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Explaining Government Growth in the U.S. States

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  • Garand, James C.

Abstract

Despite the explosive increase in the research program on government growth in recent years, little work has been done on government growth disaggregated to the subnational level. I examine the empirical validity of five competing models of government growth for the fifty U.S. states from 1945 to 1984: Wagner's Law, fiscal illusion, party control, bureau voting, and intergovernmental grant. Government size is defined in terms of state government spending as a proportion of total state economic output, with separate implicit price deflators being employed for the public and private sectors. Based on a longitudinal test of these competing models, the analysis uncovers strong empirical support for the bureau voting and intergovernmental grant models, moderately weak support for the Wagner's Law model, and virtually no support for the fiscal illusion and party control explanations. These findings have important implications for the study of government growth in general and, more specifically, in the states.

Suggested Citation

  • Garand, James C., 1988. "Explaining Government Growth in the U.S. States," American Political Science Review, Cambridge University Press, vol. 82(3), pages 837-849, September.
    • Handle: RePEc:cup:apsrev:v:82:y:1988:i:03:p:837-849_19
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    Cited by:

    1. Timothy Besley & Anne Case, 2003. "Political Institutions and Policy Choices: Evidence from the United States," Journal of Economic Literature, American Economic Association, vol. 41(1), pages 7-73, March.
    2. Nicholas Apergis, 2018. "Do 'Labour' Councils Lower Economic Freedom?," Bulletin of Monetary Economics and Banking, Bank Indonesia, vol. 21(2), pages 149-160, October.
    3. Solé-Ollé, Albert & Viladecans-Marsal, Elisabet, 2013. "Do political parties matter for local land use policies?," Journal of Urban Economics, Elsevier, vol. 78(C), pages 42-56.
    4. Niklas Potrafke, 2018. "Government ideology and economic policy-making in the United States—a survey," Public Choice, Springer, vol. 174(1), pages 145-207, January.
    5. Buchheim, Lukas & Fretz, Stephan, 2020. "Parties, divided government, and infrastructure expenditures: Evidence from U.S. states," European Journal of Political Economy, Elsevier, vol. 61(C).
    6. Louis-Philippe Beland & Bulent Unel, 2018. "The impact of party affiliation of US governors on immigrants’ labor market outcomes," Journal of Population Economics, Springer;European Society for Population Economics, vol. 31(2), pages 627-670, April.
    7. Darío Cestau, 2018. "The political affiliation effect on state credit risk," Public Choice, Springer, vol. 175(1), pages 135-154, April.
    8. Leigh, Andrew, 2008. "Estimating the impact of gubernatorial partisanship on policy settings and economic outcomes: A regression discontinuity approach," European Journal of Political Economy, Elsevier, vol. 24(1), pages 256-268, March.
    9. Andrew C. Pickering & James Rockey, 2012. "Ideology and the growth of US state government," Working Papers 2012/6, Institut d'Economia de Barcelona (IEB).
    10. Andrew Pickering & James Rockey, 2013. "Ideology and the size of US state government," Public Choice, Springer, vol. 156(3), pages 443-465, September.
    11. Therese A. Mccarty & Stephen J. Schmidt, 2001. "Dynamic Patterns in State Government Finance," Public Finance Review, , vol. 29(3), pages 208-222, May.
    12. François Petry & Louis Imbeau & Jean Crête & Michel Clavet, 2000. "Explaining the Evolution of Government Size in the Canadian Provinces," Public Finance Review, , vol. 28(1), pages 26-47, January.
    13. Andrew Leigh, 2005. "What’s the Difference Between a Donkey and an Elephant? Using Panel Data from US States to Estimate the Impact of Partisanship on Policy Settings and Economic Outcomes," CEPR Discussion Papers 504, Centre for Economic Policy Research, Research School of Economics, Australian National University.
    14. Noel D. Campbell & R. Zachary Finney & David T. Mitchell, 2007. "Hunting the Whale: More Evidence on State Government Leviathans," Southern Economic Journal, John Wiley & Sons, vol. 74(2), pages 566-580, October.
    15. Solé-Ollé, Albert & Viladecans-Marsal, Elisabet, 2013. "Do political parties matter for local land use policies?," Journal of Urban Economics, Elsevier, vol. 78(C), pages 42-56.

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