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Do Small States Get More Federal Monies? Myth and Reality about the US Senate Malapportionment

Author

Listed:
  • Valentino Larcinese

    (London School of Economics and STICERD)

  • Leonzio Rizzo

    (University of Ferrara and Catholic University, Milan)

  • Cecilia Testa

    () (Department of Economics, Royal Holloway, University of London)

Abstract

We analyze the relationship between senate malapportionment and the allocation of the US federal budget to the states during the period 1978-2002. A substantial literature originating from the influential paper by Atlas et al (1995, using a within estimation methodology finds that small and overrepresented states get significantly larger shares of federal funds. Revisiting the econometric specification used by the current empirical research, we show that the number of senators percapita is inappropriate to capture malapportionement in regressions using broad federal programs, and that the results obtained with this indicator are extremely non-robust to reasonable specification changes. In particular, senators percapita have a significant impact on federal spending only in regressions containing state fixed effects. Furthermore, the coefficients estimated using the within methodology are statistically different across states and, therefore, cannot be used to assess spending differentials between states. The magnitude and significance of those coefficients suggest a within state-specific inverse relationship between broad spending categories and population which is not systematically related to the size of the states and seems more compatible with incrementalist theories of budget allocation.

Suggested Citation

  • Valentino Larcinese & Leonzio Rizzo & Cecilia Testa, 2007. "Do Small States Get More Federal Monies? Myth and Reality about the US Senate Malapportionment," Royal Holloway, University of London: Discussion Papers in Economics 07/01, Department of Economics, Royal Holloway University of London, revised May 2007.
  • Handle: RePEc:hol:holodi:0701
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    References listed on IDEAS

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    1. Wright, Gavin, 1974. "The Political Economy of New Deal Spending: An Econometric Analysis," The Review of Economics and Statistics, MIT Press, vol. 56(1), pages 30-38, February.
    2. repec:cup:apsrev:v:97:y:2003:i:03:p:471-481_00 is not listed on IDEAS
    3. Hauk, William R. & Wacziarg, Romain, 2007. "Small States, Big Pork," Quarterly Journal of Political Science, now publishers, vol. 2(1), pages 95-106, March.
    4. repec:cup:apsrev:v:60:y:1966:i:03:p:529-547_13 is not listed on IDEAS
    5. Wallis, John Joseph, 1998. "The Political Economy of New Deal Spending Revisited, Again: With and without Nevada," Explorations in Economic History, Elsevier, vol. 35(2), pages 140-170, April.
    6. Gary Hoover & Paul Pecorino, 2005. "The Political Determinants of Federal Expenditure at the State Level," Public Choice, Springer, vol. 123(1), pages 95-113, April.
    7. Robert A. Moffitt, 2003. "Means-Tested Transfer Programs in the United States," NBER Books, National Bureau of Economic Research, Inc, number moff03-1, April.
    8. Valentino Larcinese & Leonzio Rizzo & Cecilia Testa, 2005. "Allocating the US Federal Budget to the States: the Impact of the President," STICERD - Political Economy and Public Policy Paper Series 03, Suntory and Toyota International Centres for Economics and Related Disciplines, LSE.
    9. Brian Knight, 2004. "Legislative Representation, Bargaining Power, and the Distribution of Federal Funds: Evidence from the U.S. Senate," NBER Working Papers 10385, National Bureau of Economic Research, Inc.
    10. Brian Knight, 2005. "Estimating the Value of Proposal Power," American Economic Review, American Economic Association, vol. 95(5), pages 1639-1652, December.
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    12. Atlas, Cary M, et al, 1995. "Slicing the Federal Government Net Spending Pie: Who Wins, Who Loses, and Why," American Economic Review, American Economic Association, vol. 85(3), pages 624-629, June.
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    Cited by:

    1. Albert Solé-Ollé, 2013. "Inter-regional redistribution through infrastructure investment: tactical or programmatic?," Public Choice, Springer, vol. 156(1), pages 229-252, July.
    2. Valentino Larcinese & Leonzio Rizzo & Cecilia Testa, 2013. "Changing Needs, Sticky Budget: Evidence From the Geographic Distribution of U.S. Federal Grants," National Tax Journal, National Tax Association;National Tax Journal, vol. 66(2), pages 311-342, June.

    More about this item

    Keywords

    federal budget; malapportionment; small state advantage; overrepresentation;

    JEL classification:

    • H60 - Public Economics - - National Budget, Deficit, and Debt - - - General
    • H61 - Public Economics - - National Budget, Deficit, and Debt - - - Budget; Budget Systems
    • H77 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Intergovernmental Relations; Federalism

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