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- Title
Political Competition, Policy and Growth: Theory and Evidence from the US.
- Authors
BESLEY, TIMOTHY; PERSSON, TORSTEN; STURM, DANIEL M.
- Abstract
This paper develops a simple model to analyse 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.
- Subjects
UNITED States; U.S. states politics &; government; ECONOMIC development; ECONOMIC competition; POLITICAL parties; TAXATION economics; CAPITAL investments; RIGHT to work (Human rights) -- Law &; legislation; GOVERNMENT revenue; PANEL analysis
- Publication
Review of Economic Studies, 2010, Vol 77, Issue 4, p1329
- ISSN
0034-6527
- Publication type
Article
- DOI
10.1111/j.1467-937X.2010.00606.x