The Political Determinants of Federal Expenditure at the State Level

It has been shown that states with higher per capita senate representation have higher federal spending per capita (Atlas, C. M., Gilligan, T. A., Hendershott, R. J. and Zupan, M. A. (1995). American Economic Review 85: 624–629). With a more recent data sample, more highly disaggregated data and a different set of political control variables, we are able to confirm the main result of Atlas et al. that per capita senate representation is positively related to federal expenditure. This effect is strongest for procurement expenditures. By contrast, we do not find support for their result that spending increases with per capita representation in the House of Representatives. Several other political variables are found to be significant in a subset of the expenditure equations.     

The Impact of State Debt Management on Debt Activity

This article addresses the impact that state debt management has on the debt activity of a state debt program. A quantitative measure of state debt management is developed and used in analysis of state debt activity. The study finds that states with decentralized debt management issue more long-term debt as compared to states with other forms of debt management. The study also investigates the impact other institutional variables have on state debt activity and highlights the interaction effects of these variables with the institutional debt management variable. The study finds that the effects of previously tested variables such as the number of public authorities and constitutional debt limitations on debt activity are altered if the form of debt management is considered.     

Determinants of State Economic Perceptions

Despite a greatly increased emphasis on state economic development, citizens' perceptions of state economic conditions have been infrequently studied, leaving a serious question as to how well citizens distinguish between national and state economic performance. We investigate the sources of state economic perceptions using data from 1990 Voter Research and Surveys exit polls of 23 states along with measures of state economic conditions. We find strong support for the proposition that perceptions of state and national economies are distinct phenomena. We also find that state economic perceptions are well grounded in economic reality—that is, in the conditions of the state economy. Finally, we show that state economic perceptions are based on a variety of indicators, including measures that have not heretofore been included in models of economic voting.     

An Approach to Measuring the Affordability of State Debt

Affordability is one important and widely accepted element of state and local debt policy. However, there is no well-established measure of affordability and no clear standard for making normative judgments about what amount of debt is affordable for a specific jurisdiction. This article suggests a six-step method for measuring affordability of state debt that provides a useful guideline for determining when a state may be entering a "danger zone" by having debt that exceeds norms of affordability.     

State Government Expenditure Determinants and Tax Revenue Determinants Revisited

The primary aim of the research was to test the general hypothesis that many institutional and political variables affect fiscal outcomes; that the preferences of public officials, and the decision processes used to act on those preferences, matter. State government data (state only, not state and local) from 1980, 1985, and 1990 were used to specify state tax revenue and expenditure models. A previous (Merrifield, 1991) state tax revenue model identified many significant institutional and political variables, but it was based only on 1985 data (49 observations). The larger data set (147 observations), including better data for some of the variables, indicated that most of Merrifield's (1991) findings are robust. The state expenditure models facilitated a second test of the general institutional and political variable hypothesis, as well as the hypotheses about specific variables. The expenditure model also facilitated comparisons of expenditure and tax determinants, and comparisons with results published in the literature. Though there are some noteworthy differences between the expenditure and tax models, the expenditure models also supported many of the institutional and political variable hypotheses.     

Corruption and State and Local Government Debt Expansion

Theories describing rent seeking in the public sector posit a number of negative fiscal outcomes that the choices of corrupt officials may generate. The evidence presented in this article shows that states with greater intensities of public corruption have higher aggregate levels of state and local debt. If corruption in the 10 most corrupt states were only at an average level, their public debt would be 9 percent lower, or about $249.35 per capita, all else being equal. Notably, institutional control measures may not have succeeded in restraining the expansion of state and local public debt in the presence of greater levels of corruption. State and local governments would achieve more efficient levels of fiscal discipline by curbing public sector corruption.     

State Debt Management Policy: A National Survey

The amount of outstanding, long-term, tax-exempt state debt has grown precipitously over the last decade, from $87 billion in 1977 to $264 billion in 1987. But there have been few attempts to carry out broad studies of basic state debt management policies, using comparative state data. As a result, policy-makers lack guidance as they attempt to adjust policies and procedures to meet the rapidly evolving requirements associated with public borrowing. This paper reports on a national survey of state debt manage ment policies - policies devoted to the planning, preparation, sale, and repayment of debt for which states consider themselves responsible.     

Politico-Economic Determinants of Public Debt Growth: A Case Study for Austria

Based on a number of economic andparticularly politico-economic arguments,we examine the reasons for the growth ofthe central government's debt in Austriausing time series data for the period 1960 to 1999. Starting with an empiricaltest of Bohn's theory of sustainability offiscal policy, which is based on Barro'stax-smoothing model, we extend the model toaccount for several politico-economicvariables suggested by public choicetheories. Keynesian stabilization policyobjectives, influences of ideology andpolitical parties, the form of governmentand the political business cycle are testedregarding their ability to explain thegrowth of public debt in Austria. There issome empirical evidence for systematicinfluence of government behavior inaccordance with recent public choicetheories. However, it seems that the mostimportant influence on Austrian fiscalpolicy is the unemployment rate, which has asignificant influence on the decisions madeby policy-makers. Concluding, we brieflydiscuss the implications of these resultsfor the prospects of reducing public debtin Austria in the near future.     

