Political budget cycles and the civil service: Evidence from highway spending in US states

Abstract

We study political budget cycles in infrastructure spending that are conditional on bureaucratic organization. Bureaucrats can facilitate or hinder politicians' ability to engage in voter-friendly spending around elections. To test this idea, we use civil service reforms undertaken by US states in the second half of the 20th century to study political budget cycles in highway spending under civil service and patronage. We find that under patronage, highway spending is 12% higher in election years and 9% higher in the year before an election. By contrast, under civil service highway spending is essentially smooth over the electoral cycle. These findings provide a novel way through which civil service rules can stabilize government activity.