Political Competition and Economic Performance: Theory and Evidence from the United States

Besley, Timothy; Persson, Torsten and Sturm, Daniel (January 2006): Political Competition and Economic Performance: Theory and Evidence from the United States. Discussion Papers in Economics 2006-4

Abstract

We formulate a model to explain why the lack of political competition may stifle economic performance and use the United States as a testing ground for the model’s predictions, exploiting the 1965 Voting Rights Act which helped break the near monpoly on political power of the Democrats in southern states. We find statistically robust evidence that changes in political competition have quantitatively important effects on state income growth, state policies, and quality of Governors. By our bottom-line estimate, the increase in political competition triggered by the Voting Rights Act raised long-run per capita income in the average affected state by about 20 percent.

• Item Type: Paper
• Keywords: US south; voting restrictions; political competition; economic growth
• Faculties: Economics; Economics > Munich Discussion Papers in Economics
• Subjects: 300 Social sciences > 300 Social sciences, sociology and anthropology; 300 Social sciences > 330 Economics
• JEL Classification: D72, H11, H70, N12, O11
• Language: English