Intra-elite Competition and Fiscal Development in the U.S. States

• In Event: Taxes as Tools or Threat for Political Elites

Abstract

This paper exploits an original database of state legislators in the US states, 1900-
2010, to perform the first empirical analysis of the relationship between historical levels
of intra-elite competition and state fiscal development over the long run. We argue that
historical competition between agricultural and capitalist elites helps shape key initial
decisions over fiscal size and structure. When legislators with a business or financial
background grow in power in state legislatures, we higher levels of fiscal development,
characterized by high overall taxation and tax progressivity. Where agricultural occupations
were dominant in a state legislature, we expect fiscal states characterized by low
overall taxation and tax regressivity. We show evidence for a positive, statistically significant,
and robust relationship between historical legislators and long-run state fiscal
development. This focus on intra-elite competition improves our understanding of the
fundamental determinants of cross-state fiscal differences today.

Authors

• Melissa Ziegler Rogers, Claremont Graduate University

• Pablo Beramendi, Duke University

• Traviss Cassidy, University of Michigan

• Mark Dincecco, University of Michigan