far, the balance of evidence between these two hypotheses has largely been evenly split. Swing districts have been found to attract more funds by Dixit and Londregan (1998) and Hoover and Pecorino (2005) in the United States; Dahlberg and Johansson (2002) in Sweden; Cadot et al. (2006) in France; Veiga and Pinho (2007) in Portugal;and Arulampalam et al. (2009) in India. On the other hand, the core district hypothesis was confirmed by Larcinese et al. (2006) and Larcinese et al. (2010) for the United States; Dellmuth and Stoffel (2012) for Germany; and Sollé-Ollé and Sorribas-Navarro (2008b) for Spain. ...
Instead of alleviating fiscal inequalities, intergovernmental grants are often used to fulfill the grantors’ political goals. This study uses a unique panel dataset on more than 500 Croatian municipalities over a 12-year period to uncover the extent to which grant distribution is biased owing to grantors’ electoral concerns. Instead of the default fixed effects approach to modelling panel data, we apply a novel within-between specification aimed at uncovering the contextual source of variation, focusing on the effects of electoral concerns on grant allocation within and between municipalities. We find evidence of a substantial political bias in grant allocations both within and between municipalities, particularly when it comes to local-level electoral concerns. The paper offers researchers a new perspective when tackling the issue of politically biased grant allocation using panel data, particularly when they wish to uncover the simultaneous impact of time-variant and time-invariant factors, or when they cannot apply a quasi-experimental approach because of specific institutional contexts.
... Bennett y Mayberry (1979) y Holcombe y Zardkoohi (1981) desarrollaron los primeros estudios alegando que los estados legislativamente sobrerrepresentados tienden a recibir más fondos federales per cápita. El argumento, sostenido también por otros trabajos posteriores (ver Atlas et al., 1995;Lee, 1998;Hoover y Pecorino, 2005), es que los beneficios políticos de un aumento de un peso marginal en los fondos a un Estado pequeño y sobrerrepresentado son mayores que los del aumento de un peso marginal en un Estado grande y poblado, en el que el impacto per cápita es menor. Varios estudios de la literatura comparada abordaron el rol de esta variable (ver Gibson et al., 2004;Gibson y Calvo, 2000;Gordin, 2006;Lodola, 2005;Rodden, 2010;Samuels y Snyder, 2001). ...
... El coeficiente de la sobrerrepresentación es estadísticamente significativo en la mayoría de los modelos. Estos resultados son consistentes con lo que varios autores reportaron en sus estudios sobre los Estados Unidos y la Unión Europea (ver Atlas et al., 1994;Lee, 2000;Hoover y Pecorino, 2005;Rodden, 2002). A pesar de ser estadísticamente significativo, el coeficiente es siempre más pequeño que los de las variables en los modelos principales de este trabajo 23 . ...
Este artículo estudia cuáles son los principales factores que influyen en la asignación de fondos federales a las provincias en Argentina entre 1999 y 2009. La contribución principal es que incorpora el ciclo electoral junto con la popularidad presidencial en el análisis. El argumento principal es que en los años electorales, los presidentes tienden a distribuir más fondos a las provincias más grandes y más pobladas (llamo a esto distribución electoral). En ellas está la mayor cantidad de votantes. Pero en años no electorales, los presidentes distribuyen a las provincias del interior, menos pobladas, menos ricas, pero más sobrerrepresentadas. Esto es clave para asegurar apoyo legislativo y gobernabilidad (llamo a esto distribución de gobierno). Los clivajes estructurales entre provincias ricas y pobres también se articulan con la popularidad presidencial para influir la distribución de fondos federales. Los presidentes electoralmente fuertes y con apoyo en la opinión pública tienden a aumentar las transferencias a los distritos más pobres y a reducir fondos a los distritos más ricos. Invertir en las provincias más pobres es más eficiente, los gobernadores de estos distritos tienden a apoyar a los presidentes redistributivos y además son rivales políticos más débiles que los gobernadores de los distritos más grandes y ricos. Por el contrario, los presidentes más débiles y con menos apoyo en la opinión pública tienen menos capacidad de resistir las presiones de los gobernadores de los distritos más grandes y ricos. El artículo discute estos resultados, los compara con los de argumentos competitivos (vinculados al rol de las alianzas partidarias, del congreso y de factores programáticos) y explora las implicancias para el debate comparativo.
... Nevertheless, the disagreement relies on the implemented strategy. A first set of authors have argued that in districted electoral systems, intergovernmental grants will be allocated in those regions in which there are more seats apportioned (Gibson et al., 1999; Porto and Sanguinetti, 2001; Samuels and Snyder, 2001; Rodden, 2002; Hoover and Pecorino, 2005; Pitlik at al., 2006). Other authors have posited that intergovernmental grants will be allocated exclusively depending on the presence of the same party in charge of the subnational unit (Khemani, 2003Khemani, , 2007). ...
... of Deputies. Similar studies have addressed this hypothesis considering the potential impact of the partisanship variable (Gibson et al., 1999) but it did not introduce changes concerning the main argument: the assemblies' apportionment determines the strategic use of investment and transfers. Evidence has supported this argument in other contexts. Hoover and Pecorino (2005) analyzed the impact of disproportional representation in federal expenditures in the The first model is based on the theoretical background presented by Cox and McCubbins (1986). They divide voters into three different groups: support voters, opposition voters and swing voters. According to their conception, electoral politics is viewed ...
This paper studies the effect of political variables on the gains obtained by Spanish
regions in periodical bargaining of the intergovernmental financing agreements and on
the regional distribution of discretional earmarked grants over the period 1987-2008.
First, we find that the relationship between gains in transferred revenues and on
regional public debt stocks depends on the period and the specific issues discussed in
the corresponding negotiation, aside from political affinity. Second, we show that the
most discretional program of earmarked grants is strongly driven by electoral strategy.
