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Divided We Reform? Evidence from US Welfare Policies

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  • Andreas Bernecker

Abstract

Divided government is often thought of as causing legislative deadlock. I investigate the link between divided government and economic reforms using a novel data set on welfare reforms in US states between 1978 and 2010. Panel data regressions show that under divided government a US state is around 25% more likely to adopt a welfare reform than under unified government. An analysis of close elections providing quasi-random variation in the form of government and other robustness checks confirm this counter-intuitive finding. The empirical evidence is consistent with an explanation based on policy competition between governor, senate, and house.

Suggested Citation

  • Andreas Bernecker, 2014. "Divided We Reform? Evidence from US Welfare Policies," CESifo Working Paper Series 4564, CESifo.
    • Handle: RePEc:ces:ceswps:_4564
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    Cited by:

    1. Andreas Bernecker, 2015. "Divided Government and the Adoption of Economic Reforms," ifo DICE Report, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 12(04), pages 47-52, January.
    2. repec:ces:ifodic:v:12:y:2015:i:4:p:19149990 is not listed on IDEAS
    3. Fabella, Vigile Marie, 2017. "Political-economic determinants of education reform: Evidence on interest groups and student outcomes," European Journal of Political Economy, Elsevier, vol. 48(C), pages 144-161.
    4. Andreas Bernecker, 2015. "Divided Government and the Adoption of Economic Reforms," ifo DICE Report, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 12(4), pages 47-52, 01.

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    Keywords

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    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
    • H11 - Public Economics - - Structure and Scope of Government - - - Structure and Scope of Government
    • H75 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Government: Health, Education, and Welfare

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