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Allocating the U.S. federal budget to the states: the impact of the president

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  • Larcinese, Valentino
  • Rizzo, Leonzio
  • Testa, Cecilia

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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Bibliographic Info

Paper provided by London School of Economics and Political Science in its series Open Access publications from London School of Economics and Political Science with number http://eprints.lse.ac.uk/3967/.

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Date of creation: May 2006
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Publication status: Published in Journal of politics (2006-05) v.68, p.447-456
Handle: RePEc:ner:lselon:http://eprints.lse.ac.uk/3967/

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  1. Marilyn Young & Michael Reksulak & William F. Shughart, 2001. "The Political Economy of the IRS," Economics and Politics, Wiley Blackwell, vol. 13(2), pages 201-220, 07.
  2. David Strömberg, 2004. "Radio's Impact on Public Spending," The Quarterly Journal of Economics, MIT Press, vol. 119(1), pages 189-221, February.
  3. 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.
  4. 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.
  5. Wiji Arulampalam & Sugato Dasgupta & Amrita Dhillon & Bhaskar Dutta, 2008. "Electoral goals and center-state transfers: A Theoretical model and empirical evidence from India," Indian Statistical Institute, Planning Unit, New Delhi Discussion Papers 08-14, Indian Statistical Institute, New Delhi, India.
  6. Dahlberg, M. & Johansson, E., 1999. "On the Vote Purchasing Behavior of Incumbent Governments," Papers 1999:24, Uppsala - Working Paper Series.
  7. Anderson, Gary M & Tollison, Robert D, 1991. "Congressional Influence and Patterns of New Deal Spending, 1933-1939," Journal of Law and Economics, University of Chicago Press, vol. 34(1), pages 161-75, April.
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  1. repec:ept:journl:v:xxiii:y:2006:i:77en:p:89-120 is not listed on IDEAS
  2. 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.
  3. Zudenkova, Galina, 2010. "A Political Agency Model of Coattail Voting," MPRA Paper 28800, University Library of Munich, Germany.
  4. Leonzio Rizzo & Valentino Larcinese & Cecilia Testa, 2012. "Why Do Small States Receive More Federal Money? US Senate Representation and the Allocation of Federal Budget," Working Papers 201215, University of Ferrara, Department of Economics.
  5. Viktor Slavtchev & Simon Wiederhold, 2012. "Technological Intensity of Government Demand and Innovation," Ifo Working Paper Series Ifo Working Paper No. 135, Ifo Institute for Economic Research at the University of Munich.
  6. Albert Solé-Ollé, 2009. "Inter-regional redistribution through infrastructure investment: tactical or programmatic?," Working Papers XREAP2009-13, Xarxa de Referència en Economia Aplicada (XREAP), revised Nov 2009.
  7. 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.
  8. Emanuele Bracco & Francesco Porcelli & Michela Redoano, 2013. "Incumbent Effects and Partisan Alignment in Local Elections: A Regression Discontinuity Analysis Using Italian Data," CESifo Working Paper Series 4061, CESifo Group Munich.
  9. Matthias Dahm & Amihai Glazer, 2012. "How An Agenda Setter Induces Legislators to Adopt Policies They Oppose," Economics Working Paper from Condorcet Center for political Economy at CREM-CNRS 2012-11-ccr, Condorcet Center for political Economy.
  10. 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.
  11. Viktor Slavtchev & Simon Wiederhold, 2011. "The Impact of Government Procurement Composition on Private R&D Activities," Jena Economic Research Papers 2011-036, Friedrich-Schiller-University Jena, Max-Planck-Institute of Economics.
  12. Leonzio Rizzo, 2008. "Local government responsiveness to federal transfers: theory and evidence," International Tax and Public Finance, Springer, vol. 15(3), pages 316-337, June.

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