UNIVERSITY OF CALIFORNIA SAN DIEGO U.S. Government Institutions and the Economy A dissertation submitted in partial satisfaction of the requirements for the degree of Doctor of Philosophy in Economics by Grant Erik Johnson Committee in charge: Professor Julie Berry Cullen, Co-Chair Professor Valerie Ramey, Co-Chair Professor Jeffrey Clemens Professor Zoltan Hajnal Professor Thad Kousser 2018 Copyright Grant Erik Johnson, 2018 All rights reserved. The Dissertation of Grant Erik Johnson is approved and is acceptable in quality and form for publication on microfilm and electronically: Co-Chair Co-Chair University of California San Diego 2018 iii DEDICATION To my parents, Kirk and Amy. iv TABLE OF CONTENTS Signature Page . iii Dedication . iv Table of Contents . v List of Figures . vii List of Tables . ix Acknowledgements . xi Vita........................................................................ xiii Abstract of the Dissertation . xiv Chapter 1 Procuring Pork: Contract Characteristics and Channels of Influence . 1 1.1 Introduction . 2 1.2 Background . 7 1.3 Contract Concentration Index . 11 1.4 Data and Descriptive Statistics . 15 1.5 Empirical Framework . 17 1.6 Results . 19 1.6.1 Identification . 19 1.6.2 Baseline . 23 1.6.3 Own-Jursidiction vs. Other Procurement Spending . 24 1.7 Conclusion . 26 Chapter 2 Institutional Determinants of Municipal Fiscal Dynamics . 29 2.1 Introduction . 30 2.2 Background . 32 2.2.1 Municipal Governments . 32 2.2.2 Tax and Expenditure Limitations (TELs) . 35 2.3 Data................................................................ 37 2.3.1 Shock Construction . 37 2.3.2 Descriptive Statistics . 39 2.4 Empirical Strategy . 41 2.5 Results . 42 2.5.1 Main Results . 42 2.5.2 Threats to Identification . 47 2.6 Conclusion . 49 Chapter 3 Procuring Protection? Evidence from the U.S. House of Representatives . 51 v 3.1 Introduction . 52 3.2 Data................................................................ 57 3.3 Empirical Framework . 61 3.3.1 Specification . 61 3.3.2 Identification . 63 3.4 Results . 67 3.5 Conclusion . 75 Appendix A Procuring Pork: Contract Characteristics and Channels of Influence . 77 A.1 Data Appendix . 78 A.1.1 USASpending.gov Fields Used in Concentration Index . 80 A.1.2 U.S. House Appropriations Subcommittee Jurisdictions . 82 A.1.3 Contract Concentration Index Descriptive Statistics . 94 A.1.4 Contract Concentration Index Cells . 95 A.2 Examples of Appropriations Lines . 98 Appendix B Institutional Determinants of Municipal Fiscal Dynamics . 101 B.1 Additional Results . 102 B.2 Robustness . 105 Appendix C Procuring Protection? Evidence from the U.S. House of Representatives . 109 C.1 Additional Tables and Figures . 110 References . 116 vi LIST OF FIGURES Figure 1.1: Federal Government Authorizations (%GDP) . 8 Figure 1.2: Decomposition of Discretionary Outlays by Spending Vehicle . 8 Figure 1.3: Composition of U.S. Federal Budget (2011). 9 Figure 1.4: Distribution and Median of Cell Concentration . 14 Figure 2.1: State and Local Government Spending, 1960-2016 . 33 Figure 2.2: Municipal Government Spending, 2007 . 34 Figure 2.3: States Implementing General Expenditure and Revenue TELs . 36 Figure 2.4: Baseline Results - Impulse Response Functions . 46 Figure 2.5: Comparison of Trends . 47 Figure 2.6: Comparison of Shock Densities . 48 Figure 3.1: Control of the House of Representatives by Congress . 58 Figure 3.2: Close Elections by Congress . 64 Figure 3.3: McCrary Tests . 66 Figure 3.4: FAADS Spending Results (No Controls) . 71 Figure 3.5: FAADS Spending Results (With Controls) . 72 Figure 3.6: Procurement Spending Results (No Controls) . 73 Figure 3.7: Procurement Spending Results (With Controls) . 74 Figure A.1: Army Operations and Maintenance Program 2014 Appropriations Line Item 98 Figure A.2: Navy Virginia-Class Submarine Program 2014 Appropriations Line Item . 99 Figure A.3: National Parks Service 2014 Appropriations Line Item . 100 Figure C.1: Additional FAADS Spending Results (No Controls) . 111 Figure C.2: Additional FAADS Spending Results (With Controls) . 112 Figure C.3: Additional Procurement Spending Results (No Controls) . 114 vii Figure C.4: Additional Procurement Spending Results (With Controls) . 115 viii LIST OF TABLES Table 1.1: Procurement Spending Summary Statistics . 16 Table 1.2: Changes in Leadership by Congress . 21 Table 1.3: Placebo Test Results . 22 Table 1.4: Aggregate Procurement Results . 23 Table 1.5: Own-Jurisdiction vs. Other Procurement Results . 25 Table 2.1: States Implementing General Expenditure and Revenue TELs . 37 Table 2.2: Summary Statistics . 40 Table 2.3: Baseline Results. ..