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Allocating the US Federal Budget to the States: the Impact of the President

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Author Info
Valentino Larcinese
Leonzio Rizzo
Cecilia Testa

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Abstract

This paper provides new evidence on the determinants of the US federal budget allocation to the states. Departing from the existing literature that gives prominence to Congress, we carry on an empirical investigation on the impact of Presidents during the period 1982-2000. Our findings suggest that the distribution of federal outlays to the States is affected by presidential politics. First, presidential elections matter. States that heavily supported the incumbent President in past presidential elections tend to receive more funds, while marginal and swing states are not rewarded. Second, party affiliation also plays an important role since states whose governor has the same political affiliation of the President receive more federal funds, while states opposing the president's party in Congressional elections are penalized. These results show that presidents are engaged in tactical distribution of federal funds and also provide good evidence in support of partisan theories of budget allocation.

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Publisher Info
Paper provided by Suntory and Toyota International Centres for Economics and Related Disciplines, LSE in its series STICERD - Political Economy and Public Policy Paper Series with number 03.

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Date of creation: Jun 2005
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Handle: RePEc:cep:stipep:03

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Related research
Keywords: Federal Budget; Pork-Barrell; President; Congress; Political Parties; Committees; American Elections;

Find related papers by JEL classification:
D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Models of Political Processes: Rent-seeking, Elections, Legislatures, and Voting Behavior
H61 - Public Economics - - National Budget, Deficit, and Debt - - - Budget; Budget Systems
H70 - Public Economics - - State and Local Government; Intergovernmental Relations - - - General

References listed on IDEAS
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  1. David Strömberg, 2004. "Radio's Impact on Public Spending," The Quarterly Journal of Economics, MIT Press, vol. 119(1), pages 189-221, February. [Downloadable!] (restricted)
  2. Anderson, Gary M & Tollison, Robert D, 1991. "Congressional Influence and Patterns of New Deal Spending, 1933-1939," Journal of Law & Economics, University of Chicago Press, vol. 34(1), pages 161-75, April.
  3. Dahlberg, Matz & Johansson, Eva, 1999. "On the Vote Purchasing Behavior of Incumbent Governments," Working Paper Series 1999:24, Uppsala University, Department of Economics. [Downloadable!]
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  4. Arulampalam, Wiji & Dasgupta, Sugato & Dhillon, Amrita & Dutta, Bhaskar, 2008. "Electoral Goals and Center-State Transfers: A Theoretical Model and Empirical Evidence from India," IZA Discussion Papers 3376, Institute for the Study of Labor (IZA). [Downloadable!]
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  5. Wright, Gavin, 1974. "The Political Economy of New Deal Spending: An Econometric Analysis," The Review of Economics and Statistics, MIT Press, vol. 56(1), pages 30-38, February. [Downloadable!] (restricted)
  6. Alvarez, R Michael & Saving, Jason L, 1997. " Congressional Committees and the Political Economy of Federal Outlays," Public Choice, Springer, vol. 92(1-2), pages 55-73, July. [Downloadable!] (restricted)
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Cited by:
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  1. Vaughan Dickson, 2009. "Seat-vote curves, loyalty effects and the provincial distribution of Canadian government spending," Public Choice, Springer, vol. 139(3), pages 317-333, June. [Downloadable!] (restricted)
  2. Marcelin Joanis, 2008. "The Road to Power: Partisan Loyalty and the Centralized Provision of Local Infrastructure," Cahiers de recherche 08-15, Departement d'Economique de la Faculte d'administration à l'Universite de Sherbrooke. [Downloadable!]
  3. Larcinese, Valentino & Rizzo, Leonzio & Testa, Cecilia, 2007. "Do Small States Get More Federal Monies? Myth and Reality about the US Senate Malapportionment," MPRA Paper 5339, University Library of Munich, Germany. [Downloadable!]
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  4. Rizzo, Leonzio, 2006. "Local government responsiveness to federal transfers: theory and evidence," MPRA Paper 5373, University Library of Munich, Germany. [Downloadable!]
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