National incumbents tend to allocate intergovernmental transfers where there are
competitive regional elections. Moreover, we show that earmarked grants are allocated
in those regions where the incumbent performs better in national elections and,
especially, in those where there are more seats to be won. Hence we prove that both
strategies are complementary rather than exclusive.
... There is also a literature comprised of mostly empirical studies examining how political representation translates to government expenditures. These studies include Atlas et al. (1995), Hoover and Pecorino (2005), Tollison (1977, 1981), Goss (1972), Greene and Munley (1980), Kiel and McKenzie (1983), Ray (1980Ray ( , 1981, Ritt (1976), Rundquist (1978), and Rundquist and Griffiths (1976). Atlas et al. (1995) and Hoover and Pecorino (2005) document a positive relationship between per capita 6 See, for example, Rotemberg and Woodford (1992), Blanchard and Perotti (2002), Fatás and Mihov (2001), Mountford and Uhlig (2002), Perotti (2005), Pappa (2005), Caldara and Kamps (2006), and Galí, López-Salido, and Vallés (2007), Ramey (2008). ...
... These studies include Atlas et al. (1995), Hoover and Pecorino (2005), Tollison (1977, 1981), Goss (1972), Greene and Munley (1980), Kiel and McKenzie (1983), Ray (1980Ray ( , 1981, Ritt (1976), Rundquist (1978), and Rundquist and Griffiths (1976). Atlas et al. (1995) and Hoover and Pecorino (2005) document a positive relationship between per capita 6 See, for example, Rotemberg and Woodford (1992), Blanchard and Perotti (2002), Fatás and Mihov (2001), Mountford and Uhlig (2002), Perotti (2005), Pappa (2005), Caldara and Kamps (2006), and Galí, López-Salido, and Vallés (2007), Ramey (2008). 7 See Giavazzi and Pagano (1990). ...
This paper employs a new empirical approach for identifying the impact of government spending on the private sector. Our key innovation is to use changes in congressional committee chairmanship as a source of exogenous variation in state-level federal expenditures. In doing so, we show that fiscal spending shocks appear to significantly dampen corporate sector investment and employment activity. These corporate reactions follow both Senate and House committee chair changes, are present among large and small firms and within large and small states, are partially reversed when the congressman resigns, and are most pronounced among geographically-concentrated firms. The effects are economically meaningful and the mechanism - entirely distinct from the more traditional interest rate and tax channels - suggests new considerations in assessing the impact of government spending on private sector economic activity.
... We also contribute to the economics literature on fiscal federalism and fiscal decentralization and a related literature on the role of party affiliation and regional favoritism in the distribution of fiscal resources (Oates, 1999(Oates, , 1993Musgrave, 1997;Poterba, 1994;Buchanan, 1950;Hoover and Pecorino, 2005;Zhuravskaya, 2000;Boadway and Shah, 2007;Hodler and Raschky, 2014;Gerber, Huber, and Washington, 2010). While this work has mostly focused on explaining the incentive structure of revenue sharing schemes under democratic regimes separately from authoritarian contexts, we show that the incentive constraints of government entities in revenue sharing environments can remain stable under both democratic and nonelectoral regimes. ...
Can citizen-led protests lead to meaningful economic redistribution and nudge governments to increase redistributive efforts of fiscal resources? We study the effects of protests on fiscal redistribution using evidence from Nigeria. We digitized twenty-six years of public finance data from 1988 to 2016 to examine the effects of protests on intergovernmental transfers. We find that protests increase transfers to protesting regions, but only in areas that are politically aligned with disbursing governments. Protesters also face increased police violence. Non-protest conflicts do not affect transfers and protests do not affect non-transfer revenue. The results show that protests can influence fiscal redistribution. JEL classification: D7, H2, H7, O10, O43, N37
... We also contribute to the economics literature on fiscal federalism and fiscal decentralization and a related literature on the role of party affiliation and regional favoritism in the distribution of fiscal resources (Oates, 1999(Oates, , 1993Musgrave, 1997;Poterba, 1994;Buchanan, 1950;Hoover and Pecorino, 2005;Zhuravskaya, 2000;Boadway and Shah, 2007;Hodler and Raschky, 2014;Gerber, Huber, and Washington, 2010). While this work has mostly focused on explaining the incentive structure of revenue sharing schemes under democratic regimes separately from authoritarian contexts, we show that the incentive constraints of government entities in revenue sharing environments can remain stable under both democratic and nonelectoral regimes. ...
... For the Israeli case, Rozevitch 4 An interesting strand of the literature discusses the effect of under-/overrepresentation of subnational governments at the federal legislative houses, i.e., when the number of representatives of each subnational government at the federal legislative houses is not proportional to their respective population. Hoover and Pecorino (2005), for instance, find that US states with higher representation in the senate benefit from higher federal expenditure. For Argentine states, in contrast, Galiani et al. (2016) find no relationship between legislative representation and receipt of federal funding. ...
Based on a panel of more than 3300 Brazilian municipalities between 1999 and 2012, this article aims to investigate the influence of the political alignment of municipal governments with the federal government and their respective state governments on the amount of transfers received. In particular, this article utilizes a method that simultaneously explores all sources of variations, namely between municipalities, between years, and between levels of government, entitled triple differences. Although the results suggest that political alignment exerts little influence over the discretionary portion of current transfers, capital transfers appear to be a very important mechanism by which the federal government and state governments support politically strategic local governments. These results are robust to estimations comprising alternative measures of political alignment, a sample comprising a subset of municipalities with no party switching of mayors, estimations controlling for the electoral calendar, and estimations controlling for state-specific trends.
