The Democrat-Republican presidential growth gap and the partisan balance of the state governments

Dodge Cahan () and Niklas Potrafke
Additional contact information
Dodge Cahan: University of Alberta

Public Choice, 2021, vol. 189, issue 3, No 13, 577-601

Abstract: Abstract It is known that the US economy has grown faster during Democrat presidencies, but the Democrat-Republican presidential GDP growth gap cannot be attributed fully to policy differences, nor did Democrat presidents happen to benefit systematically from more favorable external shocks. The question why thus remains open. We postulate that, if the effect is real, a Democratic Party performance advantage should be present with respect to measures of political control other than just the presidency. We investigate partisan control of US state governments and show that national GDP grew faster when more states had Democrat governors and Democrat-majority state legislatures: a one-standard-deviation increase in the share of governorships controlled by the Democratic Party (unified Democrat state governments) is associated with a 0.57-percentage-point (0.77-percentage-point) increase in the real US national GDP growth rate. The effect appears to occur on top of the presidential D-R growth gap, suggesting that the Democrat growth advantage may be a more generalized phenomenon. To investigate whether the effects are explained by state-level policy differences, we adopt an encompassing measure of a state’s policy priorities—state policy liberalism (in the modern, popular sense rather than the classical sense). Nevertheless, our findings are not explained by state policy liberalism. That result echoes the puzzle at the national level that key national policy differences cannot account for the presidential growth gap.

Keywords: Democrat-Republican GDP growth gap; Federalism; Partisan politics; Government ideology; Democrats; Republicans (search for similar items in EconPapers)
JEL-codes: D72 E60 H00 N12 N42 P16 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://link.springer.com/10.1007/s11127-021-00912-y Abstract (text/html)
Access to full text is restricted to subscribers.

Related works:
Working Paper: The Democratic-Republican Presidential Growth Gap and the Partisan Balance of the State Governments (2017)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:kap:pubcho:v:189:y:2021:i:3:d:10.1007_s11127-021-00912-y

Ordering information: This journal article can be ordered from
http://www.springer. ... ce/journal/11127/PS2

DOI: 10.1007/s11127-021-00912-y

Access Statistics for this article

Public Choice is currently edited by WIlliam F. Shughart II

More articles in Public Choice from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().