Do Local Governments Represent Voter Preferences? Evidence from Hospital Financing under the Affordable Care Act
Justin Ross () and
Kosali Simon ()
No 26094, NBER Working Papers from National Bureau of Economic Research, Inc
A mainstream motivation for decentralized government is to enable public service investments to better align with political preferences that may differ by geographical region. This paper examines how political preferences determine local government provision of hospital services. We find that local governments in areas more supportive of public insurance expansion responded to such state action by increasing expenditures on hospitals, whereas those in areas that voted against such expansions used the savings to reduce property taxes. This finding suggests that local government financial responses indeed align with political preferences.
JEL-codes: H71 H72 I1 I11 (search for similar items in EconPapers)
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