Partisanship Was a Feature Not a Bug of Stimulus


Earlier this year, Reason columnist and Cruise guest, the Mercatus Center economist Veronique de Rugy, caused a stir by documenting that political affiliation was a factor in where stimulus dollars flowed like so much campaign whiskey. De Rugy was challenged by stat-nerd Nate Silver, who has so far welshed on a bet to buy her and her colleagues lunch.

De Rugy has always been careful to note that her data and regression analyses "couldn't tell how much politics mattered compared to other factors, just that it mattered." Now at NRO's The Corner, she reports on new research that explains the situation a bit more. Turns out that the stimulus was indeed partisan, though not in the way you might think. The Dems who wrote the legislation internalized their policy slants in the design of the bill, rather than trying to guide money to their folks after its passage.

Take it away, Jason Reifler of Loyola University of Chicago and Jeffrey Lazarus of Georgia State University:

Money from the recent economic stimulus package is disproportionately going to Democratic House districts, leading to a debate over the cause of this trend. Stimulus critics contend that President Obama and majority Democrats are maneuvering, post-passage, to steer stimulus funds to Democratic House districts; defenders claim that the money is being distributed fairly, according to the substantive criteria of the stimulus package. We contend that both sides of the debate miss an important component of the distribution of federal funds: congressional majority parties routinely shape legislation to distribute federal funds according to their own policy priorities, and to politically benefit their own members. The Democrats of the 111th Congress are no different. Thus while partisanship is influencing the distribution of stimulus funds, the key locus of this partisanship was in the writing of a bill which advances Democratic policy goals such as clean energy, health care, education, and research, not in any post-passage activity. We examine the amount of stimulus funding going to each district. Controlling for districts' substantive claims to stimulus funds according to the criteria identified by President Obama and in the bill, party is no longer a significant predictor of a district's level of funding.

Reifler and Lazarus' study is online here.