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Political Competition, Policy and Growth: Theory and Evidence from the US

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  • Timothy Besley
  • Torsten Persson
  • Daniel M. Sturm

Abstract

This paper develops a simple model to analyse how a lack of political competition may lead to policies that hinder economic growth. We test the predictions of the model on panel data for the US states. In these data, we find robust evidence that lack of political competition in a state is associated with anti-growth policies: higher taxes, lower capital spending, and a reduced likelihood of using rightto- work laws. We also document a strong link between low political competition and low income growth. Copyright , Wiley-Blackwell.

Suggested Citation

  • Timothy Besley & Torsten Persson & Daniel M. Sturm, 2010. "Political Competition, Policy and Growth: Theory and Evidence from the US," Review of Economic Studies, Oxford University Press, vol. 77(4), pages 1329-1352.
  • Handle: RePEc:oup:restud:v:77:y:2010:i:4:p:1329-1352
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    File URL: http://hdl.handle.net/10.1111/j.1467-937X.2010.00606.x
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