Abstract
Policy outcomes contain important information about how public sector managers respond to economic innovation and balance electoral and policy goals of elected officials. This article examines the quarterly distribution of Small Business Administration (SBA) credit subsidies across 14 industries to test the link between loan guarantee activity and economic and political variables. Changes in the level of SBA guarantees are dependent on aggregate economic performance and the proximity of presidential elections. The analysis confirms that agency managers are compelled to balance programmatic goals with electoral goals. The results suggest that elected officials influence the timing and magnitude of credit subsidies to business but have little influence over the industry-level distribution of the subsidies.
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