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Allocating the US federal budget to the states: the impact of the President

Larcinese, Valentino, Rizzo, Leonzio and Testa, Cecilia (2005) Allocating the US federal budget to the states: the impact of the President. PEPP/3. Suntory and Toyota International Centres for Economics and Related Disciplines, London School of Economics and Poltical Science, London, UK.

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Abstract

This paper provides new evidence on the determinants of the US federal budget allocation to the states. Departing from the existing literature that gives prominence to Congress, we carry on an empirical investigation on the impact of Presidents during the period 1982-2000. Our findings suggest that the distribution of federal outlays to the States is affected by presidential politics. First, presidential elections matter. States that heavily supported the incumbent President in past presidential elections tend to receive more funds, while marginal and swing states are not rewarded. Second, party affiliation also plays an important role since states whose governor has the same political affiliation of the President receive more federal funds, while states opposing the president's party in Congressional elections are penalized. These results show that presidents are engaged in tactical distribution of federal funds and also provide good evidence in support of partisan theories of budget allocation.

Item Type: Monograph (Discussion Paper)
Official URL: http://sticerd.lse.ac.uk/
Additional Information: © 2005 The authors
Library of Congress subject classification: J Political Science > JK Political institutions (United States)
H Social Sciences > HJ Public Finance
Journal of Economic Literature Classification System: H - Public Economics > H6 - National Budget, Deficit, and Debt > H61 - Budget; Budget Systems
D - Microeconomics > D7 - Analysis of Collective Decision-Making > D72 - Economic Models of Political Processes: Rent-Seeking, Elections, Legislatures, and Voting Behavior
H - Public Economics > H7 - State and Local Government; Intergovernmental Relations > H70 - General
Sets: Departments > Government
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
Identification Number: PEPP/3
Date Deposited: 28 Feb 2008
URL: http://eprints.lse.ac.uk/3611/

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