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Government Ideology and Economic Policy-Making in the United States

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  • Niklas Potrafke

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Abstract

This paper describes the role of government ideology on economic policy-making in the United States. I consider studies using data for the national, state and local level and elaborate on checks and balances, especially divided government, measurement of government ideology and empirical strategies to identify causal effects. Many studies conclude that parties do matter in the United States. Democratic presidents generate, for example, higher economic growth than Republican presidents, but these studies using data for the national level do not derive causal effects. Ideology-induced policies are prevalent at the state level: Democratic governors implement somewhat more expansionary and liberal policies than Republican governors. At the local level, government ideology hardly influences economic policymaking. How increasing political polarization and demographic change will influence the role of government ideology on economic policy-making will be an important issue for future research.

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  • Niklas Potrafke, 2017. "Government Ideology and Economic Policy-Making in the United States," CESifo Working Paper Series 6444, CESifo Group Munich.
  • Handle: RePEc:ces:ceswps:_6444
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    Cited by:

    1. Kauder, Björn & Potrafke, Niklas & Ursprung, Heinrich, 2018. "Behavioral determinants of proclaimed support for environment protection policies," European Journal of Political Economy, Elsevier, vol. 54(C), pages 26-41.
    2. repec:eee:poleco:v:55:y:2018:i:c:p:65-96 is not listed on IDEAS
    3. Florian Dorn & Christoph Schinke, 2018. "Top income shares in OECD countries: The role of government ideology and globalisation," The World Economy, Wiley Blackwell, vol. 41(9), pages 2491-2527, September.
    4. repec:mhr:finarc:urn:doi:10.1628/fa-2019-0014 is not listed on IDEAS
    5. Manuela Krause & Niklas Potrafke, 2019. "The Real Estate Transfer Tax and Government Ideology: Evidence from the German States," FinanzArchiv: Public Finance Analysis, Mohr Siebeck, Tübingen, vol. 0, pages 1-21.
    6. Keita, Sekou & Mandon, Pierre, 2018. "Give a fish or teach fishing? Partisan affiliation of U.S. governors and the poverty status of immigrants," European Journal of Political Economy, Elsevier, vol. 55(C), pages 65-96.
    7. Dodge Cahan & Niklas Potrafke, 2017. "The Democratic-Republican Presidential Growth Gap and the Partisan Balance of the State Governments," CESifo Working Paper Series 6517, CESifo Group Munich.

    More about this item

    Keywords

    government ideology; economic policy-making; partisan politics; United States; Democrats; Republicans; political polarization; causal effects;

    JEL classification:

    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • E60 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - General
    • H00 - Public Economics - - General - - - General
    • N12 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations - - - U.S.; Canada: 1913-
    • N42 - Economic History - - Government, War, Law, International Relations, and Regulation - - - U.S.; Canada: 1913-
    • P16 - Economic Systems - - Capitalist Systems - - - Political Economy of Capitalism

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