Allocating the Us Federal Budget to the States: The Impact of the President

STICERD Discussion Papers in Political Economy and Public Policy No. 3

31 Pages Posted: 3 Jun 2005

See all articles by Valentino Larcinese

Valentino Larcinese

London School of Economics & Political Science (LSE)

Leonzio Rizzo

University of Ferrara - Faculty of Economics

Cecilia Testa

University of London, Royal Holloway College - Department of Economics

Multiple version iconThere are 2 versions of this paper

Date Written: June 2005

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.

Keywords: Federal Budget, Pork-Barrell, President, Congress, Political Parties, Committees, American Elections

JEL Classification: D72, H5

Suggested Citation

Larcinese, Valentino and Rizzo, Leonzio and Testa, Cecilia, Allocating the Us Federal Budget to the States: The Impact of the President (June 2005). STICERD Discussion Papers in Political Economy and Public Policy No. 3, Available at SSRN: https://ssrn.com/abstract=734265 or http://dx.doi.org/10.2139/ssrn.734265

Valentino Larcinese (Contact Author)

London School of Economics & Political Science (LSE) ( email )

Houghton Street
London, WC2A 2AE
United Kingdom

Leonzio Rizzo

University of Ferrara - Faculty of Economics ( email )

C.so Ercole I° d'Este 37
Ferrara, 44100
Italy

Cecilia Testa

University of London, Royal Holloway College - Department of Economics ( email )

Royal Holloway College
Egham
Surrey, Surrey TW20 0EX
United Kingdom