... Most of these data are measured over states and years, though some variables, particularly those measuring institutions, tend to be static in many states. Using data from Hoover and Pecorino (2005), updated using the Book of States, we identify observations with Unified Democratic Control of the legislature and executive (25% of cases), and those under Unified Republican Control (18%). We measure the stringency of balanced budget requirements across states and years using the American Council on Intergovernmental Relations' (ACIR) timeinvariant 0-10 scale. ...
Because the American states operate under balanced budget requirements, increases in spending in one area typically entail equal and opposite budget cuts in other programs. The literature analysing the correlates of government spending by policy area has mostly ignored these trade-offs inherent to policymaking, failing to address one of the most politically interesting and important dimensions of fiscal policy. Borrowing from the statistical literature on compositional data, we present more appropriate and efficient methods that explicitly incorporate the budget constraint into models of spending by budget category. We apply these methods to eight categories of spending from the American states over the years 1984–2009 to reveal winners and losers in the scramble for government spending. Our findings show that partisan governments finance their distinct priorities by raiding spending items that the opposition prefers, while different political institutions, economic conditions and state demographics impose different trade-offs across the budget.
... That literature is rooted in early empirical work on the New Deal (Wright 1974), in which federal spending is shown to respond to the varying ''political productivity'' of states. Such considerations are confirmed, among many others, by Larcinese, Rizzo, and Testa (2006) with a focus on the role of presidential politics in the allocation of federal outlays by state over the 1982-2000 period and by Hoover and Pecorino (2005) which deal with representation in the Senate and the House. In the Canadian context, Milligan and Smart (2005) have empirically identified the electoral determinants of the allocation across electoral districts of federal grants for regional development (e.g., infrastructure). ...
This article adopts the perspective of second-generation fiscal-federalism theory to provide an empirical assessment of Canada’s intergovernmental fiscal arrangements. In the context of the literature on the political economy of intergovernmental grant programs, it examines the influence of political considerations on the evolution of the Canadian fiscal arrangements under the Constitution Act of 1982. Fixed-effect regression results exploiting data from the 1982 to 2012 period show a statistically significant relationship between changes in both federal and provincial electoral variables and changes in a province’s total federal transfer revenues. Changes to social transfers appear to be more reactive to changes in the political environment than do changes in equalization transfers.
... For example, Rupasingha et al. (2006) used county-level data on the number of membership organizations of different types, the percentage of voters who voted in presidential elections, the county-level response rate to the decennial population census, and the number of tax-exempt nonprofi t organizations to construct an index of social capital. Many studies on the political determinants of Federal spending and economic performance have constructed indicators of political capital at the State or Congressional district level-such as the share of voters who participated in past elections, the seniority and leadership positions held by Members of Congress, whether Members of Congress are part of the majority party, and the percent of the vote carried by Members of Congress in past elections (e.g., Levitt and Poterba, 1999;Besley and Case, 2003;Lee, 2003;Hoover and Pecorino, 2005;Knight, 2005;Rupasingha and Goetz, 2007). ...
This report presents a conceptual framework for rural wealth creation, drawing upon the U.S. and international development literature. The framework emphasizes the importance of multiple types of assets (physical, financial, human, intellectual, natural, social, political, and cultural capital) and the economic, institutional, and policy context in which rural wealth strategies are devised. The report discusses the role of wealth creation in the rural development process, how wealth can be created in rural communities, and how its accumulation and effects can be measured.
... Thus far the balance of evidence between these two hypotheses has been pretty evenly split. Swing districts have been found to attract more funds by Dixit and Londregan (1998) and Hoover and Pecorino (2005) in the US; Dahlberg and Johansson (2002) in Sweden; Cadot, Roller, and Stephan (2006) in France; Gonçalves Veiga and Pinho (2007) in Portugal;and Arulampalan et al. (2009) in India. On the other hand, the core district hypothesis was confirmed by Larcinese, Rizzo, and Testa (2006) and Larcinese, Snyder, and Testa (2010) for the US; Dellmuth and Stoffel (2012) for Germany; and Sollé-Ollé and Sorribas-Navarro (2008b) for Spain. ...
... In this literature, one approach examines federal spending at the aggregate level. Often annual fund allocations to states or congressional districts serves as the unit of analysis (Berry Burden and Howell 2011;Hoover and Pecorino 2005;Larcinese, Rizzo, and Testa 2005;Shor 2006). Another approach offers a detailed examination of the allocation processes of one or a few federal agencies and draws conclusions about broad government outlays accordingly (Bertelli and Grose 2009;Chen 2009;Gasper and Reeves 2011). ...
... For example, Rupasingha et al. (2006) used county-level data on the number of membership organizations of different types, the percentage of voters who voted in presidential elections, the county-level response rate to the decennial population census, and the number of tax-exempt nonprofi t organizations to construct an index of social capital. Many studies on the political determinants of Federal spending and economic performance have constructed indicators of political capital at the State or Congressional district level-such as the share of voters who participated in past elections, the seniority and leadership positions held by Members of Congress, whether Members of Congress are part of the majority party, and the percent of the vote carried by Members of Congress in past elections (e.g., Levitt and Poterba, 1999;Besley and Case, 2003;Lee, 2003;Hoover and Pecorino, 2005;Knight, 2005;Rupasingha and Goetz, 2007). ...
This report presents a conceptual framework for rural wealth creation, drawing upon the U.S. and international development literature. The framework emphasizes the importance of multiple types of assets (physical, fi nancial, human, intellectual, natural, social, political, and cultural capital) and the economic, institutional, and policy context in which rural wealth strategies are devised. The report discusses the role of wealth creation in the rural development process, how wealth can be created in rural communities, and how its accumulation and effects can be measured.
... As it is generally difficult to deliver direct monetary payback, politicians divert specific investments or procurement contracts to their states (Aghion et al., 2009;Atlas et al., 1995;Cohen and Noll, 1991;Levitt and Snyder, 1997;Mayer, 1995). For instance, there is anecdotal evidence of intervention by members of the House of Representatives to prevent the Department of Defense or the Pentagon from taking away military procurement projects from their constituency (Hoover and Pecorino, 2005). Newspaper accounts also sometimes refer to government procurement as pork barrel spending (e.g., Wheeler, 2004). ...
