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Title: The Rise of the States: U.S. Fiscal Decentralization in the Postwar Period

Citation Type: Journal Article

Publication Year: 2011

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Abstract: One of the most dramatic changes in the fiscal federalism landscape during the postwar period has been therapid growth in state budgets, which almost tripled as a share of GDP and doubled as a share of governmentspending between 1952 and 2006. We argue that the greater role of states cannot be easily explained bychanges in Tiebout forces of fiscal competition, such as mobility and voting patterns, and are not accounted forby demographic or income trends. Rather, we demonstrate that much of the growth in state budgets has beendriven by changes in intergovernmental interactions. Restricted federal grants to states have increased, andfederal policy and legal constraints have also mandated or heavily incentivized state own-source spending,particularly in the areas of education, health and public welfare. These outside pressures moderate the forcesof fiscal competition and must be taken into account when assessing the implications of observed revenue andspending patterns.

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Authors: Singhal, Monica; Clemens, Jeffrey; Baicker, Katherine

Periodical (Full): Journal of Public Economics

Issue: 11

Volume: 96

Pages: 1079 - 1091

Data Collections: IPUMS USA

Topics: Other

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