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The size and scope of government in the US states: Does party ideology matter?

  • Bjørnskov, Christian
  • Potrafke, Niklas

We investigate empirically how party ideology influences size and scope of government as measured by the size of government, tax structure and labor market regulation. Our dataset comprises 49 US states over the 1993-2009 period. We employ the new data on the ideological mapping of US legislatures by Shor and McCarty (Am. Polit. Sci. Rev. 105(3):530-551, 2011) that considers spatial and temporal differences in Democratic and Republican Party ideology. We distinguish between three types of divided government: overall divided government, proposal division and approval division. The main result suggests that Republican governors have been more active in deregulating labor markets. We find that ideology-induced policies were counteracted under overall divided government and proposal division.

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Paper provided by University of Munich, Department of Economics in its series Munich Reprints in Economics with number 20275.

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Date of creation: 2013
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Publication status: Published in International Tax and Public Finance 4 20(2013): pp. 687-714
Handle: RePEc:lmu:muenar:20275
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