This paper addresses the question of whether government procurement can work as a de facto innovation policy tool. We develop an endogenous growth model with quality-improving innovation that incorporates industries with heterogeneous innovation sizes. Government demand in high-tech industries increases the market size in these industries and, with it, the incentives for private firms to invest in R&D. At the economy-wide level, the additional R&D induced in high-tech industries outweighs the R&D foregone in all remaining industries. The implications of the model are empirically tested using a unique data set that includes federal procurement in U.S. states. We find evidence that a shift in the composition of government purchases toward high-tech industries indeed stimulates privately funded company R&D.
... Using a sample of S&P 500 firms, Goldman, Rocholl and So (2009) find that the announcement of the nomination of a politically connected board member is associated with a positive cumulative abnormal stock return. Their findings tie in with some other studies in the literature that find that political connections influence government investment or policy decisions, and that while these decisions may benefit individual firms or sectors, they are not always socially desirable (see for example, Atlas, Gilligan, Hendershott and Zupan, 1995; Drop and Hansen, 2004; Hoover and Pecorino, 2005). ...
This paper analyzes whether the political connections of listed firms in the United States affect the cost and terms of loan contracts. Using a hand-collected data set of the political connections of S&P 500 companies over the 2003-2008 time period, we find that the cost of bank loans is significantly lower for companies that have board members with political ties. This negative link between political connections and the costs of bank loans is more profound for firms with more government procurement dependence, less relationship lending, lower credit ratings, for firms facing stronger foreign competition and for firms during the recent financial crisis period. Moreover, focusing on the sample period from 2005 to 2007 and the firms that borrowed from banks both before and after the Democratic victories in the mid-term election of 2006, we find that firms connected to the Democratic Party experience a decrease in cost of borrowing after the election while firms connected to the Republican Party experience an increase in the loan spread after the election. We also find that political connection reduces the likelihood of a capital expenditure restriction or liquidity requirement commanded by banks at the origination of the loan. Taken together, our results suggest that political connections increase the value of U.S. companies and reduce monitoring costs and credit risks faced by banks and, in turn, reduce the borrower’s cost of debt.
... for instance, Hoover and Pecorino (2005) suggest that states with higher per-capita Senate representation have higher federal spending per capita. ...
We simultaneously identify two government spending shocks: military spending shocks as defined by Ramey (2008) and federal spending shocks as defined by Perotti (2008). We analyze the effect of these shocks on state-level personal income and employment. We find regional patterns in the manner in which both shocks affect state-level variables. Moreover, we find differences in the propagation mechanisms for military versus nonmilitary spending shocks. The former benefits economies with larger manufacturing and retail sectors and states that receive military contracts. While non-military shocks also benefit states with the proper industrial mix, they appear to stimulate economic activity in lower-income states.
... Representatives to prevent the Department of Defense or the Pentagon from taking away military procurement projects from their constituency (Hoover and Pecorino, 2005). Newspaper accounts also sometimes refer to government procurement as pork barrel spending (e.g., Wheeler, 2004). ...
This volume was prepared by Simon Wiederhold during his stay at the Friedrich
Schiller University of Jena and at the Duke University in Durham, U.S. It was accepted
as a doctoral thesis by the School of Economics and Business Administration at the
University of Jena in August 2011. The thesis consists of four core chapters, which cover theoretical, empirical, and
experimental work. All studies deal with the innovation effects of public procurement,
that is, the purchase by governments of goods and services. The idea that public
procurement can stimulate innovation originates from the seminal work of Joseph
Schumpeter and Jacob Schmookler, which suggests that innovation is sensible to
general demand conditions. However, previous research on the role of government
demand in innovation has mainly focused on highly situational case studies and
anecdotal evidence; econometric studies are almost entirely absent from the literature.
There is also a lack of theoretical work on the innovation effects of public procurement
to guide the empirical analysis. This thesis picks up on these shortcomings.
... For this purpose, an instrumental variable is selected that is uncorrelated with inequality but correlated with TANF. Hoover and Pecorino (2005) show that the absolute value of the margin of the last presidential vote is significantly related to federal government spending at the state level. What they find in particular is that this variable is correlated with spending in the "other" category of federal spending at the state level, which is the category, which programs like TANF are funded through. ...
In this study, the authors investigate the income inequality responses of Blacks, Whites, and Hispanics in the United States to the income maintenance program Temporary Assistance for Needy Families (TANF) using cross sections of state-level data. The results show that this program indeed reduces income inequality but the impacts are not uniform across racial/ethnic groups. Specifically, the authors find that Blacks have results that differ from those of the other two groups or those of the United States as a whole. These results are robust when using either the Gini or Theil measure of inequality.
... Less 4 Atlas et al. (1995) finds that overrepresentation of less populous states in the U.S. Senate led to a significantly higher amount of net federal spending per capita in these states. More recent work is consistent with this finding (see, for example, Lee 1998;Hoover and Pecorino 2005;Knight 2005;Hauk and Wacziarg 2007). While U.S. Senators vote directly on projects, and thereby determine the regional distribution of federal funds, in Germany the distribution of transfers is mostly based on formula. ...
This paper analyses, in a simple two-region model, the undertaking of noxious facilities when the central government has limited prerogatives. The central government decides whether to construct a noxious facility in one of the regions, and how to …nance it. We study this problem under both full and asymmetric information on the damage caused by the noxious facility in the host region. We particularly emphasize the role of the central government prerogatives on the optimal allocations. We …nally discuss our results with respect to the previous literature on NIMBY and argue that taking into account these limited prerogatives is indeed important.
