Hostname: page-component-78c5997874-g7gxr Total loading time: 0 Render date: 2024-11-08T00:17:28.673Z Has data issue: false hasContentIssue false
  • English
  • Français

Financial Incentives in Vertical Diffusion: The Variable Effects of Obama's Race to the Top Initiative on State Policy Making

Published online by Cambridge University Press:  01 January 2021

William G. Howell  and
Asya Magazinni Open the ORCID record for Asya Magazinni [Opens in a new window]
William G. Howell
Affiliation:
The University of Chicago, Chicago, IL, USA
Asya Magazinni
Affiliation:
Princeton University, Princeton, NJ, USA
Get access Rights & Permissions [Opens in a new window]

Abstract

A substantial body of empirical work documents the influence of federal monies on state policy making. Less attention, however, has been paid to the conditioning effects of states' prior financial health. Nearly always, apportioned monies cover only a fraction of the costs of federal policy reforms. The capacity of states to deploy supplementary resources, therefore, may inform the willingness of states to comply with the federal government's policy objectives. Focusing on Barack Obama's Race to the Top (RttT) initiative, we present new evidence that state responses to federal initiatives that carry financial rewards systematically vary with the amount of resources already on hand. States that survived the Great Recession with their education budgets largely intact, we find, tended to implement more RttT reforms overall, and especially more reforms that required substantial up-front financial commitments. These patterns of policy adoptions can be meaningfully attributed to RttT, are not the result of either prior or ancillary policy trends, and speak to the general importance of accounting for what states already have, above and beyond what the federal government is willing to offer, when studying the financial incentives of vertical diffusion.

Keywords

executive politicseducation policyvertical diffusionpublic policyfederal/statefederalismpolitical economy
Type
Research Article
Information
State Politics & Policy Quarterly , Volume 20 , Issue 2 , June 2020 , pp. 185 - 212
Copyright
Copyright © The Author(s) 2019

