Claiming Credit in the U.S. Federal System: Testing a Model of Competitive Federalism

Based on the assumption that lawmakers can only claim credit for public goods they produce, models of intergovernmental political competition predict that states with less ability to pay for public goods will respond more favorably to the price effect of federal grants. We offer the alternative assumption that confusion over proper credit assignment allows state lawmakers to claim credit for federal production. This produces the expectation that lawmakers in states with low ability to pay will be more likely to let federal money supplant own source spending, assuming that they will be able to continue claiming credit even as their share of production decreases. We test these competing assertions in data on transportation production in the American states between 1971 and 1996.