The decentralization of welfare allows governments to experiment and create a variety of goods in response to differences in constituent pressures, institutional constraints, and resource constraints. An important measure of the performance of a state’s social safety net is how effective it is at protecting the less fortunate during a contracting economy. State governments influence social outcomes through fiscal policy and market conditioning (i.e. policies like minimum wage). Research finds that Democrats are more likely to spend on social welfare programs than Republicans and survey data found Democrats to be more likely to support an increase in social assistance after an economic downturn. However, it is difficult for policy makers to increase spending when the economy is contracting because most state spending is pro-cyclical. In other words, state governments increase spending during periods of economic growth and cut spending during periods of economic distress because of fiscal rules, such as balanced budget rules
This dissertation consists of three individual studies on the role of state governments in social welfare. The first paper discusses the relationship between gubernatorial administrative capacity and the ability for Democrats to increase social welfare spending after the state has experienced an economic downturn. Using panel data for 49 US states from 1987 to 2014, this dissertation examines whether budgetary authority allows governors to respond to an economic contraction in the expected partisan matter. Findings support the view that governors shape budget policy in a manner that is consistent with their preferences.
The second paper is on the decentralization of Medicaid and Aid to Families with Dependent Children (AFDC)/Temporary Assistance for Needy Families (TANF) by the national government to the state governments to see if the programs were made worse off in performing their goal of poverty alleviation. Decentralization is measured using expenditure ratios of state general fund spending to federal government spending. Evidence shows that more state involvement in Medicaid reduces expected poverty growth even after controlling for state economic, political, and demographic factors. Although no effect was found from AFDC/TANF decentralization, the results do demonstrate a positive impact from more state involvement in Medicaid.
The final study is on the impact of social assistance programs on infant health. Infant mortality rates are an important indicator of population health. The primary goal of this chapter is to serve as an evaluation of government redistributive programs and population health. Do the outputs of social assistance programs reach their intended beneficiaries? Findings show that increased Supplemental Nutrition Assistance Program (SNAP) and TANF benefit generosity within states has a negative association with overall infant mortality after controlling for economic development and additional factors related to infant health.
The overall contributions of this research are the following. First, this research explores the effects of state capacity on budget outlays under periods of duress. I hypothesize that budgetary authority allows governors, if they so choose, to respond quickly to the needs of citizens affected by an economic downturn by increasing social welfare spending. It tends to be Democrats compared to non-Democrats who make that choice. Furthermore, I suggest which programs become more effective in reducing poverty when state governments take on more responsibility. Finally, this research contributes to the scholarly literature by studying concepts related to constituent pressures, state capacity, the impact of decentralization on US state welfare programs, and an evaluation of social assistance generosity on health outcomes.
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