Political Connections, Allocation of Stimulus Spending, and the Jobs Multiplier

Using American Recovery and Reinvestment Act (ARRA) data, we show that firms lever their political connections to win stimulus grants and that public expenditure channeled through politically connected firms hinders job creation. We build a unique database that links information on campaign contributions, state legislative elections, firm characteristics, and ARRA grant allocation. Using exogenous variation in political connections based on ex-post close elections held before ARRA, we causally show that politically connected firms are 38 percent more likely to secure a grant. Based on an instrumental variable approach, we also establish that a one standard deviation increase in the share of politically connected ARRA spending lowers the number of jobs created per $1 million spent by 7.1 jobs. Therefore, the impact of fiscal stimulus is not only determined by how much is spent, but also by how the expenditure is allocated across recipients.

The State Legislative Elections of 2018: Symposium Introduction

This symposium consists of six articles that examine the 2018 state legislative elections. The first article by Adam S. Myers sets the stage by highlighting the unprecedented level of contestation in state legislative elections, especially by Democratic candidates.

Do Campaign Finance Reforms Insulate Incumbents from Competition? New Evidence from State Legislative Elections

Variations in state campaign finance regulations across states and over time provide an opportunity to test the effects of reforms on the electoral success of incumbent state legislators. We use the most recent state legislative election returns dataset to test whether state campaign finance reforms help or hinder incumbents. Our analysis of nearly 66,000 contests in 33 years reveals that campaign contribution limits and partial public financing have little impact on incumbent reelection prospects. However, full public financing and prohibitions on corporate independent expenditures significantly increase the probability of incumbent reelection.

Explaining Increased Contestation in the 2018 State Legislative Elections

State legislative elections in the United States have long exhibited relatively low contestation rates. Between 2002 and 2016, for example, the percentage of state legislative seats fully contested by the two major parties in even-year elections never reached more than 63.6% and was as low as 54.6%.1 Indeed, some states always see fewer than one third of their legislative seats contested. It is not surprising that local media around the country routinely lament the low level of competition in statehouse races.2

‘Race was a motivating factor’: re-segregated schools in the American states

During the Obama presidency, Republicans made major gains in state legislative elections, especially in the South and the Midwest. Republicans’ control grew from 13 legislatures in 2009 to 32 in 2017. A major but largely unexamined consequence of this profound shift in state-level partisan control was the resurgence of efforts to re-segregate public education. We examine new re-segregation policies, especially school district secession and anti-busing laws, which have passed in these states. We argue that the marked reversal in desegregation patterns and upturn in re-segregated school education is part of the Republican Party's anti-civil rights and anti-federal strategies, dressed up in the ideological language of colour-blindness.

Polarization and the Nationalization of State Legislative Elections

The electoral fortunes of state parties are partly shaped by the positions adopted by national parties. This creates the potential dilemma: The position that is best for the national party might be too extreme for the electorate in some states. Some state parties attempt to address this problem by adopting more moderate positions than their national-level counterparts. We argue that the efficacy of state party moderation hinges on the degree of polarization at the national level. We develop theory and examine empirical evidence that higher relative polarization at the national level exacerbates the degree to which national party positions and loyalties determine outcomes in U.S. state elections. When relative national polarization is high, we find evidence that state legislative election outcomes are determined by states’ orientations toward the national parties rather than the positions taken by state legislative parties.