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The Politics of Infrastructure

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  • Crain, W Mark
  • Oakley, Lisa K

Abstract

A number of recent studies attempt to measure the productivity of public capital. Some estimates indicate that government investments are a potential wellspring for economic progress, while others indicate that public infrastructure has a negligible effect on private sector output. This article investigates political institutions and processes underlying the decisions for public infrastructure spending. We apply the framework of strategic models of fiscal policy and develop an empirical model to analyze the substantial differences in public capital across American states. Institutions such as term limits, citizen initiative, and budgeting procedures were significant determinants of state public capital stocks and the flow of new public investments during the 1980s. The results further suggest that political conditions such as legislative stability and voter volatility are systematically related to infrastructure differences across states. Copyright 1995 by the University of Chicago.

Suggested Citation

  • Crain, W Mark & Oakley, Lisa K, 1995. "The Politics of Infrastructure," Journal of Law and Economics, University of Chicago Press, vol. 38(1), pages 1-17, April.
  • Handle: RePEc:ucp:jlawec:v:38:y:1995:i:1:p:1-17
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    File URL: http://dx.doi.org/10.1086/467323
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    1. Tabellini, Guido & Alesina, Alberto, 1990. "Voting on the Budget Deficit," American Economic Review, American Economic Association, vol. 80(1), pages 37-49, March.
    2. Aschauer, David Alan, 1989. "Does public capital crowd out private capital?," Journal of Monetary Economics, Elsevier, vol. 24(2), pages 171-188, September.
    3. Alicia H. Munnell, 1992. "Policy Watch: Infrastructure Investment and Economic Growth," Journal of Economic Perspectives, American Economic Association, vol. 6(4), pages 189-198, Fall.
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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. Fumitoshi Mizutani & Tomoyasu Tanaka, 2010. "Productivity effects and determinants of public infrastructure investment," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 44(3), pages 493-521, June.
    3. Luca, Davide & Rodriguez-Pose, Andres, 2014. "Electoral politics and regional development: assessing the geographical allocation of public investment in Turkey," CEPR Discussion Papers 10043, C.E.P.R. Discussion Papers.
    4. Cadot, Olivier & Roller, Lars-Hendrik & Stephan, Andreas, 2006. "Contribution to productivity or pork barrel? The two faces of infrastructure investment," Journal of Public Economics, Elsevier, vol. 90(6-7), pages 1133-1153, August.
    5. John Lott, 2006. "Campaign finance reform and electoral competition," Public Choice, Springer, vol. 129(3), pages 263-300, December.
    6. Christine Pappas & Jeanette Mendez & Rebekah Herrick, 2009. "The Negative Effects of Populism on Gay and Lesbian Rights," Social Science Quarterly, Southwestern Social Science Association, vol. 90(1), pages 150-163.
    7. Crain, W. Mark & Crain, Nicole Verrier, 1998. "Fiscal consequences of budget baselines," Journal of Public Economics, Elsevier, vol. 67(3), pages 421-436, March.
    8. Dalle Nogare, Chiara & Ricciuti, Roberto, 2011. "Do term limits affect fiscal policy choices?," European Journal of Political Economy, Elsevier, vol. 27(4), pages 681-692.
    9. Lopes da Fonseca, Mariana, 2015. "Lame but loyal ducks," Center for European, Governance and Economic Development Research Discussion Papers 254, University of Goettingen, Department of Economics.
    10. W. Mark Crain, 1995. "The Right Versus The Obligation To Vote: Rejoinder To Yeret, And O'Toole And Strobl," Economics and Politics, Wiley Blackwell, vol. 7(3), pages 281-287, November.
    11. Edward López & R. Jewell, 2007. "Strategic institutional choice: Voters, states, and congressional term limits," Public Choice, Springer, vol. 132(1), pages 137-157, July.
    12. Mariana Lopes da Fonseca, 2016. "Candid Lame Ducks," CESifo Working Paper Series 5773, CESifo Group Munich.
    13. Matsusaka, John G, 2000. "Fiscal Effects of the Voter Initiative in the First Half of the Twentieth Century," Journal of Law and Economics, University of Chicago Press, vol. 43(2), pages 619-650, October.
    14. Kemmerling, Achim & Stephan, Andreas, 2015. "Comparative political economy of regional transport infrastructure investment in Europe," Journal of Comparative Economics, Elsevier, vol. 43(1), pages 227-239.
    15. Bodenstein, Thilo and Achim Kemmerling, 2012. "Ripples in a rising tide: Why some EU regions receive more structural funds than others," European Integration online Papers (EIoP), European Community Studies Association Austria (ECSA-A), vol. 16, January.
    16. Kemmerling, Achim & Stephan, Andreas, 2002. "The Contribution of Local Public Infrastructure to Private Productivity and Its Political Economy: Evidence from a Panel of Large German Cities," Public Choice, Springer, vol. 113(3-4), pages 403-424, December.
    17. Naveed H. Naqvi, 2002. "Crowding-in or Crowding-out? Modelling the Relationship between Public and Private Fixed Capital Formation Using Co-integration Analysis: The Case of Pakistan 1964-2000," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 41(3), pages 255-276.
    18. repec:unt:jnapdj:v:24:y:2017:i:2:p:113-139 is not listed on IDEAS
    19. Riccardo Crescenzi & Marco Di Cataldo & Andrés Rodríguez-Pose, 2016. "Government Quality And The Economic Returns Of Transport Infrastructure Investment In European Regions," Journal of Regional Science, Wiley Blackwell, vol. 56(4), pages 555-582, September.
    20. David Albouy, 2013. "Partisan Representation in Congress and the Geographic Distribution of Federal Funds," The Review of Economics and Statistics, MIT Press, vol. 95(1), pages 127-141, March.
    21. David Levinson & Ramachandra Karamalaputi, 2003. "Induced Supply: A Model of Highway Network Expansion at the Microscopic Level," Journal of Transport Economics and Policy, University of Bath, vol. 37(3), pages 297-318, September.
    22. Lott, John R, Jr, 2000. "A Simple Explanation for Why Campaign Expenditures Are Increasing: The Government Is Getting Bigger," Journal of Law and Economics, University of Chicago Press, vol. 43(2), pages 359-393, October.
    23. Mohanty, Biswajit & Bhanumurthy, N. R. & Dastidar, Ananya Ghosh, 2017. "What explains Regional Imbalances in Infrastructure?: Evidence from Indian States," Working Papers 17/197, National Institute of Public Finance and Policy.
    24. Celbis, M.G. & Crombrugghe, D. de & Muysken, J., 2014. "Public investment and regional politics: The case of Turkey," MERIT Working Papers 020, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).

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