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Distributive Politics and Electoral Incentives: Evidence from Seven US State Legislatures

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  • Toke S. Aidt
  • Julia Shvets

Abstract

We study the effect of electoral incentives on the allocation of public services across legislative districts. We develop a model in which elections encourage legislators to cater to parochial interests and thus aggravate the common pool problem. Using unique data from seven US states, we study how the amount of funding that a legislator channels to his district changes when he faces a term limit. We find that legislators bring less pork to their district when they cannot seek re-election. Consistent with the Law of 1/N, this last term reduction in funding is smaller in states with many legislative districts. (JEL D72, H70)

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Bibliographic Info

Article provided by American Economic Association in its journal American Economic Journal: Economic Policy.

Volume (Year): 4 (2012)
Issue (Month): 3 (August)
Pages: 1-29

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Handle: RePEc:aea:aejpol:v:4:y:2012:i:3:p:1-29

Note: DOI: 10.1257/pol.4.3.1
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References

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  1. Brian Knight, 2005. "Estimating the Value of Proposal Power," American Economic Review, American Economic Association, vol. 95(5), pages 1639-1652, December.
  2. Gilligan, Thomas W & Matsusaka, John G, 1995. "Deviations from Constituent Interests: The Role of Legislative Structure and Political Parties in the States," Economic Inquiry, Western Economic Association International, vol. 33(3), pages 383-401, July.
  3. Alesina, Alberto & Spear, Stephen, 1988. "An Overlapping Generations Model of Electoral Competition," Scholarly Articles 4553015, Harvard University Department of Economics.
  4. Eric Maskin & Jean Tirole, 2004. "The Politician and the Judge: Accountability in Government," American Economic Review, American Economic Association, vol. 94(4), pages 1034-1054, September.
  5. John A List & Daniel M Sturm, 2006. "How Elections Matter: Theory and Evidence from Environmental Policy," The Quarterly Journal of Economics, MIT Press, vol. 121(4), pages 1249-1281, November.
  6. Sanjit Dhami, 2001. "The Political Economy of Redistribution Under Asymmetric Information," Game Theory and Information 0108001, EconWPA.
  7. Bernhardt, Dan & Dubey, Sangita & Hughson, Eric, 2004. "Term limits and pork barrel politics," Journal of Public Economics, Elsevier, vol. 88(12), pages 2383-2422, December.
  8. Marco Battaglini & Stephen Coate, 2007. "Inefficiency in Legislative Policymaking: A Dynamic Analysis," American Economic Review, American Economic Association, vol. 97(1), pages 118-149, March.
  9. Reza Baqir, 2002. "Districting and Government Overspending," Journal of Political Economy, University of Chicago Press, vol. 110(6), pages 1318-1354, December.
  10. Toke S. Aidt & Julia Shvets, 2012. "Distributive Politics and Electoral Incentives: Evidence from Seven US State Legislatures," American Economic Journal: Economic Policy, American Economic Association, vol. 4(3), pages 1-29, August.
  11. Chiara Dalle Nogare & Roberto Ricciuti, 2008. "Term Limits: Do they really Affect Fiscal Policy Choices?," CESifo Working Paper Series 2199, CESifo Group Munich.
  12. Leah Brooks & Justin Phillips & Maxim Sinitsyn, 2011. "The Cabals of a Few or the Confusion of a Multitude: The Institutional Trade-Off between Representation and Governance," American Economic Journal: Economic Policy, American Economic Association, vol. 3(1), pages 1-24, February.
  13. Besley, Timothy & Case, Anne, 1995. "Does Electoral Accountability Affect Economic Policy Choices? Evidence from Gubernatorial Term Limits," The Quarterly Journal of Economics, MIT Press, vol. 110(3), pages 769-98, August.
  14. Per Pettersson-Lidbom, 2004. "Does the Size of the Legislature Affect the Size of Government? Evidence from Two Natural Experiments," Discussion Papers 350, Government Institute for Economic Research Finland (VATT).
  15. W. Robert Reed, 1994. "A Retrospective Voting Model With Heterogeneous Politicians," Economics and Politics, Wiley Blackwell, vol. 6(1), pages 39-58, 03.
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Citations

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Cited by:
  1. Jon X. Eguia & Antonio Nicolò, 2011. "On the Efficiency of Partial Information in Elections," Carlo Alberto Notebooks 234, Collegio Carlo Alberto.
  2. Aidt, T.S. & Shvets, J., 2011. "Distributive Politics and Electoral Incentives: Evidence from Seven US State Legislatures," Cambridge Working Papers in Economics 1130, Faculty of Economics, University of Cambridge.
  3. Leandro De Magalhães & Lucas Ferrero, 2012. "Separation of Powers and the Size of Government in the U.S. States Abstract: According to our model effective 'budgetary' separation of power occurs in the states with the line-item veto when the Gove," The Centre for Market and Public Organisation 12/285, Department of Economics, University of Bristol, UK.
  4. Marroquín Arreola, Juan & Rios Bolívar, Humberto, 2012. "Gasto público, permanencia en el poder y crecimiento económico /Public Spending, Staying Power and Economic Growth," Estudios de Economía Aplicada, Estudios de Economía Aplicada, vol. 30, pages 363 (22 pag, Abril.
  5. Janne Tukiainen & Tuukka Saarimaa, 2013. "Common Pool Problems in Voluntary Municipal Mergers," Working Papers 53, Government Institute for Economic Research Finland (VATT).

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