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The Political Economy of Pork-Barrel Spending Graduate Theses, Dissertations, and Problem Reports 2014 The Political Economy of Pork-Barrel Spending J. Zachary Klingensmith Follow this and additional works at: https://researchrepository.wvu.edu/etd Recommended Citation Klingensmith, J. Zachary, "The Political Economy of Pork-Barrel Spending" (2014). Graduate Theses, Dissertations, and Problem Reports. 5991. https://researchrepository.wvu.edu/etd/5991 This Dissertation is protected by copyright and/or related rights. It has been brought to you by the The Research Repository @ WVU with permission from the rights-holder(s). You are free to use this Dissertation in any way that is permitted by the copyright and related rights legislation that applies to your use. For other uses you must obtain permission from the rights-holder(s) directly, unless additional rights are indicated by a Creative Commons license in the record and/ or on the work itself. This Dissertation has been accepted for inclusion in WVU Graduate Theses, Dissertations, and Problem Reports collection by an authorized administrator of The Research Repository @ WVU. For more information, please contact [email protected]. The Political Economy of Pork-Barrel Spending J. Zachary Klingensmith Dissertation Submitted to the College of Business and Economics at West Virginia University In partial fulfillment of the requirements for the degree of Doctor in Philosophy in Economics Roger Congleton, Ph.D, Chair Brian Cushing, Ph.D. Leslie Dunn, Ph.D. Joshua Hall, Ph.D Donald Lacombe, Ph.D. Department of Economics Morgantown, WV 2014 Key words: Campaign fundraising; Electoral success; Employment; Political Economy; Pork- Barrel Spending; Public Economics Copyright 2014 J. Zachary Klingensmith Abstract The Political Economy of Pork-Barrel Spending J. Zachary Klingensmith This dissertation consists of five papers which examine the impact pork-barrel spending has on legislative decision-making. In chapter 1, I introduce the theory behind pork-barrel spending, legislative coalitions and other similar topics. In chapter 2, I determine if pork-barrel spending has any impact on state employment levels. I use both a spatial and non-spatial modeling methodology to answer the question. Chapter 3 examines the relationship between the amount of pork-barrel spending appropriated by the Senator and the amount of money the Senator is able to fundraise. Chapter 4 integrates the results from chapter 3 to develop two-stage and three-stage models which estimate electoral success. The fifth and final chapter concludes the dissertation by using the results from the other chapters to determine whether or not pork-barrel spending suffers from the Tragedy of the Commons. Acknowledgements First and foremost, I would like to thank my wife for all of the support she has given me over the past eight years. Even though we have both been stressed pursuing our doctorates, I know that our love and support for each other has had only a positive impact on our work. I would also like to express sincere thanks to my family. Even though I have been in school for twenty-four years, your assistance has been unwavering. Without your support and the knowledge that you are supporting my decisions, I am not sure if I would have ever gotten to this point. I will finally have the desk I have been working towards since first grade. Next, I would like to thank my advisor Dr. Roger Congleton. Even though you came at the start of my third year, I have learned a tremendous amount from you. You have helped me become a better researcher and writer and, most importantly, a better academic. I know that I will look back at my years at WVU very fondly because of you. I would also like to thank my committee for all of the feedback, advice and support. Those on my committee include Dr. Brian Cushing, Dr. Leslie Dunn, Dr. Joshua Hall and Dr. Donald Lacombe. In addition to their work on my committee, each of my committee members has influenced my career both in and out of the classroom as well. Finally, I would like to thank both my friends and past professors as well. Specifically, I would like to thank both Patrick Manzi and William McAndrew for all of their comradery and assistance during my time at WVU. I would also like to thank my professors, in both mathematics and economics, at Washington and Jefferson College as well as my teachers at Yough High School. iii Table of Contents Abstract .................................................................................................................................................. ii Acknowledgements ................................................................................................................................ iii Table of Contents ................................................................................................................................... iv List of Figures ......................................................................................................................................... vi List of Tables ......................................................................................................................................... vii Chapter 1: The Institutions of Pork-Barrel Spending................................................................................. 1 1.1 Introduction ............................................................................................................................. 1 1.2 The Institutions of Earmark Legislation ..................................................................................... 3 1.3 Theory of Coalitions ................................................................................................................. 6 1.4 Spatial Econometrics Primer ................................................................................................... 10 1.5 Conclusion ............................................................................................................................. 14 Chapter 2: Pork-Barrel Spending and State Employment Levels ............................................................. 16 2.1 Introduction ........................................................................................................................... 16 2.2 Public Policies and State Employment .................................................................................... 18 2.3 Model, Data, and Estimation Strategy .................................................................................... 20 Data: Demographics .............................................................................................................. 21 Data: Capital Stock and Business Climate ............................................................................... 23 Estimation Strategy................................................................................................................ 25 2.4 Estimation and Analysis .......................................................................................................... 26 OLS Estimates of State Employment Effects ........................................................................... 27 OLS Estimates of State Economic Growth Rate Effects ........................................................... 30 Spatial Estimates of State Employment Effects....................................................................... 32 Spatial Estimates of State Economic Growth Rate Effects ....................................................... 35 Implications of Estimates ....................................................................................................... 35 2.5 Conclusions ............................................................................................................................ 37 2.6 Appendix: Alternative Time Periods........................................................................................ 38 3-Year Changes in Employment.............................................................................................. 38 The Special Case of the 2008 Recession and Stimulus ............................................................ 42 Chapter 3: The Impact of Pork-Barrel Spending on Incumbent Fundraising ............................................ 44 3.1 Introduction ........................................................................................................................... 44 3.2 District Targeted Federal Spending and Reelection ................................................................. 45 iv 3.3 The Fundraising Effects of Pork Are Understudied .................................................................. 48 Model, Data and Estimation Strategy ..................................................................................... 49 Data ....................................................................................................................................... 49 Estimation Strategy................................................................................................................ 54 3.4 Estimation and Analysis .......................................................................................................... 55 Results: OLS Estimates of Fundraising with Pork-Barrel Spending ........................................... 56 OLS Estimates of Fundraising with Federal Appropriations ..................................................... 60 Panel Estimates of Fundraising with Pork-Barrel Spending ..................................................... 61
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