Health politics? Determinants of US states’ reactions to COVID-19

Etienne Farvaque, Hira Iqbal and Nicolas Ooghe
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Hira Iqbal: LEM - Lille économie management - UMR 9221 - UA - Université d'Artois - UCL - Université catholique de Lille - Université de Lille - CNRS - Centre National de la Recherche Scientifique

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Abstract: Were policy responses of the US states to the pandemic driven by partisan politics or by budgetary reasons? We show that balanced-budget rules also had an impact, mediated by the possibility of benefiting from the funds previously stored in budget stabilisation funds. State policymakers tried to square the circle by simultaneously respecting budget rules, limiting the economic impact of the social distancing measures, combating the pandemic and pandering to their political bases. Some fiscal rules have induced a trade-off between health and public finance, which may reignite the debate on the pro-cyclicality of fiscal rules.

Keywords: COVID-19; balanced-budget rules; budget stabilisation funds; social distancing (search for similar items in EconPapers)
Date: 2020-11-24
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Published in Journal of Public Finance and Public Choice, 2020, ⟨10.1332/251569120X16040852770342⟩

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-03128875

DOI: 10.1332/251569120X16040852770342

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