DP5138 Political Competition and Economic Performance: Theory and Evidence from the United States
|Author(s):||Timothy J. Besley, Torsten Persson, Daniel M Sturm|
|Publication Date:||July 2005|
|Keyword(s):||economic growth, political competition, US south, voting restrictions|
|JEL(s):||D72, H11, H70, N12, O11|
|Programme Areas:||International Macroeconomics, Public Economics, Institutions and Economic Performance|
|Link to this Page:||cepr.org/active/publications/discussion_papers/dp.php?dpno=5138|
One of the most cherished propositions in economics is that market competition by and large raises consumer welfare. But whether political competition has similarly virtuous consequences is far less discussed. This paper formulates a model to explain why political competition may enhance economic performance and uses the United States as a testing ground for the model's implications. It finds statistically robust evidence that political competition has quantitatively important effects on state income growth, state policies, and the quality of Governors.