... Since Wright's (1974) initial study of the New Deal, a large empirical literature has attempted to ascertain the relationship between over-representation and public expenditures in a wide range of contexts. Atlas et al. (1995) and Hoover and Pecorino (2005) establish a positive relationship between changes in states' net receipts from federal expenditures and changes in representation per capita in the U.S. Senate. However, Larcinese et al. (2007) and Elis et al. (2009) point out that it is very difficult to disentangle the effect of population movements from the effect of representation changes in this type of observational study. ...
This paper examines the role of institutions of territorial representation in shaping long-term patterns of inter-regional redistribution within federations. A simple legislative bargaining model with endogenous taxation suggests that over-represented states should be favored in the distribution of inter-governmental grants regardless of their income level. We demonstrate that a striking relationship between legislative representation and grants holds up in a diverse group of federations from around the world. The relationship appears not to be an artifact of economic development, population size, population density, or the historical conditions under which the federal bargain was struck. Furthermore, we suggest that the attractiveness of poor states as coalition partners implies that intergovernmental transfer systems will often tend toward progressivity under equal apportionment, but the systematic over-representation of wealthy (or poor) states can undermine (or bolster) this logic.
Sosyo-ekonomik kalkınmaya doğrudan etki edebilecek kamu yatırımlarını belirleyen temel dinamiklerin ve motivasyon kaynağının tespiti, ulusal ve yerel kalkınma stratejilerinin başarısı için kilit bir role sahiptir. Nitekim kamu yatırımlarını belirleyen faktörlerin anlaşılması, kamu yatırımlarına ayrılması gereken fon miktarının ve öncelenmesi gereken yatırımların tespitinde büyük bir önem arz etmektedir. Bu çerçevede, mevcut çalışmanın amacı, Türkiye örneğinde bölgesel kamu yatırımlarını belirleyen ekonomik, politik, kültürel ve demografik faktörleri, 2004 – 2018 dönemi verilerini kullanarak tespit etmektir. Panel veri analizinden elde edilen bulgular, kişi başına gelirin kamu yatırımları üzerindeki etkisinin pozitif; ancak istatistiksel olarak anlamsız olduğunu göstermektedir. Regresyon sonuçları, istatistiksel etki minimal düzeyde olmak üzere, nüfus yoğunluğunun düşük ve tarımsal üretimin ağırlıkta olduğu illerin kamu yatırımlarını çekmede nispeten daha avantajlı olduğunu göstermektedir. Diğer taraftan, yabancı ziyaretçi sayısının yüksekliği de kamu yatırımlarının artışına etki eden faktörlerden birisi olarak tespit edilmiştir. Ampirik sonuçlar, ayrıca, yüksek temsil oranı ve iktidar partisi milletvekili sayısının kamu yatırımlarını artırdığını göstermekte olup belediye başkanının iktidar partisinden olması ve iktidar partisi oy oranının kamu yatırımları üzerindeki etkisi ise istatistiksel olarak anlamsızdır.
Political scientists are increasingly interested in the geographic distribution of political and economic phenomena. Unlike distribution measures at the individual level, geographic distributions depend on the “unit question” in which researchers choose the appropriate political subdivision to analyze, such as nations, subnational regions, urban and rural areas, or electoral districts. We identify concerns with measuring geographic distribution and comparing distributions within and across political units. In particular, we highlight the potential for threats to inference based on the modifiable areal unit problem (MAUP), whereby measuring concepts at different unit aggregations alters the observed value. We offer tangible options for researchers to improve their research design and data analysis to limit the MAUP. To help manage the measurement error when the unit of observation is unclear or appropriate data are not available, we introduce a new measure of geographic distribution that accounts for fluctuations in the scale and number of political units considered. We demonstrate using Monte Carlo simulations that our measure is more reliable and stable across political units than commonly used indicators because it reduces measurement fluctuations associated with the MAUP.
Osvaldo Meloni (compilador)
1.Introducción
Osvaldo Meloni
2. Instituciones y Política Fiscal
Osvaldo Meloni y Mariano Tommasi
3. Ciclos electorales en política fiscal
Daniel Lema y Jorge Streb
4. Federalismo Fiscal y Economía Política de la Descentralización
Cecilia Rumi
5. Economía Política de las Transferencias. Un análisis para Argentina con datos de panel
Ernesto Rezk, Ginette Lafit y Vanina Ricca
6. El Rol del Congreso en la Política Fiscal: Política Distributiva
José Bercoff y Jorge Nougués
Despite fast-growing interest in research on political connections, most papers on this topic belong to the economics or public administration fields. Few studies, if any, look into the role of firms' political connections in the Department of Defense (DoD) acquisition area. This paper attempts to bridge this gap by investigating the impact of political connections on the excessive profitability of DoD contractors. We find that, in contrast to what the "corruption hypothesis" predicts, the excessive profits are less (more) pronounced for those contractors with politically connected (non-connected) boards. Our findings suggest that those politically connected board directors may use their experience to serve a benevolent role to the public in keeping DoD contractors from opportunistic profitseeking behaviors that could reach or even cross the federal government's regulatory redline.
This article uses panel data from national and state elections in India during the period 1977-2007 to examine the effect of inequality in constituency population size on voter turnout. During this period, constituency boundaries in India remained fixed. As a result, differences in population size between constituencies increased, thus changing the value of a single vote. Using this large variation in population size and informative data, this article carefully distinguishes the effect of population size from other factors. We find that an increase of one million electorates decreases voter turnout by 12-27%. In addition, we find that the share of votes gained by national political parties is greater in small-population constituencies. This suggests that political parties direct their efforts in electoral campaigns preferentially to less populous constituencies; as a result, voters in small constituencies are more likely to participate in elections.
