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Party Discipline and Government Spending: Theory and Evidence

Curto-Grau, Marta ; Zudenkova, Galina

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Abstract

This paper studies the relationship between party discipline and discretionary spending with theory and data. We propose a theoretical model in which a politician faces a conflict between her constituents' interests and the party line. Party loyalty is electorally costly for the politician and is therefore rewarded by the party leader with greater amounts of discretionary spending allocated to the politician's constituency. The more intense the conflict between the voters' and the party's interests, the more grants the district receives. Using panel data on party discipline in the U.S. House of Representatives and federal grants to congressional districts between 1984 and 2010, we provide evidence that districts represented by loyal legislators receive greater amounts of discretionary spending. This effect holds only for legislators in the majority party, who may enjoy a legislative advantage. Districts represented by loyal legislators who face a greater conflict of interest between following the party and serving their constituents (e.g., Republican legislators representing liberal-leaning districts) are rewarded to a larger extent.

Item Type: Working paper
Series Name: Discussion Paper Series, University of Heidelberg, Department of Economics
Volume: 0624
Place of Publication: Heidelberg
Date Deposited: 24 Nov 2016 11:27
Date: November 2016
Number of Pages: 33
Faculties / Institutes: The Faculty of Economics and Social Studies > Alfred-Weber-Institut for Economics
Subjects: 330 Economics
Uncontrolled Keywords: Party discipline; discretionary spending; party line.
Schriftenreihe ID: Discussion Paper Series / University of Heidelberg, Department of Economics
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