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The Changing Determinants Of State Expenditure In The United States: 1965-1992

Author: GARY PAINTER AND KWI-HEE BAE
Published in PFM, Vol. 1 No. 4

This study builds upon the literature on state government
expenditure in the United States. The innovation in this study is twofold.
First, we highlight the importance of demographic factors in
driving state budgets. Second, we control for the presence of state
specific effects that may be important in determining the preferences of
the citizenry. We find that a number of economic and institutional
factors are important determinants of expenditure, and that higher
spending is associated with governments that are dominated by a
single party. The largest changes over the period concern education
and corrections spending, with the number of children of either
primary or secondary school age becoming a less important
determinant of expenditure, and the number of prisoners and college
age students becoming an important positive determinant of
expenditure.

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