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Why do small states receive more federal money?: U.S. Senate representation and the allocation of federal budget

Larcinese, Valentino, Rizzo, Leonzio and Testa, Cecilia (2013) Why do small states receive more federal money?: U.S. Senate representation and the allocation of federal budget. Economics and Politics, 25 (3). pp. 257-282. ISSN 0954-1985

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Identification Number: 10.1111/ecpo.12012


Empirical research on the geographic distribution of U.S. federal spending shows that small states receive disproportionately more dollars per capita. This evidence, often regarded as the consequence of Senate malapportionment, in reality conflates the effects of state population size with that of state population growth. Analyzing outlays for the period 1978-2002, this study shows that properly controlling for population dynamics provides more reasonable estimates of small-state advantage and solves a number of puzzling peculiarities of previous research. We also show that states with fast-growing population loose federal spending to the advantage of slow-growing ones independently of whether they are large or small. The two population effects vary substantially across spending programs. Small states enjoy some advantage in defense spending, whereas fast-growing ones are penalized in the allocation of federal grants, particularly those administered by formulas limiting budgetary adjustments. Hence, a large part of the inverse relationship between spending and population appears to be driven by mechanisms of budgetary inertia, which are compatible with incrementalist theories of budget allocation.

Item Type: Article
Official URL:
Additional Information: © 2013 John Wiley & Sons Ltd.
Divisions: Government
Subjects: H Social Sciences > HJ Public Finance
J Political Science > JK Political institutions (United States)
Sets: Departments > Government
Research centres and groups > Suntory and Toyota International Centres for Economics and Related Disciplines (STICERD)
Date Deposited: 19 Jun 2013 13:59
Last Modified: 20 Sep 2021 01:45

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