Parties, divided government, and infrastructure expenditures: Evidence from US states

Lukas Buchheim and Stephan Fretz

Munich Reprints in Economics from University of Munich, Department of Economics

Abstract: This paper examines the impact of parties and divided government on infrastructure expenditures for transportation, education, and social services in U.S. states. As infrastructure expenditures are considered a bi-partisan priority, we hypothesize that divided governments expand infrastructure spending compared to governments under true Democratic or Republican control. We test this hypothesis using U.S. state-level data over the period 1970 to 2008 and find that divided governments indeed increase expenditures for these budget categories. Specifically, divided governments spend more on transportation than unified Democratic governments, and more on education and social services than unified Republican governments. The effect is most pronounced for the core infrastructure of transportation and even stronger when only looking at capital outlays instead of total expenditures.

Date: 2020
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Journal Article: Parties, divided government, and infrastructure expenditures: Evidence from U.S. states (2020)
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