This article examines the relationship between economic inequality, electoral turnout and redistributive spending. I use the Current Population Survey to create direct measures of the income of the median voter to investigate its effect on spending and its relationship with inequality and turnout. In the 50 US states from 1978 to 2002, I find little effect of these direct measures on redistributive outcomes; nor do the individual characteristics of the median voter appear to mediate the effects of turnout and inequality measured at the state level. Thus I find no support for the contention that turnout affects government spending via increasing the political representation of the poor. In contrast to cross-national findings, across US states the income of the median voter is not strongly affected by turnout, but rather by other state characteristics.
We analyse how bicameralism can affect national fiscal policies in a federal country when vertical and horizontal externalities interact. Conditions are provided to show when, at equilibrium, the two chambers agree or disagree on the choice of a national capital tax rate, depending on whether or not the pivotal voter in the two chambers is the same.
According to a recent plurality of the U.S. Supreme Court, the danger that federal taxes will “crowd out” state revenues justifies aggressive judicial limits on the conditions attached to federal spending. Economic theory offers a number of reasons to believe the opposite: federal revenue increases may also float state boats. To test these competing claims, I examine for the first time the relationship between total federal revenues and state revenues. I find that, contra the NFIB plurality, increases in federal revenue -- controlling, of course, for economic performance and other factors -- are associated with a large and statistically significant increase in state revenues. This version of the study additionally provides extensive background explanations of underlying economic concepts for readers unfamiliar with the prior public finance literature.
Distributive political theory is applied to whether politics versus risk determines government spending across four grant
programs purposed for homeland security. A model of security funding is tested with data from U.S. states from 2004 to 2006.
Findings support politics over risk when programs are designed to award universal benefits to elected officials, such as with
fair-sharing policies. However, risk explains funding when programs award narrow, particularistic benefits, such as with urban
security initiatives. A key conclusion is that fair-share strategies in grant politics can actually produce unfair allocation outcomes in the area of security. Also, protecting status quo formulas is in the interest of political actors,
especially if they might otherwise lose opportunities to secure resources for constituents (state and local governments) in
a distressed economy.
Public spending, because it is influenced by elected officials, can be swayed by political considerations as well as socio‐economic factors. Previous studies have confirmed the importance of political measures in the allocation of general public spending as well as in spending for infrastructure and highway projects at the state level. This study examines the determinants of the allocation of state highway funds within one state—in North Carolina to counties during the period 1990–2005—and assesses the relative importance of socio‐economic and political factors in these decisions. Determinants were derived from three conceptual approaches to public spending: the median voter model, the special interest model, and the political model. Persistence was found in both highway construction spending and highway maintenance spending. In addition, employment market conditions were a strong determinant of highway construction spending, as was one political factor—the county's relative vote in the most recent election for the state's dominant political party. Highway maintenance spending was found to be dominated by median voter factors with no finding of political influence.
State budgets are flexible: In the same year, some budget categories dramatically rise or fall, whereas others closely follow the previous year’s appropriation. Public policy scholars label a budget that contains mainly small scale changes interspersed with dramatic fluctuations as punctuated. This research seeks to identify the determinants of these punctuated budgets in the American states. What causes both incremental and large scale budgetary change? We argue that a governor’s agenda setting and veto powers increase the extent to which state budgets are punctuated. First, institutionally strong governors can dominate budgetary agendas but are subject to heightened information costs. Second, strong governors can also block legislative alternatives, but thereby induce transactions costs that hinder fiscal policy adjustments. The article analyzes these institutional constraints at the American state level using maximum likelihood estimation on panel data from 1983 to 1999. We make two contributions to the study of American public policy. First, we offer a broad empirical analysis of the causes of punctuated change. Second, we present a method by which to measure punctuated distributions over time. This method can be applied to other areas of public policy research.
Governments purchase everything from airplanes to zucchini. This paper investigates whether the technological intensity of government demand affects corporate R&D activities. In a quality-ladder model of endogenous growth, we show that an increase in the share of government purchases in high-tech industries increases the rewards for innovation, and stimulates private-sector R&D at the aggregate level. We test this prediction using administrative data on federal procurement performed in US states. Both panel fixed effects and instrumental variable estimations provide results in line with the model. Our findings bring public procurement within the realm of the innovation policy debate.
The distribution of State Homeland Security Grants has been characterized as pork barrel spending, where political considerations and not terrorism risk are determining the allocation each state receives. Using revealed preference analysis, we test this claim. From 2004 to 2006, measures of terrorism risk are found to be positive determinants of funding while measures of political influence and party affiliation of elected officials show no positive relationship with grant funding. These results are not compatible with the assertion that funding is distributed due to political factors.
This study identifies the political and economic variables that explain differences among US states in per capita funding resulting from the American Recovery and Reinvestment Act (ARRA) of 2009. We find a marginal statistically significant negative relationship between states that have been traditionally Democratic (Blue states) versus those that have traditionally been Republican (Red states). Additionally, we find a highly statistically significant negative relationship between states that were traditionally Republican but voted for President Obama in the 2008 election (Blue states) and traditionally Red states. Furthermore, our findings suggest that there is a statistically significant positive relationship between union representation for a state and per capita funding and between per capita electoral votes and per capita funding. With regard to economic variables, we find that a state's unemployment rate has a positive and statistically significant influence with regard to funding, but a state's poverty rate has no statistically significant impact on funding.
Many of the world's most populous democracies are political unions composed of states or provinces that are unequally represented in the national legislature. Scattered empirical studies, most of them focusing on the United States, have discovered that overrepresented states appear to receive larger shares of the national budget. Although this relationship is typically attributed to bargaining advantages associated with greater legislative representation, an important threat to empirical identification stems from the fact that the representation scheme was chosen by the provinces. Thus, it is possible that representation and fiscal transfers are both determined by other characteristics of the provinces in a specific country. To obtain an improved estimate of the relationship between representation and redistribution, we collect and analyze provincial-level data from nine federations over several decades, taking advantage of the historical process through which federations formed and expanded. Controlling for a variety of country- and province-level factors and using a variety of estimation techniques, we show that overrepresented provinces in political unions around the world are rather dramatically favored in the distribution of resources.
