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Political competition, policy and growth: theory and evidence from the US

Besley, Timothy, Persson, Torsten and Sturm, Daniel M. (2010) Political competition, policy and growth: theory and evidence from the US. Review of Economic Studies, 77 (4). pp. 1329-1352. ISSN 0034-6527

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Abstract

This paper develops a simple model to analyse how a lack of political competition may lead to policies that hinder economic growth. We test the predictions of the model on panel data for the US states. In these data, we find robust evidence that lack of political competition in a state is associated with anti-growth policies: higher taxes, lower capital spending, and a reduced likelihood of using right-to-work laws. We also document a strong link between low political competition and low income growth.

Item Type: Article
Official URL: http://www.restud.com/
Additional Information: © 2010 The Review of Economic Studies Limited
Library of Congress subject classification: H Social Sciences > HB Economic Theory
J Political Science > JC Political theory
Journal of Economic Literature Classification System: H - Public Economics > H1 - Structure and Scope of Government > H11 - Structure, Scope, and Performance of Government
Sets: Departments > Economics
Collections > Economists Online
Research centres and groups > Suntory and Toyota International Centres for Economics and Related Disciplines (STICERD)
Rights: http://www.lse.ac.uk/library/usingTheLibrary/academicSupport/OA/depositYourResearch.aspx
Date Deposited: 30 Mar 2011 15:05
URL: http://eprints.lse.ac.uk/33765/

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