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

Advisory Commission on Intergovernmental Relations. 1984. Regulatory Federalism: Policy, Process, Impact and Reform. Washington, DC: U.S. Government Printing Office.Google Scholar
Albritton, Robert B. 1989. “Impacts of Intergovernmental Financial Incentives on State Welfare Policymaking and Interstate Equity.” Publius: The Journal of Federalism 19 (2): 127–142.CrossRefGoogle Scholar
Allen, Mahalley D., Pettus, Carrie, and Haider-Markel, Donald P.. 2004. “Making the National Local: Specifying the Conditions for National Government Influence on State Policymaking.” State Politics & Policy Quarterly 4 (3): 318–344.CrossRefGoogle Scholar
Bahl, Roy W., and Saunders, Robert J.. 1965. “Determinants of Change in State and Local Government Expenditures.” National Tax Journal 18:50–57.Google Scholar
Benton, J. Edwin. 1992. “The Effects of Changes in Federal Aid on State and Local Government Spending.” Publius: The Journal of Federalism 22 (1): 71–82.Google Scholar
Chodorow-Reich, Gabriel. 2014. “The Employment Effects of Credit Market Disruptions: Firm-Level Evidence from the 2008-9 Financial Crisis.” Quarterly Journal of Economics 129 (1): 1–59.CrossRefGoogle Scholar
Chubb, John. 1985. “The Political Economy of Federalism.” American Political Science Review 79:994–1015.CrossRefGoogle Scholar
Clark, Benjamin Y., and Whitford, Andrew B.. 2011. “Does More Federal Environmental Funding Increase of Decrease States' Efforts?” Journal of Policy Analysis and Management 30 (1): 136–152.CrossRefGoogle Scholar
Daley, Dorothy M., and Garand, James C.. 2005. “Horizontal Diffusion, Vertical Diffusion, and Internal Pressure in State Environmental Policymaking, 1989-1998.” American Politics Research 33:615–644.CrossRefGoogle Scholar
Diamond, David. 2009. “The Impact of Government Incentives for Hybrid-Electric Vehicles: Evidence from US States.” Energy Policy 37 (3): 972–983.CrossRefGoogle Scholar
Dinan, John. 2014. “Relations between State and National Governments.” In The Oxford Handbook of State and Local Government, ed. Haider-Markel, Donald. New York: Oxford University Press, 2–31.Google Scholar
Dubnick, Mel, and Gitelson, Alan. 1981. “Nationalizing State Policies.” In The Nationalization of State Government, ed. Hanus, Jerome J.. Lexington: Lexington Books, 39–74.Google Scholar
Eyestone, Robert. 1977. “Confusion, Diffusion, and Innovation.” American Political Science Review 71:441–447.CrossRefGoogle Scholar
Goetz, Martin Richard, and Gozzi, Juan Carlos. 2010. “Liquidity Shocks, Local Banks, and Economic Activity: Evidence from the 2007–2009 Crisis.”.CrossRefGoogle Scholar
Greenstone, Michael, Mas, Alexandre, and Nguyen, Hoai-Luu. 2014. “Do Credit Market Shocks Affect the Real Economy? Quasi-Experimental Evidence from the Great Recession and ‘Normal’ Economic Times.” NBER Working Paper No. 20704..CrossRefGoogle Scholar
Guerrieri, Veronica, and Lorenzoni, Guido. 2011. “Credit Crises, Precautionary Savings, and the Liquidity Trap.” NBER Working Paper No. 17583..CrossRefGoogle Scholar
Hamilton, Christopher, and Wells, Donald T.. 1990. Federalism, Power, and Political Economy. Englewood Cliffs: Prentice Hall.Google Scholar
Harrison, Russell. 1975. “Federal Categorical Grants and the Stimulation of State-Local Expenditures.” Publius: The Journal of Federalism 5 (4): 123–136.Google Scholar
Hedge, David M. 1983. “Fiscal Dependency and the State Budget Process.” Journal of Politics 45 (1): 198–208.CrossRefGoogle Scholar
Howell, William, and Magazinnik, Asya. 2017. “Presidential Prescriptions for State Policy: Obama's Race to the Top Initiative.” Journal of Policy Analysis and Management 36 (3): 502–531.CrossRefGoogle Scholar
Kerosky, Sara. 2018. “Relaxing Federal Rules: Political Determinants of Targeted Leniency.” PhD dissertation, University of California, San Diego..Google Scholar
Leachman, Michael, and Mai, Chris. 2014. “Most States still Funding Schools Less than before the Recession.” Center on Budget and Policy Priorities..Google Scholar
Magazinnik, Asya. 2019. “Elective Enforcement: The Politics of Local Immigration Policing.” Working paper..Google Scholar
Mann, Elizabeth K. 2016. “Presidential Policymaking at the State Level: Revision through Waivers.” PhD dissertation, University of Michigan..Google Scholar
Manna, Paul, and Ryan, Laura L.. 2011. “Competitive Grants and Educational Federalism: President Obama's Race to the Top Program in Theory and Practice.” Publius: The Journal of Federalism 41(3):522–546.CrossRefGoogle Scholar
McCarty, Nolan, Poole, Keith, and Rosenthal, Howard. 2016. Polarized America: The Dance of Ideology and Unequal Riches. 2nd ed. Cambridge: MIT Press.Google Scholar
McGuinn, Patrick. 2010. Creating Cover and Constructing Capacity: Assessing the Origins, Evolution, and Impact of Race to the Top. Washington, DC: American Enterprise Institute for Public Policy Research.Google Scholar
Mian, Atif, and Sufi, Amir. 2011. “What Explains High Unemployment? The Deleveraging–Aggregate Demand Hypothesis.” University of California, Berkeley.CrossRefGoogle Scholar
Nicholson-Crotty, Sean. 2004. “Goal Conflict and Fund Diversion in Federal Grants to the States.” American Journal of Political Science 48 (1): 110–122.CrossRefGoogle Scholar
Nicholson-Crotty, Sean, and Staley, Tucker. 2012. “Competitive Federalism and Race to the Top Application Decisions in the American States.” Educational Policy 26 (1): 160–184.CrossRefGoogle Scholar
O'Brien, Thomas. 1971. “Grants-in-Aid: Some Further Answers.” National Tax Journal 24:65–77.Google Scholar
Osman, Jack W. 1966. “The Dual Impact of Federal Aid on State and Local Government Expenditures.” National Tax Journal 19:362–372.Google Scholar
Osman, Jack W. 1968. “On the Use of Intergovernmental Aid as an Expenditure Determinant.” National Tax Journal 21:437–447.Google Scholar
Peterson, Paul E., Rabe, Barry G., and Wong, Kenneth K.. 1986. When Federalism Works. Washington, DC: Brookings Institution Press.Google Scholar
Shoag, Daniel, and Veuger, Stan. 2016. “Uncertainty and the Geography ofthe Great Recession.” Journal of Monetary Economics 84:84–93.CrossRefGoogle Scholar
Smith, David. 1968. “The Response of State and Local Governments to Federal Grants.” National Tax Journal 21 (3): 349–357.Google Scholar
Sundquist, James L. 1969. Making Federalism Work. Washington, DC: The Brookings Institution.Google Scholar
Volden, Craig. 1999. “Asymmetric Effects of Intergovernmental Grants: Analysis and Implications for Welfare Policy.” Publius: The Journal of Federalism 29 (3): 51–73.CrossRefGoogle Scholar
Weiss, Elaine. 2013. “Mismatches in Race to the Top Limit Educational Improvement: Lack of Time, Resources, and Tools to Address Opportunity Gaps Puts Lofty State Goals Out of Reach.” Economic Policy Institute..Google Scholar
Welch, Susan, and Thompson, Kay. 1980. “The Impact of Federal Incentives on State Policy Innovation.” American Journal of Political Science 24 (4): 715–729.CrossRefGoogle Scholar
Wilde, James A. 1968. “The Expenditure Effects of Grant-in-Aid Programs.” National Tax Journal 21:340–348.Google Scholar
Supplementary material: PDF

Howell and Magazinni supplementary material

Appendix

Download Howell and Magazinni supplementary material(PDF)
PDF 2.1 MB