The Role of Electoral Incentives for Policy Innovation: Evidence from the U.S. Welfare Reform

60 Pages Posted: 30 May 2018

See all articles by Andreas Bernecker

Andreas Bernecker

University of Mannheim - Department of Economics

Pierre Boyer

Ecole Polytechnique, Palaiseau - Department of Economics; CESifo (Center for Economic Studies and Ifo Institute)

Christina Gathmann

Alfred-Weber Institut; IZA Institute of Labor Economics; CESifo (Center for Economic Studies and Ifo Institute)

Date Written: April 09, 2018

Abstract

We investigate whether the decision to experiment with novel policies is influenced by electoral incentives. Our empirical setting is the U.S. welfare reform in 1996, which marked the most dramatic shift in social policy since the New Deal. We find that electoral incentives matter: governors with strong electoral support are less likely to experiment with policies than governors with little electoral support. Yet, governors who cannot be reelected experiment more than governors striving for reelection. The importance of electoral incentives is robust to controlling for governor ideology, voter preferences for redistribution, the influence of the legislature, or for learning among states. A comparison of the role of governor ideology and electoral incentives reveals that both contribute about equally to policy experimentation.

Keywords: policy innovation, electoral incentives, welfare reform, spillovers

JEL Classification: D720, D780, H750

Suggested Citation

Bernecker, Andreas and Boyer, Pierre C. and Gathmann, Christina, The Role of Electoral Incentives for Policy Innovation: Evidence from the U.S. Welfare Reform (April 09, 2018). CESifo Working Paper Series No. 6964. Available at SSRN: https://ssrn.com/abstract=3185973

Andreas Bernecker

University of Mannheim - Department of Economics ( email )

D-68131 Mannheim
Germany

Pierre C. Boyer

Ecole Polytechnique, Palaiseau - Department of Economics ( email )

Route de Saclay
Palaiseau, 91120
France

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

Poschinger Str. 5
Munich, DE-81679
Germany

Christina Gathmann (Contact Author)

Alfred-Weber Institut ( email )

Bergheimer Str. 20
Heidelberg, 69115
Germany

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

HOME PAGE: http://www.iza.org/index_html?lang=en&mainframe=http%3A//www.iza.org/en/webcontent/personnel/photos%

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

Poschinger Str. 5
Munich, DE-81679
Germany

HOME PAGE: http://www.stanford.edu/~cgathman

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