Writing Assignment 1 Topic

Journal of Public Economics 204 (2021) 104554
Contents lists available at ScienceDirect
Journal of Public Economics

journal homepage: www.elsevier.com/locate/jpube
Politics and the distribution of federal funds: Evidence from federal

legislation in response to COVID-19 q
Jeffrey Clemens a,c,d, Stan Veuger b,e,f,g,⇑
a
Department of Economics, University of California, San Diego, United States
b
American Enterprise Institute for Public Policy Research, United States
c
CESifo, Germany
d
NBER, United States
e
Department of Economics, Harvard University, United States
f
Center for the Governance of Change, IE School of Global and Public Affairs, Spain
g
Department of Economics, Tilburg University, The Netherlands
a r t i c l e i n f o a b s t r a c t
Article history: COVID-19 relief legislation offers a unique setting to study how political representation shapes the dis-
Received 13 August 2021 tribution of federal assistance to state and local governments. We provide evidence of a substantial
Revised 2 November 2021 small-state bias: an additional Senator or Representative per million residents predicts an additional
Accepted 5 November 2021
670 dollars in aid per capita across the four relief packages. Alignment with the Democratic party predicts
Available online 13 November 2021
increases in states’ allocations through legislation designed after the January 2021 political transition.
This benefit of alignment with a unified federal government operates through the American Rescue
Keywords:
Plan Act’s size and through the formulas it used to distribute transportation and general relief funds.
COVID-19
Fiscal federalism
Ó 2021 Elsevier B.V. All rights reserved.
Intergovernmental grants
Politics
State and local budgets
1. Introduction the extent to which the distribution of this aid is shaped by political,
as opposed to purely economic, considerations.
Fiscal transfers from the federal government to state and local During the pandemic, federal fiscal assistance has been dis-
governments play an important role In the US federal system. This tributed through a variety of channels, including general aid to
is particularly true during downturns, when balanced budget states, general aid to local governments, and aid appropriated for
requirements can pose sharply binding constraints on lower levels specific functions of state and local government. Further, direct
of government. During the COVID-19 pandemic, federal fiscal aid has been shaped by formulas that are designed at the discretion
assistance reached unprecedented levels, with aid to state and of the US Congress.2 We analyze the resulting distributions to gain
local governments spanning four legislative vehicles and summing insight into the channels through which political representation
to almost $1 trillion.1 The effectiveness of this fiscal assistance influences the distribution of federal funds.
depends in part on how it is targeted. It is thus of interest to know We find evidence of pervasive small-state bias across each of
the legislative vehicles. Adding across the four main pieces of leg-
islation, we estimate that having an additional Senator or Repre-
q
sentative per million residents predicts an additional $670
We are grateful to Philip Hoxie for excellent research assistance, and to Michael
Farquharson of the Committee for a Responsible Federal Budget for assistance in the dollars in combined state and local aid per capita. While this anal-
data collection process. We thank James Alt, Nora Gordon, Richard Grossman, as ysis relies on cross-sectional variations in representation across
well as reading group and seminar attendees at the Harvard Department of states, the evidence is quite strongly suggestive of a causal role
Government and the UC-San Diego Department of Economics for their thoughtful for small states’ disproportionate representation. The small-state
comments on an earlier draft of the paper. Declarations of interest: none.
⇑ Corresponding author at: 1789 Massachusetts Avenue NW, Washington, DC,
20036, United States. 2
This is not necessarily a given. As Wright (1974) notes in the context of the
E-mail address: stan.veuger@aei.org (S. Veuger). allocation of resources by the Works Progress Administration: In 1939 WPA
1
The 2009 American Recovery and Reinvestment Act (ARRA), for example, appropriations were cut back, and Congressional pressure forced the agency to state
included some $225 billion for three years of fiscal relief for state and local its allocative criteria much more explicitly (though it never quite revealed a precise
governments (Inman, 2010). formula).
https://doi.org/10.1016/j.jpubeco.2021.104554
0047-2727/Ó 2021 Elsevier B.V. All rights reserved.
J. Clemens and S. Veuger Journal of Public Economics 204 (2021) 104554
Panel A: States Divided into Terciles According to Senate and House Representaon Per Capita
Panel B: States Divided into Terciles According to the Democratic Party's Share of the Congressional
Delegaon
Fig. 1. Distribution of COVID Relief Funds per Capita by Bill. Panel A: States Divided into Terciles According to Senate and House Representation Per Capita. Panel B: States
Divided into Terciles According to the Democratic Party’s Share of the Congressional Delegation. Note: This figure shows funds per capita across the four COVID-19 bills for
states by type. Total education, relief, and transit funds are shown for the CARES Act, Families First Coronavirus Response Act, Response and Relief Act, and American Rescue
Plan Act on a per capita basis. Panel A groups states into terciles by the number of senators and representatives per million residents, with the 1st tercile containing the largest
states and the 3rd tercile containing the smallest states. Panel B groups states into terciles by the share of their congressional delegation that are Democrats, with the 1st
tercile containing less Democratic states and the 3rd tercile containing more Democratic states. This figure uses data from the Committee for a Responsible Federal Budget
(2021), US Federal Transit Administration (2021a, 2021b), Lewis (2021), US Census Bureau (2020), Chidambaram and Musumeci (2021), Medicaid and Chip Payment Access
Commission (2021), and US Office of Elementary and Secondary Education (2021).
bias we estimate is orthogonal to states’ partisan alignment, as Next, we examine the relevance of alignment with the party in
well as to variations in the pandemic’s impact on tax revenues, power by analyzing differences in the distribution of funds associ-
the labor market, and overall economic output. It is also orthogonal ated with the March 2021 American Rescue Plan Act (ARPA) rela-
to the baseline size of the state and local public sector, as well as to tive to legislation enacted by the previous congress. We show
proxies for the costs associated with land management. By way of that arrival of unified government predicts a non-trivial increase
comparison, an advantage of $670 per capita is 12.5 times the mag- in aid allocated to states whose delegations lean Democratic rather
nitude of the annual benefit of a district representative’s alignment than Republican. A fully Democratic delegation predicts a $300 per
with the party of the President in normal times, as estimated by capita increase in federal funds under unified Democratic control
Berry et al. (2010). of the federal government relative to the previous year’s divided
government.
A first set of contributions of our analysis is thus to add to the
extensive body of work on the consequences of partisan control.
3
While our focus here has been on the allocation of funds to the states, we plan on Papers in this literature have investigated some of the factors we
exploring the allocation of funds to congressional districts in future work.
2
Table 1
Summary Statistics.
N l r Min Max Total (Billions)

