Government Ideology and Economic Policy-Making in the United States

65 Pages Posted: 29 May 2017

See all articles by Niklas Potrafke

Niklas Potrafke

CESifo (Center for Economic Studies and Ifo Institute) - Ifo Institute

Date Written: April 25, 2017

Abstract

This paper describes the role of government ideology on economic policy-making in the United States. I consider studies using data for the national, state and local level and elaborate on checks and balances, especially divided government, measurement of government ideology and empirical strategies to identify causal effects. Many studies conclude that parties do matter in the United States. Democratic presidents generate, for example, higher economic growth than Republican presidents, but these studies using data for the national level do not derive causal effects. Ideology-induced policies are prevalent at the state level: Democratic governors implement somewhat more expansionary and liberal policies than Republican governors. At the local level, government ideology hardly influences economic policymaking. How increasing political polarization and demographic change will influence the role of government ideology on economic policy-making will be an important issue for future research.

Keywords: government ideology, economic policy-making, partisan politics, United States, Democrats, Republicans, political polarization, causal effects

JEL Classification: D720, E600, H000, N120, N420, P160

Suggested Citation

Potrafke, Niklas, Government Ideology and Economic Policy-Making in the United States (April 25, 2017). CESifo Working Paper Series No. 6444, Available at SSRN: https://ssrn.com/abstract=2976300

Niklas Potrafke (Contact Author)

CESifo (Center for Economic Studies and Ifo Institute) - Ifo Institute ( email )

Poschinger Str. 5
Munich, 01069
Germany

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