In this paper we provide new evidence on the importance of the so-called small state advantage for the allocation of the US federal budget. We also provide a new interpretation of the available empirical evidence. Analyzing outlays for the period 1978-2002, we show that not only does the population size of a state matter, but so too does its dynamics. Once population scale and change effects are separated, the impact of population size is substantially reduced, and population change turns out to be an important explanatory variable of current spending patterns. The impact of scale and change effects varies substantially across spending programs. Small states enjoy an advantage in defense spending, whereas fast growing ones are penalized in grants allocations. Our results imply that the interests of the states are not easily aligned around their population size alone. The distortion associated with population dynamics is concentrated on federal grants where formulas play a substantial role in limiting budgetary adjustments. Hence, a large part of the inverse relationship between spending and population appears to be driven by mechanisms of budgetary inertia which are compatible with incrementalist theories of budget allocation.
Tuition fees increased rapidly in the 1990s in most Canadian provinces raising concerns about access to post-secondary education. This paper examines the role of tuition fees in explaining participation in college and university programs from 1997 to 1999 in all provinces except Quebec and Ontario. Differentiated responses to tuition fees by family income and grades are explored. Information on participation patterns of high school graduates is derived from the new Youth in Transition Survey. Other datasets provide approximate measures of tuition and of respondents’ family earnings. The analysis suggests that PSE choices were not particularly sensitive to either tuition fees at their current levels or to family earnings at the time of enrolment. By contrast, academic preparation and parental education were critical in determining whether students enrolled in PSE and which type of program they chose. These conclusions hold for the whole sample as well as for students from low-income families or with average grades. Three interpretations are possible for the lack of influence of tuition fees: 1) government student loans were able to meet the growing financial needs of most students; 2) the wage premium associated with PSE may have increased sufficiently in the late 1990s to offset the higher tuition fees; and 3) academic rather than financial barriers at the time of enrolment are perhaps what most prevent low-income students from attending PSE programs (e.g. no high school diploma), particularly at the university level.
Les frais de scolarité au collège et à l’université ont augmenté substantiellement au cours des années 90 dans la plupart des provinces canadiennes. L’augmentation des frais de scolarité remet en question l’accessibilité aux EPS en général et à l’université en particulier. Cette étude examine le rôle des frais de scolarité dans les décisions de participation au collège et à l’université entre 1997 et 1999 dans toutes
The Senate's equal representation of states shapes coalition building in distributive politics. The great variation in state population means that some states have far greater need for federal funds than others, but all senators have equal voting weight. As a result, even though all senators' votes are of equal value to the coalition builder, they are not of equal "price." Coalition builders can include benefits for small states at considerably, less expense to program budgets than comparable benefits for more populous states. Building on formal models of coalition building, two hypotheses are developed and rested. First, coalition builders will seek out less costly members to build supportive coalitions efficiently. Second the final outcomes of distributive policy will more closely reflect the preferences of small-state senators than large-state senators. The hypotheses are tested by examining the 1991 and 1997-98 reauthorizations of federal surface transportation programs. The findings support both hypotheses.
Theory: Several models of distributive politics predict a role for parties in determining the allocation of federal outlays. Hypotheses: The number of Democratic voters will be positively correlated with federal outlays, even after controlling for demographic and socioeconomic variables. The degree to which a program will be skewed to Democrats will be a function of the amount of variation in program benefits across districts, whether the program is administered by formula, and the extent of one-party control when the program is initiated. Methods: Regression analysis of district-level data on election outcomes and federal assistance programs for the period 1984-90. Results: The number of Democratic voters is an important predictor of the amount of federal dollars flowing to a district. Programs with a greater amount of variation across districts are more heavily skewed to Democrats, as are programs administered by formula. Programs initiated in the latter half of the 1970s, a time of solid Democratic control, exhibit the greatest bias towards Democrats; programs started in the Reagan era show no such bias. Our results are consistent with a model in which parties in the United States play an important, but limited role in determining the distribution of federal dollars: given enough time, parties can target types of voters, but they cannot easily target specific districts.
Political scientists have long believed that the formal arrangements of representative institutions make a difference for public policy; in spite of this, they have largely neglected to investigate the policy effects of Senate apportionment. This paper tests the hypothesis that coalition building in the Senate will produce distributions of federal funds to states reflecting the enhanced representation of small states in the Senate. Using Bickers and Stein's U.S. Domestic Assistance Programs Database, I find that, first, federal distributive programs are typically constructed so that a majority, frequently an overwhelming majority, of states benefit. Second, using a pooled cross-sectional time-series design (N = 350), I examine the distributions of federal funds to states in different types of domestic assistance programs to determine if they bear the imprint of Senate apportionment. I find that overrepresented states tend to receive higher allocations of federal funds per capita, most notably in programs characterized as nondiscretionary distributive.
This paper has shown that the observed distribution pattern of federal grants and taxes among states is dependent on more than a simple redistributional motive. As previous studies have shown, the distribution of taxes and some grants does seem to be related to per capita income. However, our analysis reveals the difficulty of imputing altruistic motives to politicians without taking into account the institutional or behavioral environment within which the politician functions. The model we have developed indicates that politicians are largely interested in income distribution only to the extent that it furthers their self-interest.
The ability of politicians to improve the welfare of the average citizen of his state will, in part, depend upon his seniority and the number of citizens he represents. Citizens of states with politicians of greater seniority, and who are represented by relatively more politicians are more likely to be treated more favorably by the federal government. In short, not all citizens receive the same quality or quantity of representation. The oft-repeated claim by incumbent politicians that they should be re-elected because their seniority gives them more influence appears to have merit. Taking into account the higher benefits and lower taxes resulting from a six-year senatorial term, the average citizen will find that re-election of the incumbent senator is worth approximately $ 45, other things equal.
