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Testing for Political Effects on Total Factor Productivity

Author

Listed:
  • Betty Agnani

    (Universidad de Granada)

  • Henry Aray

    (Universidad de Granada)

Abstract

We test the effects of different combinations of parties simultaneously holding office in the central and regional governments on regional economic growth. We hypothesize that if such effects indeed exist, they should accrue through total factor productivity (T F P ). Using panel data for the Spanish regions over the 1988-2004 period, we find no effects of any combinations of parties on T F P growth rate. Our results are robust to different methods of estimation and different measures of T F P and could have a twofold interpretation. On the one hand, they could shed light on the consolidation of the governmental institutions of the Spanish federal state model. On the other hand, they could suggest, as shown by previous literature, that political effects on real economy could mainly accrue through aggregate demand policies.

Suggested Citation

  • Betty Agnani & Henry Aray, "undated". "Testing for Political Effects on Total Factor Productivity," ThE Papers 09/13, Department of Economic Theory and Economic History of the University of Granada..
    • Handle: RePEc:gra:wpaper:09/13
    as

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    File URL: http://www.ugr.es/~teoriahe/RePEc/gra/wpaper/thepapers09_13.pdf
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    References listed on IDEAS

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