Politics and the Distribution of Federal Funds: Evidence from Federal Legislation in Response to COVID-19

Jeffrey Clemens and Stan Veuger

No 28875, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: COVID-19 relief legislation offers a unique setting to study how political representation shapes the distribution of federal assistance to state and local governments. We provide evidence of a substantial small-state bias: an additional Senator or Representative per million residents predicts an additional $670 dollars in aid per capita across the four relief packages. Alignment with the Democratic party predicts increases in states’ allocations through legislation designed after the January 2021 political transition. This benefit of partisan alignment operates through the American Rescue Plan Act’s sheer size, as well as the formulas through which it distributed transportation and general relief funds.

JEL-codes: E62 H12 H71 H72 H77 (search for similar items in EconPapers)
Date: 2021-05
New Economics Papers: this item is included in nep-mac and nep-pol
Note: PE POL
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Citations: View citations in EconPapers (8)

Published as Jeffrey Clemens & Stan Veuger, 2021. "Politics and the Distribution of Federal Funds: Evidence from Federal Legislation in Response to COVID-19," Journal of Public Economics, .

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Journal Article: Politics and the distribution of federal funds: Evidence from federal legislation in response to COVID-19 (2021)
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