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PARTY CUES, POLITICAL TRENDS, AND FISCAL INTERACTIONS IN THE UNITED STATES
Author(s) -
Leguizamon J. Sebastian,
Montero Kuscevic Casto Martin
Publication year - 2019
Publication title -
contemporary economic policy
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.454
H-Index - 49
eISSN - 1465-7287
pISSN - 1074-3529
DOI - 10.1111/coep.12421
Subject(s) - yardstick , politics , economics , competition (biology) , state (computer science) , quality (philosophy) , panel data , space (punctuation) , public economics , function (biology) , empirical research , microeconomics , political science , econometrics , ecology , philosophy , linguistics , geometry , mathematics , epistemology , algorithm , evolutionary biology , computer science , law , biology
Recent theoretical and empirical research has suggested that similarities in party affiliations across space will alter voters' comparisons, thus influencing fiscal policy mimicking. We employ a two‐regime spatial panel data model applied to U.S. state governors from 1970 to 2012, and find rather weak empirical evidence of influence of political party affiliations in fiscal yardstick competition. Our observed cross‐state interdependence in fiscal policies suggests voters may not weigh party affiliation heavily in their measure of comparative quality, treating each incumbent individually and independently. Incumbents strategically choose policy accordingly. This provides indirect support for the median voter theorem, in which incumbents' objective function is to maximize votes, independent of political affiliation. ( JEL D72, H2, H7)