This paper identifies two problems in Wallis's (1998) analysis of New Deal spending, addresses those problems, and contributes new findings. One problem is the interpretation of 1/population as an apolitical variable. The other is that, although Wallis discusses land area as a criterion in spending formulas, his econometric analysis omits land area. Controlling for land area eliminates Wallis's estimated effects of 1/population. After discussing those problems, this paper presents an empirical relationship sought but not uncovered by previous authors: A few land and income variables can predict the vast majority of the cross-state variation in per capita spending.
Social welfare programs in the United States are designed to serve as safety nets for people in hard times, in contrast with the universal approach found in many other developed western nations. In a survey of Cliometric studies of social welfare programs in the U.S., we examine the variation in the safety net in the U.S. across states in the 20th century, the determinants of the variation, and its impact on socioeconomic outcomes. The U.S. has always displayed substantial variation in the extent of the safety net because the features of most public social welfare programs are and were determined by local and state governments, even after the federal government became involved. Differences across states persist strongly for typically a decade, although the persistence weakens with time, and there are some periods when federal intervention led to a re-ordering. The rankings of state benefits differs from program to program, and economic and political factors have different weights in determining benefit levels in panel data estimation of their effects. Variation in benefits across programs during the early 1900s had significant impact on labor markets, economic activity, family formation, death rates, and crime.
This article demonstrates important effects of voter participation. A model shows why, for some types of distributive policy, incumbents are more likely to be reelected if high-turnout regions receive more funds than do low-turnout regions. This prediction is tested with county-level data from the New Deal's Federal Emergency Relief Administration (FERA). The estimates suggest that by voting rather than not voting an individual increased by about $30 the expected FERA allocation for the individual's county. The size of the estimated effect differs across states. Copyright 1999 by Oxford University Press.
This study analyzes the effects of right-wing extremism on the well-being of immigrants based on data from the German Socio-Economic Panel (SOEP) for the years 1984 to 2006 merged with state-level information on election outcomes. The results show that the life satisfaction of immigrants is significantly reduced if right-wing extremism in the native population increases. Moreover ; the life satisfaction of highly educated immigrants is affected more strongly than that of low-skilled immigrants. This supports the view that policies aimed at making immigration more attractive to the high-skilled have to include measures that reduce xenophobic attitudes in the native population. --
States that were represented by very senior Democratic congressmen grew more quickly during the 1953-90 period than states that were represented by more junior congressional delegations. States with a large fraction of politically competitive House districts also grew faster than average. The first finding is consistent with traditional legislator-based models of distributive politics, the second with partisan models. The authors cannot detect any substantively important association between seniority, state political competition, and the geographic distribution of federal funds, so higher district-specific federal spending does not appear to be the source of the link between state economic growth and congressional representation. Copyright 1999 by Kluwer Academic Publishers
Legislators in a representative democracy are modeled as being able to allocate a fixed amount of effort between two objectives: national policymaking and local benefit-seeking. The model predicts that the effort allocated to local benefit-seeking should be a negative function of the population size of a legislator's constituency. The authors empirically test and confirm this prediction by examining the manner in which U.S. senators allocate their personal staff between home state and Washington D.C. offices. Copyright 1997 by Kluwer Academic Publishers
Social welfare programs in the United States are designed to serve as safety nets for people in hard times, in contrast with the universal approach found in many other developed western nations. In a survey of Cliometric studies of social welfare programs in the U.S., we examine the variation in the safety net in the U.S. across states in the 20th century, the determinants of the variation, and its impact on socioeconomic outcomes. The U.S. has always displayed substantial variation in the extent of the safety net because the features of most public social welfare programs are and were determined by local and state governments, even after the federal government became involved. Differences across states persist strongly for typically a decade, although the persistence weakens with time, and there are some periods when federal intervention led to a re-ordering. The rankings of state benefits differs from program to program, and economic and political factors have different weights in determining benefit levels in panel data estimation of their effects. Variation in benefits across programs during the early 1900s had significant impact on labor markets, economic activity, family formation, death rates, and crime.
Social welfare programs in the United States are designed to serve as safety nets for people in hard times, in contrast with the universal approach found in many other developed western nations. In a survey of Cliometric studies of social welfare programs in the U.S., we examine the variation in the safety net in the U.S. across states in the 20th century, the determinants of the variation, and its impact on socioeconomic outcomes. The U.S. has always displayed substantial variation in the extent of the safety net because the features of most public social welfare programs are and were determined by local and state governments, even after the federal government became involved. Differences across states persist strongly for typically a decade, although the persistence weakens with time, and there are some periods when federal intervention led to a re-ordering. The rankings of state benefits differs from program to program, and economic and political factors have different weights in determining benefit levels in panel data estimation of their effects. Variation in benefits across programs during the early 1900s had significant impact on labor markets, economic activity, family formation, death rates, and crime.
America at the polls
- A V Mcgillivray
- R M Scammon
- R Cook
McGillivray, A. V., Scammon, R. M., & Cook, R. (2001). America at the polls 1960–2000.
Washington DC: CQ Press.
Federal domestic outlays, 1983–1990: A data book
- K N Bickers
- R M Stein
Bickers, K. N., & Stein, R. M. (1991). Federal domestic outlays, 1983–1990: A data book.
Armonk, NY: M.E. Sharpe.
Congressional quarterly's guide to U.S. elections
- J L Moore
- J P Preimesberger
- D R Tarr
Moore, J. L., Preimesberger, J. P., & Tarr, D. R. (2001). Congressional quarterly's guide to
U.S. elections. Washington DC: CQ Press.