Political Competition, Policy and Growth: Theory and Evidence from the United States
AbstractThis paper develops a simple model to analyze how a lack of political competition may lead to policies that hinder economic growth. We test the predictions of the model on panel data for the US states. In these data, we find robust evidence that lack of political competition in a state is associated with anti-growth policies: higher taxes, lower capital spending and a reduced likelihood of using right-to-work laws. We also document a strong link between low political competition and low income growth.
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Bibliographic InfoPaper provided by Centre for Economic Performance, LSE in its series CEP Discussion Papers with number dp1009.
Date of creation: Oct 2010
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political competition; competition; government; US; economic development;
Find related papers by JEL classification:
- D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
- H11 - Public Economics - - Structure and Scope of Government - - - Structure and Scope of Government
- H70 - Public Economics - - State and Local Government; Intergovernmental Relations - - - General
- N12 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations - - - U.S.; Canada: 1913-
- O11 - Economic Development, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
This paper has been announced in the following NEP Reports:
- NEP-ALL-2010-11-13 (All new papers)
- NEP-CDM-2010-11-13 (Collective Decision-Making)
- NEP-FDG-2010-11-13 (Financial Development & Growth)
- NEP-POL-2010-11-13 (Positive Political Economics)
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