International Tax and Public Finance

, Volume 20, Issue 4, pp 687–714 | Cite as

The size and scope of government in the US states: does party ideology matter?



We investigate empirically how party ideology influences size and scope of government as measured by the size of government, tax structure and labor market regulation. Our dataset comprises 49 US states over the 1993–2009 period. We employ the new data on the ideological mapping of US legislatures by Shor and McCarty (Am. Polit. Sci. Rev. 105(3):530–551, 2011) that considers spatial and temporal differences in Democratic and Republican Party ideology. We distinguish between three types of divided government: overall divided government, proposal division and approval division. The main result suggests that Republican governors have been more active in deregulating labor markets. We find that ideology-induced policies were counteracted under overall divided government and proposal division.


Size and scope of government Political ideology US states 

JEL Classification

D72 H70 H11 



We are grateful for comments from Felix Bierbrauer, Francois Facchini, Alexander Fink, Martin Hellwig, David Dreyer Lassen, Leandro de Magalhaes, Mikaël Melki, Fabio Padovano, Martin Rode, Mark Schelker, Jim Snyder, Christian Traxler, Heinrich Ursprung and participants of the 2010 meetings of the Public Choice Society, the 2010 meetings of the European Public Choice Society, the 2010 Silvaplana Workshop on Political Economy, the 2011 meetings of the Public Choice Society, the 2011 meetings of the European Association of Law and Economics, the 2012 meetings of the International Institute of Public Finance and seminars at University of Lucca, the Max Planck Institute for Research on Collective Goods in Bonn, the University Paris 1, Lund University, the University of Freiburg, the ifo Institute, the University of Siegen, the University of Leicester, and the University of Augsburg. We also thank state budget offices for help, in particular Paul Potamianos (Connecticut), Sheila Peterson (North Dakota), Kristin Keith (Oregon) and Samantha Smithingell (Washington). Henrik Pedersen, Margret Schneider and Christian Simon provided excellent research assistance.


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Copyright information

© Springer Science+Business Media New York 2013

Authors and Affiliations

  1. 1.Department of Economics and BusinessAarhus UniversityAarhus VDenmark
  2. 2.Center for Economic StudiesUniversity of MunichMunichGermany
  3. 3.ifo InstituteMunichGermany

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