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Parties, divided government, and infrastructure expenditures: Evidence from US states

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  • Buchheim, Lukas
  • Fretz, Stephan

Abstract

This paper examines the impact of parties and divided government on infrastructure expenditures for transportation, education, and social services in U.S. states. As infrastructure expenditures are considered a bi-partisan priority, we hypothesize that divided governments expand infrastructure spending compared to governments under true Democratic or Republican control. We test this hypothesis using U.S. state-level data over the period 1970 to 2008 and find that divided governments indeed increase expenditures for these budget categories. Specifically, divided governments spend more on transportation than unified Democratic governments, and more on education and social services than unified Republican governments. The effect is most pronounced for the core infrastructure of transportation and even stronger when only looking at capital outlays instead of total expenditures.

Suggested Citation

  • Buchheim, Lukas & Fretz, Stephan, 2020. "Parties, divided government, and infrastructure expenditures: Evidence from US states," Munich Reprints in Economics 84726, University of Munich, Department of Economics.
    • Handle: RePEc:lmu:muenar:84726
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    Cited by:

    1. Hellwig, Michael & Polk, Andreas, 2021. "Do political links influence water prices? Determinants of water prices in Germany," Utilities Policy, Elsevier, vol. 70(C).

    More about this item

    JEL classification:

    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
    • H72 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Budget and Expenditures

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