Bad times keep us together: Policy priorities and economic shocks

Abstract

ObjectiveWe analyze how economic shocks affect the partisan nature of budgetary trade‐offs and use data from the U.S. Census Annual Survey of Government Finance to illustrate it.MethodsWe propose a compositional approach to model trade‐offs among 10 budgetary categories across both time and space in U.S. states.ResultsWe find support for the notion that partisanship drives the allocation of budgetary expenditures. However, during times of negative economic shocks, either within a state or in neighboring states, Democratic and Republican governors have a similar budgetary response.ConclusionsThe results show the effects of economic and political shifts, as well as the implications of spillovers from other states, on partisan decisions about trade‐offs in government budgets.