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The Allocation of the US Federal Budget to the States: Evidence on the Power of the Purse

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Author Info
Valentino Larcinese (London School of Economics and Political Science, Department of Government and STICERD)
Leonzio Rizzo (Universita’ di Ferrara, Department of Economics)
Cecilia Testa () (Department of Economics, Royal Holloway, University of London)

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Abstract

This paper provides new evidence on the determinants of the allocation of the US federal budget to the states. We find that the president has a strong influence on the budget allocation, while support for theories that give prominence to the Congress is rather weak. Membership of prestige committees is not used to divert federal spending nor does membership of the Armed Services committee affects defense spending. The presidential race matters. States that are historically volatile or extremely safe in presidential elections tend to receive more funds, while marginal states are not rewarded. Finally, we find good evidence in support of partisan theories. 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.

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Publisher Info
Paper provided by Department of Economics, Royal Holloway University of London in its series Royal Holloway, University of London: Discussion Papers in Economics with number 04/25.

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Length: 34 pages
Date of creation: Oct 2004
Date of revision: Oct 2004
Handle: RePEc:hol:holodi:0425

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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
D78 - Microeconomics - - Analysis of Collective Decision-Making - - - Positive Analysis of Policy-Making and Implementation
H11 - Public Economics - - Structure and Scope of Government - - - Structure and Scope of Government
H60 - Public Economics - - National Budget, Deficit, and Debt - - - General
H77 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Intergovernmental Relations; Federalism
H50 - Public Economics - - National Government Expenditures and Related Policies - - - General

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References listed on IDEAS
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  1. Levitt, Steven D & Poterba, James M, 1999. " Congressional Distributive Politics and State Economic Performance," Public Choice, Springer, vol. 99(1-2), pages 185-216, April. [Downloadable!] (restricted)
    Other versions:
  2. 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)
  3. McCubbins, Mathew D & Noll, Roger G & Weingast, Barry R, 1987. "Administrative Procedures as Instruments of Political Control," Journal of Law, Economics and Organization, Oxford University Press, vol. 3(2), pages 243-77, Fall.
  4. Lindbeck, Assar & Weibull, Jorgen W., 1993. "A model of political equilibrium in a representative democracy," Journal of Public Economics, Elsevier, vol. 51(2), pages 195-209, June. [Downloadable!] (restricted)
  5. Dahlberg, M. & Johansson, E., 1999. "On the Vote Purchasing Behavior of Incumbent Governments," Papers 1999:24, Uppsala - Working Paper Series.
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  6. Levitt, Steven D & Snyder, James M, Jr, 1997. "The Impact of Federal Spending on House Election Outcomes," Journal of Political Economy, University of Chicago Press, vol. 105(1), pages 30-53, February.
    Other versions:
  7. 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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