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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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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