Election Outcomes and State Economic Performance

This paper examines the relationship between the party in control of the state government and the economic performance of the state over six four-year periods covering the years 1978 to 2002. The main finding is that the political variables, that is, what party controls the executive branch and what party controls the legislative branch of the state government, have no significant effect on the state’s economic performance. We also examine the mechanisms by which party politics could, if it would, achieve an effect on economic performance, such as tax rates and spending on infrastructure. Party politics also shows little or no effect on these intermediate policy stages. Likewise, party matters little for quality of life; in contrast, a sociological measure proves easily significant. We investigate several possible factors that can confound a negative conclusion such as this. We conclude that these results can best be understood under a variant of the median voter model. Both parties, when in competition for votes, will adopt those economic policies believed to be effective by the politically central voters, regardless of party stereotypes.