Pork-barrel spending, term limits, and rainy-day funds: Three essays in political economy and fiscal federalism

This dissertation consists of three essays in political economy and fiscal federalism. The first essay addresses the question: Does pork-barrel spending by legislators increase the re-election probabilities of incumbents? The second essay explores the effect of term limits on intergovernmental grants. The third essay explores the relationship between state budget stabilization funds on state fiscal policy in the most recent economic recession.; Chapter 1, "The Impact of Federal Spending on U.S. Congressional Electoral Outcomes," uses a unique data set on federal-state transfers and U.S. elections. The simple relationship between federal grants (pork-barrel spending) and vote share is endogenous and non-monotonic.; To correct the endogeneity problem, the paper uses gross state product per capita, seat share of each legislator's party in the House and Senate, a dummy indicating if the current legislator is from the same party as the governor, a dummy indicating if the current legislator is from the same party as the president, a dummy if the legislator is a member of the House or Senate Appropriations Committee, and each legislator's age, tenure and margin of victory in the previous election as instruments for federal grants in a two-stage least squares estimate of the effect of grants on vote share. And, to address the non-monotonic relationship between the incumbent's probability of re-election and federal government spending, this paper divides the sample between swing districts (states), core Democratic districts (states), and core Republican districts (states).; Chapter 2, "Term Limits and Intergovernmental Grants", uses a data set on state-county transfers from California. The main contribution is to test the effect of term limits on intergovernmental grants. Term limits have been considered a means to minimize the inefficiencies caused by pork-barrel politics.; Chapter 3, "Have States Learned the Lessons from Their Last Fiscal Crisis? An Analysis of State Rainy Day Funds in the Most Recent Economic Recession," uses a unique data set on budget stabilization funds and other fiscal variables of every U.S. state. This paper estimates the dollar amount necessary such that the state had zero fiscal stress during the 1990--1991 recession, and then compares these figures with the rainy-day fund balances at the end of year 2000. (Abstract shortened by UMI.)...