Why Do Small States Receive More Federal Money? U.S. Senate Representation and the Allocation of Federal Budget

Why Do Small States Receive More Federal Money? U.S. Senate Representation and the Allocation of Federal Budget
Author: Valentino Larcinese
Publisher:
Total Pages: 0
Release: 2013
Genre:
ISBN:

Empirical research on the geographic distribution of U.S. federal spending shows that small states receive disproportionately more dollars per capita. This evidence, often regarded as the consequence of Senate malapportionment, in reality conflates the effects of state population size with that of state population growth. Analyzing outlays for the period 1978-2002, this study shows that properly controlling for population dynamics provides more reasonable estimates of small-state advantage and solves a number of puzzling peculiarities of previous research. We also show that states with fast-growing population loose federal spending to the advantage of slow-growing ones independently of whether they are large or small. The two population effects vary substantially across spending programs. Small states enjoy some advantage in defense spending, whereas fast-growing ones are penalized in the allocation of federal grants, particularly those administered by formulas limiting budgetary adjustments. Hence, a large part of the inverse relationship between spending and population appears to be driven by mechanisms of budgetary inertia, which are compatible with incrementalist theories of budget allocation.

Sizing Up the Senate

Sizing Up the Senate
Author: Frances E. Lee
Publisher: University of Chicago Press
Total Pages: 328
Release: 1999-10
Genre: Political Science
ISBN: 9780226470061

This book raises questions about one of the key institutions of American government, the United States Senate, and should be of interest to anyone concerned with issues of representation.

Legislative Representation, Bargaining Power, and the Distribution of Federal Funds

Legislative Representation, Bargaining Power, and the Distribution of Federal Funds
Author: Brian Knight
Publisher:
Total Pages: 0
Release: 2004
Genre: Intergovernmental fiscal relations
ISBN:

While representation in the U.S. House is based upon state population, each state has an equal number (two) of U.S. Senators. Thus, relative to the state delegations in the U.S. House, small population states are provided disproportionate bargaining power in the U.S. Senate. This paper provides new evidence on the role of this small state bargaining power in the distribution of federal funds using data on projects earmarked in appropriations bills between 1995 and 2003. Relative to earmarks secured in House appropriations bills, Senate earmarks exhibit a small state advantage that is both economically and statistically significant. The paper also examines two theoretically-motivated channels through which this small state advantage operates: increased proposal power through appropriations committee representation and the lower cost of securing votes due to smaller federal tax shares. Taken together, these two channels explain over 80 percent of the measured small state bias. Finally, a welfare analysis demonstrates the inefficiency of hte measured small state bias.

Allocating the US Federal Budget to the States

Allocating the US Federal Budget to the States
Author: Valentino Larcinese
Publisher:
Total Pages: 37
Release: 2008
Genre:
ISBN:

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.

The Federalist Papers

The Federalist Papers
Author: Alexander Hamilton
Publisher: Read Books Ltd
Total Pages: 420
Release: 2018-08-20
Genre: History
ISBN: 1528785878

Classic Books Library presents this brand new edition of “The Federalist Papers”, a collection of separate essays and articles compiled in 1788 by Alexander Hamilton. Following the United States Declaration of Independence in 1776, the governing doctrines and policies of the States lacked cohesion. “The Federalist”, as it was previously known, was constructed by American statesman Alexander Hamilton, and was intended to catalyse the ratification of the United States Constitution. Hamilton recruited fellow statesmen James Madison Jr., and John Jay to write papers for the compendium, and the three are known as some of the Founding Fathers of the United States. Alexander Hamilton (c. 1755–1804) was an American lawyer, journalist and highly influential government official. He also served as a Senior Officer in the Army between 1799-1800 and founded the Federalist Party, the system that governed the nation’s finances. His contributions to the Constitution and leadership made a significant and lasting impact on the early development of the nation of the United States.

The Political Determinants of Federal Expenditure at the State Level

The Political Determinants of Federal Expenditure at the State Level
Author: Gary A. Hoover
Publisher:
Total Pages: 0
Release: 2003
Genre:
ISBN:

Small U.S. states are over-represented in the Senate and over-weighted in the electoral college. Atlas et al. (1995) have drawn attention to the effect of the over-representation of small states in the Senate by showing that per capita federal expenditure is positively related to per capita representation in the Senate. Our data cover a later period and are disaggregated into five spending categories compared to the three considered by Atlas et al. In addition, we consider a broader set of political control variables in our regression equation. We confirm the most important result of Atlas et al., which is that state-level federal expenditure is positively related to per capita senate representation for that state. The effect is strongest for procurement spending. By contrast, we find evidence against their result that per capita representation in the House is positively related to per capita federal expenditure. We include a variety of other political control variables in our analysis, and several of these variables are significant in a subset of our expenditure equations. Electoral votes is another variable which is a function of state size. Electoral votes are negatively associated with spending in several categories, with coefficients indicating that the overall effect is large. This reinforces the small state effect stemming from Senate representation. We find evidence that states which voted for the sitting president receive less spending per capita compared to states the sitting president lost by a narrow margin. Some other political variables are found to be both statistically and economically significant, but in each case, only for a subset of the spending equations.