London School of Economics EOPP: Economic Organisation and Public Policy Programme LSE
EOPP: Economic Organisation and Public Policy Programme

Abstract for:

Do Small States Get More Federal Monies? Myth and Reality About the US Senate Malapportionment

Valentino Larcinese, Leonzio Rizzo, Cecilia Testa, April 2009
Paper No' EOPP 007: | Full paper (pdf)
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Keywords: federal budget; malapportionment, small state advantage, overrepresentation

JEL Classification: D72; H61; H77

Is hard copy/paper copy available? YES - Paper Copy Still In Print.
This Paper is published under the following series: Economic Organisation and Public Policy Discussion Papers
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Abstract:

We analyze the relationship between senate malapportionment and the allocation of the US federal budget to the states during the period 1978-2002. A substantial literature originating from the influential paper by ?) finds that small and overrepresented states get significantly larger shares of federal funds. We show that these studies suffer from fundamental identification problems and grossly overestimate the impact of malapportionment. Most of the estimated impact is not a scale but a change effect. Rather than evidence of ”small state advantage', we find that states with fast growing population are penalized in the allocation of the federal budget independently of whether they are large or small.