Bargaining over a New Welfare State

Alessandro Bonatti and Kaj Thomsson

No 713, Working Paper Series from Research Institute of Industrial Economics

Abstract: The goal of this paper is twofold: First, to develop an estimable model of legislative politics in the US Congress, second, to provide a greater understanding of the objectives behind the New Deal. In the theoretical model, the distribution of federal funds across regions of the country is the outcome of bargaining game in which the President acts as the agenda-setter and Congress bargains over the final shape of the spending bill. For any given preferences (of the President) and distribution of seats in Congress, the model delivers a unique predicted allocation. Combined with data on New Deal programs, this is used to estimate the objectives of the Roosevelt administration. The results indicate that economic concerns for relief and recovery, though not necessarily for fundamental reform and development, largely drove New Deal spending. Political concerns also mattered, but more on the margin.

Keywords: Political Economy; LegislativeBargaining; New Deal; US Congress; Public Spending (search for similar items in EconPapers)
JEL-codes: C78 D72 H11 H50 N42 P48 (search for similar items in EconPapers)
Pages: 36 pages
Date: 2007-10-16
New Economics Papers: this item is included in nep-pbe and nep-pol
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Persistent link: https://EconPapers.repec.org/RePEc:hhs:iuiwop:0713

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