Parties,divided government,and infrastructure expenditures: Evidence from U.S. states |
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| Institution: | 1. LMU Munich, Schackstr. 4, 80539, Munich, Germany;2. Swissgrid, Neudörfli 10, 5603, Staufen, Switzerland;1. Louisiana State University and NBER, USA;2. Hasselt University, Belgium;1. Max Planck Institute for Tax Law and Public Finance, Marstallplatz 1, D-80539, Munich, Germany;2. University of Munich, Germany;3. CESifo, Germany;4. Sydney University Law School, Australia;1. Department of Economics, University of Alabama, Tuscaloosa, AL 35487, USA;2. Economic Science Institute, Chapman University One University Drive, Orange, CA 92866, USA;3. Weatherhead School of Management, Case Western Reserve University, 11119 Bellflower Road, Cleveland, OH 44106, USA;1. University of Bologna, Department of Economics, Italy;2. CESifo, Germany;3. IZA, Germany;4. CHILD-CCA, USA |
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| 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. |
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| Keywords: | Infrastructure Public expenditures Partisanship Divided government Political competition H41 H72 |
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