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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

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  • Andrew Leigh

Abstract

Using panel data from US states, I measure the impact of partisanship on a wide range of different policy settings and economic outcomes. Across 32 measures, there are surprisingly few differences in policy settings, social outcomes and economic outcomes under Democrats and Republicans. In terms of policies, Democratic Governors tend to prefer slightly higher minimum wages and more redistributive taxes. Under Republican Governors, incarceration rates are higher, while welfare caseloads are higher under Democratic Governors. In terms of social and economic outcomes, Democratic Governors tend to preside over higher median post-tax income, lower post-tax inequality, and lower unemployment rates. However, for 25 of the 32 dependent variables, gubernatorial partisanship does not have a statistically significant impact on policy outcomes and social welfare. I find no evidence of gubernatorial partisan differences in welfare generosity, the number of government employees or their salaries, state revenue, incarceration rates, execution rates, pre-tax incomes and inequality, crime rates, suicide rates, and test scores. These results are robust to the use of regression discontinuity estimation, to take account of the possibility of reverse causality. Overall, it seems that Governors behave in a fairly non-ideological manner.

Suggested Citation

  • 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.
  • Handle: RePEc:auu:dpaper:504
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    File URL: https://www.cbe.anu.edu.au/researchpapers/cepr/DP504.pdf
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    References listed on IDEAS

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    1. Andrew Leigh, 2005. "Can Redistributive State Taxes Reduce Inequality?," CEPR Discussion Papers 490, Centre for Economic Policy Research, Research School of Economics, Australian National University.
    2. Anthony Downs, 1957. "An Economic Theory of Political Action in a Democracy," Journal of Political Economy, University of Chicago Press, vol. 65, pages 135-135.
    3. repec:cup:apsrev:v:83:y:1989:i:03:p:729-750_08 is not listed on IDEAS
    4. Wu, Ximing & Perloff, Jeffrey M. & Golan, Amos, 2002. "Effects of Government Policies on Income Distribution and Welfare," Department of Agricultural & Resource Economics, UC Berkeley, Working Paper Series qt74r4h1fc, Department of Agricultural & Resource Economics, UC Berkeley.
    5. Roemer, John E., 1998. "Why the poor do not expropriate the rich: an old argument in new garb," Journal of Public Economics, Elsevier, vol. 70(3), pages 399-424, December.
    6. repec:cup:apsrev:v:67:y:1973:i:02:p:490-498_14 is not listed on IDEAS
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    More about this item

    Keywords

    median voter theorem; partisanship; state government; taxation; expenditure; welfare; crime; growth;

    JEL classification:

    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • D78 - Microeconomics - - Analysis of Collective Decision-Making - - - Positive Analysis of Policy Formulation and Implementation
    • H71 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Taxation, Subsidies, and Revenue
    • H72 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Budget and Expenditures
    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs

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