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Political competition and economic performance: theory and evidence from the United States

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  • Besley, Timothy
  • Persson, Torsten
  • Sturm, Daniel.M

Abstract

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.

Suggested Citation

  • Besley, Timothy & Persson, Torsten & Sturm, Daniel.M, 2005. "Political competition and economic performance: theory and evidence from the United States," LSE Research Online Documents on Economics 3770, London School of Economics and Political Science, LSE Library.
    • Handle: RePEc:ehl:lserod:3770
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    References listed on IDEAS

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    JEL classification:

    • J1 - Labor and Demographic Economics - - Demographic Economics

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