Abstract
Pork-barrel spending is defined as a project that is funded by the national tax base and yet only benefits a small, localized population. Anecdotally, this type of spending is often criticized as short-sighted, inefficient, and wasteful. This paper is designed to determine whether pork-barrel spending is a driver of state economic growth, both state employment and gross domestic product, despite criticism to the contrary. I find that pork-barrel spending does have an effect on employment, but this effect is temporary.
Highlights
Pork-barrel projects have been a major source of political controversy over the past two decades because they are funded with national tax revenues yet only benefit a small, localized population
This paper examines the effects of pork-barrel spending on job creation in both the short and long term
The two dependent variables used in this paper are the change in state total employment and the change in gross domestic product (GDP) over six five-year time periods
Summary
Pork-barrel projects have been a major source of political controversy over the past two decades because they are funded with national tax revenues yet only benefit a small, localized population. I estimate a labor market model based on Glaeser et al (1992) and Blumenthal, Wolman, and Hill (2009) These predecessor models were developed to examine the factors that drive employment in urban areas and rely upon a broad range of demographic characteristics to estimate Metropolitan Statistical Area (MSA) employment and Gross National Product (GNP). Their results suggest that business environment, natural amenities, and economic age are the main drivers of urban economic performance, all else being equal. The independent variables are “starting conditions” for change in employment level or GSP
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