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Public Choice

, Volume 56, Issue 2, pp 121–130 | Cite as

State government purchases in a federalist economy

  • Steven G. Craig
  • Joel W. Sailors
Article

Abstract

This paper empirically examines the impact of state government purchasing preference laws on expenditures and revenue of individual states. Purchasing preferences allow firms located within a state to win state contracts without being the low bidder. We find that states with purchasing preference laws spend 3% more in real terms per capita than other states. Evidence is found indicating that the preferences require revenue increases to fund them (the tax base does not rise sufficiently), and that there is some apparent taxpayer resistance to these preferences. This evidence is consistent with a coalition model of state government behavior because it indicates there is significant redistribution of income between groups within the state.

Keywords

Public Finance State Government Individual State State Contract Real Term 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.

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Copyright information

© Martinus Nijhoff Publishers 1988

Authors and Affiliations

  • Steven G. Craig
    • 1
  • Joel W. Sailors
    • 1
  1. 1.Department of EconomicsUniversity of HoustonHouston

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