Partisanship, Political Polarization, and State Budget Outcomes: The Case of Higher Education

Abstract

We explore the impact of partisanship in state governments on policy expenditures and priorities in a public policy area where the distribution of policy preferences does not fall clearly on the standard left-right political spectrum. We begin with the assumptions that (1) partisanship affects policy issues differently, due to variability in their substance and dimensionality; (2) party coalitions are heterogeneous, change over time, and are influenced by a variety of policy-demanding groups; and (3) policy preferences and policy priorities differ depending on a variety of factors (i.e., issue salience, economic cycles, and political polarization). We argue that, under these assumptions, parties matter, but the relevance and size of the effects are conditional on political polarization and economic conditions. We focus our analysis on higher education due to its complex policy space by providing both collective and particularized benefits and by presenting a growing mismatch between constituency preferences and policy outcomes. We find evidence that Democratic Party strength has a positive impact on state funding for higher education, but this positive effect diminishes as political polarization or unemployment rates increase.