Political Competition, Policy and Growth: Theory and Evidence from the United States

Timothy Besley, Torsten Persson () and Daniel Sturm

CEP Discussion Papers from Centre for Economic Performance, LSE

Abstract: This paper develops a simple model to analyze how a lack of political competition may lead to policies that hinder economic growth. We test the predictions of the model on panel data for the US states. In these data, we find robust evidence that lack of political competition in a state is associated with anti-growth policies: higher taxes, lower capital spending and a reduced likelihood of using right-to-work laws. We also document a strong link between low political competition and low income growth.

Keywords: political competition; competition; government; US; economic development (search for similar items in EconPapers)
JEL-codes: D72 H11 H70 N12 O11 (search for similar items in EconPapers)
Date: 2010-10
New Economics Papers: this item is included in nep-cdm, nep-fdg and nep-pol
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (253)

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Related works:
Working Paper: Political competition, policy and growth: theory and evidence from the United States (2010)
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Persistent link: https://EconPapers.repec.org/RePEc:cep:cepdps:dp1009

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