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Political Competition and Economic Performance: Theory and Evidence from the United States

  • Besley, Timothy J.
  • Persson, Torsten
  • Sturm, Daniel M

One of the most cherished propositions in economics is that market competition by and large raises consumer welfare. But whether political competition has similarly virtuous consequences is far less discussed. This paper formulates a model to explain why political competition may enhance economic performance and uses the United States as a testing ground for the model's implications. It finds statistically robust evidence that political competition has quantitatively important effects on state income growth, state policies, and the quality of Governors.

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Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 5138.

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Date of creation: Jul 2005
Date of revision:
Handle: RePEc:cpr:ceprdp:5138
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  1. Besley, Timothy J. & Case, Anne, 2002. "Political Institutions and Policy Choices: Evidence from the United States," CEPR Discussion Papers 3498, C.E.P.R. Discussion Papers.
  2. Francesco Caselli & Gerardo Esquivel & Fernando Lefort, 1997. "Reopening the Convergence Debate: A New Look at Cross-Country Growth Empirics," Working Papers Central Bank of Chile 03, Central Bank of Chile.
  3. Michele Polo, . "Electoral competition and political rents," Working Papers 144, IGIER (Innocenzo Gasparini Institute for Economic Research), Bocconi University.
  4. Wright, Gavin, 1987. "The Economic Revolution in the American South," Journal of Economic Perspectives, American Economic Association, vol. 1(1), pages 161-78, Summer.
  5. Caselli, Francesco & Morelli, Massimo, 2000. "Bad Politicians," CEPR Discussion Papers 2402, C.E.P.R. Discussion Papers.
  6. repec:oup:qjecon:v:112:y:1997:i:1:p:85-114 is not listed on IDEAS
  7. Wittman, Donald, 1989. "Why Democracies Produce Efficient Results," Journal of Political Economy, University of Chicago Press, vol. 97(6), pages 1395-1424, December.
  8. repec:tpr:qjecon:v:118:y:2003:i:4:p:1169-1208 is not listed on IDEAS
  9. George Stigler, 1972. "Economic competition and political competition," Public Choice, Springer, vol. 13(1), pages 91-106, September.
  10. Persson, Torsten & Tabellini, Guido, 1997. "Political Economics and Macroeconomic Policy," CEPR Discussion Papers 1759, C.E.P.R. Discussion Papers.
  11. John J. Donohue III & James Heckman, 1991. "Continuous Versus Episodic Change: The Impact of Civil Rights Policy on the Economic Status of Blacks," NBER Working Papers 3894, National Bureau of Economic Research, Inc.
  12. Bertrand, Marianne & Schoar, Antoinette, 2003. "Managing With Style: The Effect of Managers on Firm Policies," Working papers 4280-02, Massachusetts Institute of Technology (MIT), Sloan School of Management.
  13. Husted, Thomas A & Kenny, Lawrence W, 1997. "The Effect of the Expansion of the Voting Franchise on the Size of Government," Journal of Political Economy, University of Chicago Press, vol. 105(1), pages 54-82, February.
  14. Wright, Gavin, 1999. "The Civil Rights Revolution as Economic History," The Journal of Economic History, Cambridge University Press, vol. 59(02), pages 267-289, June.
  15. repec:oup:qjecon:v:111:y:1996:i:1:p:65-96 is not listed on IDEAS
  16. repec:oup:restud:v:63:y:1996:i:2:p:301-29 is not listed on IDEAS
  17. repec:oup:qjecon:v:118:y:2003:i:4:p:1169-1208 is not listed on IDEAS
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