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The political economy of budget trade-offs

Published online by Cambridge University Press:  19 October 2018

Christopher Adolph ,
Christian Breunig Open the ORCID record for Christian Breunig [Opens in a new window]  and
Chris Koski
Christopher Adolph
Affiliation:
Department of Political Science and Center for Statistics and the Social Sciences, University of Washington, USA
Christian Breunig*
Affiliation:
Department of Political Science and Public Administration, University of Konstanz, Germany
Chris Koski
Affiliation:
Department of Political Science, Reed College, USA
*
*Corresponding author. E-mail: [email protected]
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Abstract

Because the American states operate under balanced budget requirements, increases in spending in one area typically entail equal and opposite budget cuts in other programs. The literature analysing the correlates of government spending by policy area has mostly ignored these trade-offs inherent to policymaking, failing to address one of the most politically interesting and important dimensions of fiscal policy. Borrowing from the statistical literature on compositional data, we present more appropriate and efficient methods that explicitly incorporate the budget constraint into models of spending by budget category. We apply these methods to eight categories of spending from the American states over the years 1984–2009 to reveal winners and losers in the scramble for government spending. Our findings show that partisan governments finance their distinct priorities by raiding spending items that the opposition prefers, while different political institutions, economic conditions and state demographics impose different trade-offs across the budget.

Keywords

budgetingcompositional datapolitical partiesUnited States
Type
Research Article
Information
Journal of Public Policy , Volume 40 , Issue 1 , March 2020 , pp. 25 - 50
Copyright
© Cambridge University Press 2018 

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Footnotes

*

Previous versions of this paper were presented at the Annual Meetings of the American Political Science Association and the Midwest Political Science Association, as well as at the Conference on Political Competition and Government Policy at Duke University. We thank Jim Alt, Herbert Kitschelt, Michael New and the anonymous reviewers for helpful suggestions.

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