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Public Choice

, Volume 174, Issue 1–2, pp 145–207 | Cite as

Government ideology and economic policy-making in the United States—a survey

Literature survey

Abstract

This paper describes the influence of government ideology on economic policy-making in the United States. I review studies using data for the national, state and local levels and elaborate on checks and balances, especially divided government, measurement of government ideology and empirical strategies to identify causal effects. Many studies conclude that parties do matter in the United States. Democratic presidents generate, for example, higher rates of economic growth than Republican presidents, but these studies using data for the national level do not identify causal effects. Ideology-induced policies are prevalent at the state level: Democratic governors implement somewhat more expansionary and liberal policies than Republican governors. At the local level, government ideology hardly influences economic policy-making at all. How growing political polarization and demographic change will influence the effects of government ideology on economic policy-making will be an important issue for future research.

Keywords

Government ideology Economic policy-making Partisan politics United States Democrats Republicans Political polarization Causal effects 

JEL Classification

D72 E60 H00 N12 N42 P16 

Notes

Acknowledgements

I am grateful for comments from David Agrawal, Larry Bartels, Louis-Phillippe Beland, Christian Bjørnskov, Dodge Cahan, Devin Caughey, Leandro De Magalhaes, Axel Dreher, Per Fredriksson, Stefanie Gäbler, Roger Gordon, James Hamilton, Gary Jacobson, Björn Kauder, Pierre Mandon, Florian Neumeier, Lubos Pastor, Andrew Pickering, James Rockey, Christoph Schinke, Cameron Shelton, William F. Shughart II, Erik Snowberg, Heinrich Ursprung, and two anonymous referees, Christopher Costea, Kristin Fischer and Alexander van Roessel for excellent research assistance, and Lisa Giani-Contini for proof-reading.

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Copyright information

© Springer Science+Business Media, LLC, part of Springer Nature 2017

Authors and Affiliations

  1. 1.Department of EconomicsUniversity of MunichMunichGermany
  2. 2.Ifo Center for Public Finance and Political EconomyIfo InstituteMunichGermany

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