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The Effect of Patronage Politics on City Government in American Cities, 1900-1910

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  • Rebecca Menes
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    Abstract

    In this paper I explore the effect of patronage or machine' politics on government performance in American cities during the Progressive era. I use game theoretic models and an empirical analysis of spending and public goods provision during the first decade of the twentieth century in a cross section of American cities with and without governments dominated by political machines. The ability to buy votes relaxes the electoral constraints on the government. Taxes, budgets, municipal wages, and (unobserved) corruption are all predicted to rise under a patronage based regime. But in a city, patronage politics does not relax the incentives to provide public goods. A politician who buys his way into office will still be motivated to provide optimal levels of government goods and services because he can capture the resulting locational rents in higher taxes and graft. Empirically, city governments dominated by political machines paid city government employees more and had larger budgets but provided high levels of public goods.

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    Bibliographic Info

    Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 6975.

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    Date of creation: Feb 1999
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    Handle: RePEc:nbr:nberwo:6975

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    1. Ades, Alberto F & Glaeser, Edward L, 1995. "Trade and Circuses: Explaining Urban Giants," The Quarterly Journal of Economics, MIT Press, vol. 110(1), pages 195-227, February.
    2. Krueger, Anne O, 1993. "Virtuous and Vicious Circles in Economic Development," American Economic Review, American Economic Association, vol. 83(2), pages 351-55, May.
    3. Goldin, Claudia & Rockoff, Hugh (ed.), 1992. "Strategic Factors in Nineteenth Century American Economic History," National Bureau of Economic Research Books, University of Chicago Press, edition 1, number 9780226301129, January.
    4. Martin C. McGuire & Mancur Olson Jr., 1996. "The Economics of Autocracy and Majority Rule: The Invisible Hand and the Use of Force," Journal of Economic Literature, American Economic Association, vol. 34(1), pages 72-96, March.
    5. J. Bradford De Long & Andrei Shleifer, . "Princes and Merchants: City Growth Before the Industrial Revolution," J. Bradford De Long's Working Papers _111, University of California at Berkeley, Economics Department.
    6. Murphy, Kevin M & Shleifer, Andrei & Vishny, Robert W, 1993. "Why Is Rent-Seeking So Costly to Growth?," American Economic Review, American Economic Association, vol. 83(2), pages 409-14, May.
    7. Mauro, Paolo, 1995. "Corruption and Growth," The Quarterly Journal of Economics, MIT Press, vol. 110(3), pages 681-712, August.
    8. James E. Rauch, 1994. "Bureaucracy, Infrastructure, and Economic Growth: Evidence from U.S. Cities During the Progressive Era," NBER Working Papers 4973, National Bureau of Economic Research, Inc.
    9. Joseph D. Reid, Jr. & Michael M. Kurth, 1992. "The Rise and Fall of Urban Political Patronage Machines," NBER Chapters, in: Strategic Factors in Nineteenth Century American Economic History: A Volume to Honor Robert W. Fogel, pages 427-445 National Bureau of Economic Research, Inc.
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    Cited by:
    1. Rebecca Menes, 2006. "Limiting the Reach of the Grabbing Hand. Graft and Growth in American Cities, 1880 to 1930," NBER Chapters, in: Corruption and Reform: Lessons from America's Economic History, pages 63-94 National Bureau of Economic Research, Inc.

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