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Divided we reform? Evidence from US welfare policies

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  • Bernecker, Andreas

Abstract

Divided government is often thought of as causing legislative deadlock. I investigate the link between divided government and economic reforms using a novel data set on welfare reforms in US states between 1978 and 2010. Panel data regressions show that, under divided government, a US state is around 25% more likely to adopt a welfare reform than under unified government. Several robustness checks confirm this counter-intuitive finding. Case study evidence suggests an explanation based on policy competition between governor, senate, and house.

Suggested Citation

  • Bernecker, Andreas, 2016. "Divided we reform? Evidence from US welfare policies," Journal of Public Economics, Elsevier, vol. 142(C), pages 24-38.
    • Handle: RePEc:eee:pubeco:v:142:y:2016:i:c:p:24-38
    DOI: 10.1016/j.jpubeco.2016.08.003
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    Cited by:

    1. Niklas Potrafke, 2018. "Government ideology and economic policy-making in the United States—a survey," Public Choice, Springer, vol. 174(1), pages 145-207, January.
    2. Andreas Bernecker & Pierre C. Boyer & Christina Gathmann, 2021. "The Role of Electoral Incentives for Policy Innovation: Evidence from the US Welfare Reform," American Economic Journal: Economic Policy, American Economic Association, vol. 13(2), pages 26-57, May.
    3. Lang (Kate) Yang, 2020. "Intergovernmental Costs of Political Gridlock: Local Government Cash Flow Smoothing during State Budgetary Delays," Public Finance Review, , vol. 48(1), pages 102-134, January.
    4. Alvaro Forteza & Juan S. Pereyra, 2021. "Separation of powers with ideological parties," Journal of Theoretical Politics, , vol. 33(3), pages 333-382, July.
    5. Dodge Cahan & Niklas Potrafke, 2021. "The Democrat-Republican presidential growth gap and the partisan balance of the state governments," Public Choice, Springer, vol. 189(3), pages 577-601, December.
    6. Buchheim, Lukas & Fretz, Stephan, 2020. "Parties, divided government, and infrastructure expenditures: Evidence from U.S. states," European Journal of Political Economy, Elsevier, vol. 61(C).
    7. Alvaro Forteza & Juan Sebastian Pereyra Barreiro, 2017. "The Trade-off between Governance and Checks and Balances," Working Papers ECARES ECARES 2017-06, ULB -- Universite Libre de Bruxelles.
    8. Luca Repetto & Maximiliano Sosa Andrés, 2022. "Divided Government and Polarization: Regression-Discontinuity Evidence from US States," CESifo Working Paper Series 9823, CESifo.
    9. Niklas Potrafke, 2017. "Government Ideology and Economic Policy-Making in the United States," CESifo Working Paper Series 6444, CESifo.
    10. Jindapon, Paan & Van Essen, Matt, 2019. "Political business cycles in a dynamic bipartisan voting model," Mathematical Social Sciences, Elsevier, vol. 102(C), pages 15-23.

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    More about this item

    Keywords

    Divided government; Legislative deadlock; Policy innovation; US welfare reform; Policy competition;
    All these keywords.

    JEL classification:

    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • D78 - Microeconomics - - Analysis of Collective Decision-Making - - - Positive Analysis of Policy Formulation and Implementation
    • H11 - Public Economics - - Structure and Scope of Government - - - Structure and Scope of Government
    • H75 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Government: Health, Education, and Welfare

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