Location of Repository

Do small states get more federal monies? Myth and reality about the US senate malapportionment

By Valentino Larcinese, Leonzio Rizzo and Cecilia Testa

Abstract

We analyze the relationship between senate malapportionment and the allocation of the US federal budget to the states during the period 1978-2002. A substantial literature originating from the in�uential paper by Atlas et al. (1995), using a within estimation methodology nds that small and overrepresented states get signi cantly larger shares of federal funds. Revisiting the econometric speci cation used by the current empiri- cal research, we show that the number of senators percapita is inappropriate to capture malapportionement in regressions using broad federal programs, and that the results ob- tained with this indicator are extremely non-robust to reasonable speci cation changes. In particular, senators percapita have a signi cant impact on federal spending only in re- gressions containing state xed e¤ects. Furthermore, the coefficients estimated using the within methodology are statistically di¤erent across states and, therefore, cannot be used to assess spending differentials between states. The magnitude and signi cance of those coe¢ cients suggest a within state-speci c inverse relationship between broad spending categories and population which is not systematically related to the size of the states and seems more compatible with incrementalist theories of budget allocation

Topics: HJ Public Finance
Publisher: Munich University
Year: 2007
OAI identifier: oai:eprints.lse.ac.uk:4732
Provided by: LSE Research Online
Download PDF:
Sorry, we are unable to provide the full text but you may find it at the following location(s):
  • http://mpra.ub.uni-muenchen.de (external link)
  • http://eprints.lse.ac.uk/4732/ (external link)
  • Suggested articles


    To submit an update or takedown request for this paper, please submit an Update/Correction/Removal Request.