The private interest in public redistribution: A public choice view of the geographic distribution of federal funds

Abstract

Analysis of the geographic distribution of federal funds has. heretofore been limited to the relative share of the federal pie obtained by each state (Pack, 1982; Holcombe and Zardkoohi, 1981; Crain and Tollison, 1977; Stigler, 1976; Ritt, 1976). Data aggregation problems have effectively precluded any such analysis at the congressional district level. Detailed information on federal expenditures by county and city has been collected and aggregated on a congressional district basis by the House Information Services office (HIS) for Fiscal Years 1981 and 1982.1 In this paper I undertake a Lorenztype examination of the geographic distribution of federal funds, by congressional district, for Fiscal Year 1981. A substantial inequality in the distribution is revealed: the lowest thirty percent of the districts receive a total of only about ten percent of all federal expenditures while the top ten percent of the districts garner nearly twenty-three percent. Analysis of the determinants of federal funds appropriation reveals that the richest congressional districts are getting progressively richer, and vice-versa. Political influence of the individual congressional representative is shown to be a strongly significant determining factor in the distribution of expenditures. In Section 2, the categories of information collected by HIS are discussed, and I present the plotted Lorenz curve distribution of the flow of federal funds to congressional districts. Factors that influence success in obtaining a larger share of distributed federal funds are analyzed in Section 3, on theoretical, then empirical grounds. Concluding comments with respect to public policy issues are offered in Section 4.