Military Experience and Political Cronyism

Abstract

Using a hand-coded dataset tracking the backgrounds of U.S. governors between 1993 and 2021, we argue that officeholders with military experience are less likely to engage in political cronyism. Military governors are less likely to increase subsidies to corporations when they become “lame ducks” (i.e., ineligible to run for another term). They are also less likely to favor companies with the same political affiliation during their lame duck phase. Given the exogenous constitutional variation in term limits between states and governors, these effects are credibly causal. Electoral incentives and the personal characteristics of officeholders thus influence firm-state relations.

Keywords: Subsidies, Firm-State Relations, Military Veterans, Governors, Federalism

JEL Classification: G32, G38, D73, K23, K42