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

Citation Type: Working Paper

Publication Year: 2010

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Abstract: One of the most dramatic changes in the fiscal federalism landscape during the postwar period has been the rapid growth in state budgets, which almost tripled as a share of GDP and doubled as a share of government spending between 1952 and 2006. We argue that the greater role of states cannot be easily explained by changes in Tiebout forces of fiscal competition, such as mobility and voting patterns. Rather, we demonstrate that much of the growth in state budgets has been driven by changes in intergovernmental interactions. Restricted federal grants to states have increased, and federal policy and legal constraints have alsomandated or heavily incentivized state own-source spending, particularly in the areas of education and health and public welfare. These outside pressures moderate the forces of fiscal competition and mean that state spending cannot beinterpreted solely as an expression of state residents preferences.

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

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Institution: Harvard University

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Publisher Location: Boston, Massachusetts

Data Collections: IPUMS USA

Topics: Education, Other, Poverty and Welfare

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