Partisan Policies, Fiscal Constraints, and the Growth of Regulation

Noel D. Johnson (George Mason University)
Matthew Mitchell (Mercatus Center)
Steven Yamarik (California State University - Long Beach)

Abstract: We investigate whether laws restricting fiscal policies across U.S. states lead politicians to regulate more instead. We first show that partisan policy outcomes do exist across U.S. states using panel budget data from 1970 to 2009. Then we demonstrate that these partisan policy outcomes are moderated in states with no-carry restrictions on public deficits. We then test whether unified Republican or Democratic state governments regulate more when they are constrained by no-carry restrictions. We find no-carry laws restrict partisan fiscal outcomes but tend to lead to more-partisan regulatory outcomes.

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