The Impact of State Policies to Limit Debt Financing

State policies intended to limit debt financing, either by requiringa balanced budget or by establishing constitutional limitationson debt, have been adopted in many states. A nalysis revealsthat stricter constitutional debt limitations are associatedwith lower levels of full faith and credit debt but show littlerelationship to overall state debt.     

State Debt Limits: How Many Are Enough?

There is a growing concern among state policy makers that unrestrained debt may exceed politically acceptable or financially sustainable levels of debt. Many states have established limits to restrict debt, but many of these limits are circumvented through issuing more complex and specialized bonds. In this article, we focus on the use of debt limits as an instrument to manage a state's debt in context of two key questions: (1) under what circumstances should a state consider multiple debt limits and (2) if multiple limits are established, what factors should be considered in setting such multiple limits. In addressing these issues, we consider the theoretical and conceptual issues associated with setting debt limits, we highlight current state debt limit policies, and discuss factors that appear to be influencing decisions to establish and set multiple limits.     

State Social Services Contracting: Exploring the Determinants of Effective Contract Accountability

This article examines the effectiveness of contract accountability in social service contracts. The analysis is based on five case studies of Kansas contracts for selected welfare, Medicaid, and foster care and adoption services. Results indicate the state has achieved moderate to high levels of accountability effectiveness, especially in terms of specifying social service contracts and selecting appropriate accountability strategies. However, accountability is undermined by the use of risk shifting, reliance on a system of multiple competing providers, and the adoption of new information technologies. These conclusions contradict the conventional wisdom, theory, and existing research on contracting.     

The Determinants of State Budget Periodicity: An Empirical Analysis

States budget for a one-year or a two-year period. Little attention has been paid to the determinants of budget periodicity decisions at the state level. This article relies on existing surveys to develop hypotheses for the factors that influence the periodicity decision at the state level. The hypotheses are tested using a sample of 300 observations of the fifty states at various times in recent history. The results suggest that overall expenditures, budget complexity, political culture, revenue variability, and frequency of legislative session are statistically significant factors in the determination of budget periodicity.     

Cognitive and Normative Determinants of State Policymaking Behavior: Lessons from the Sociological Institutionalism

Although comparative state policy frameworks consider the roleof societal norms, few account for cognitive and normative imperativesthat originate outside a state's boundaries and are specificto promoting or impeding the adoption of particular policies.One approach that does so is the new institutionalism in sociology,which emphasizes legitimacy-seeking actors who face pressuresto conform to cultural rules, norms, and expectations, regardlessof outcomes. This article introduces comparative state policyresearchers to the sociological institutionalism, emphasizingbasic concepts and arguments and suggesting how reliance onthis framework can enable researchers to better integrate rational-actorand cultural-based views for understanding why states chooseparticular public policies. Interviews with national and stateexperts in Medicaid nursing-facility reimbursement illustratethe utility of the sociological institutionalism for comparativestate policy research.     

Debt,Corruption, and State Identity: Lessons from Eighteenth-Century Political Thought

The subject of national debt raises serious questions concerning state identity. Should a state that has radically altered its constitution be responsible for decisions taken by the previous state? Much hangs on how we characterize the state as a continuous agent. This article explores debates over national debt, state integrity, and corruption in the eighteenth century, the era in which the modern financial-bureaucratic state was in its infancy. Many eighteenth-century writers treated national debt as corrupting; some advocated voluntary default as a manner of laying low the insidious “moneyed interests” usurping political power. But if public debt was attacked by some as the soul of corruption, others saw it as something that had been made possible by—and was a guarantor of—integrity. These controversies reveal a clash of visions of what constitutes state integrity. This same clash is alive in contemporary debates about national debts.     

Using Panel Data to Determine the Effect of the Americans with Disabilities Act on Per‐Student Public Education Expenditures at the State Level

The purpose of the present study is to determine whether passage of the American with Disabilities Act (ADA) in 1990 resulted in a statistically significant increase in per‐student public education expenditures at the state level. Although numerous studies have estimated educational cost functions, no prior study has examined the impact of the ADA on per capita education spending. The results of the present study are consistent with anecdotal evidence in that enactment of the ADA has had a positive effect on per‐student educational expenditures; this result suggests that legislative mandates may lead to increased government spending. In addition to the ADA, several of the leading determinants of per‐student education spending include population density, per capita income, percentage of the state that is over the age of 65, percentage of state's residents who have a four‐year college degree, percentage of state's residents who are homeowners, and total student population.     

Determinants of Firm‐Level Lobbying and Government Responsiveness in Agricultural Biotechnology in China

Understanding what stimulates agribusiness firms to lobby the government and what makes the government responsive to lobbying are the two issues that have been discussed extensively in the debates concerning determinants of biotechnology policy. This paper examines the factors influencing agribusiness firms' lobbying and government response using econometric modeling on a new data set of 160 leading agribusiness firms in the food, feed, chemical, and seed industries in China. The results show that approximately 10% of agribusiness firms lobbied the government about biotechnology policy and regulations and over half of those that lobbied received a verbal or written acknowledgment from government agencies. Seed and feed companies are more likely to engage in lobbying than chemical companies. Owning GM patents not only has a positive impact on firms' lobbying activities, but firms with these patents are more likely to receive a government response to their lobbying efforts. The experience of selling GM products does not significantly influence lobbying activities or response from the government.