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Political Competition and Economic Performance: Theory and Evidence from the United States
Author(s) -
Timothy Besley,
Torsten Persson,
Daniel Sturm
Publication year - 2005
Language(s) - English
Resource type - Reports
DOI - 10.3386/w11484
Subject(s) - competition (biology) , politics , political science , economics , political economy , law , biology , ecology
We formulate a model to explain why the lack of political competition may stifle economic performance and use the United States as a testing ground for the model’s predictions, exploiting the 1965 Voting Rights Act which helped break the near monpoly on political power of the Democrats in southern states. We find statistically robust evidence that changes in political competition have quantitatively important effects on state income growth, state policies, and quality of Governors. By our bottom-line estimate, the increase in political competition triggered by the Voting Rights Act raised long-run per capita income in the average affected state by about 20 percent.

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