Total Funds per Capita 200 636 541 72 2,903 837
State Funds per Capita 200 321 249 29 2,160 422
Local Funds per Capita 150 420 334 56 1,354 415
Relief Funds per Capita 150 576 374 72 2,369 568
Transit Funds per Capita 150 76 66 4 361 194
Education Funds per Capita 150 197 141 28 573 75
Proportional Share of Total Funds 200 1 0.28 0.28 4.1
Proportional Share of State Funds 200 1 0.36 0.28 6.2
Proportional Share of Local Funds 150 1 0.34 0.28 2.2
Proportional Share of Relief Funds 150 1 0.31 0.28 5.1
Proportional Share of Transit Funds 150 1 0.84 0.04 4.3
Proportional Share of Education Funds 150 1 0.20 0.54 1.6
Senators and Reps per 1,000,000 200 1.6 0.42 1.3 5.2
Dem Congressional Share 200 0.53 0.35 0 1
Unified Control 200 0.25 0.43 0 1
Tax Shortfall per Capita 200 945 247 633 2,613
Average Q4 2020 Unemployment per Capita 200 0.03 0.01 0.02 0.05
Change in Personal Income Q42019 to Q42020 200 0.03 0.01 0.01 0.06
Total State and Local Spending per Capita 200 11,533 2,908 7,734 22,722
Acres of Federal Lands per Capita 200 1.9 15 0.003 305
Population Density 200 0.39 0.36 0.002 1.85
Note: This table presents summary statistics for the independent and dependent variables used in the main text for the panel sample that includes all four COVID-19 bills.
This table uses data from the Committee for a Responsible Federal Budget (2021), US Federal Transit Administration (2021a, 2021b), Lewis (2021), Whitaker (2020), US
Bureau of Labor Statistics (2021), US Census Bureau (2019a; 2020), US Bureau of Economic Analysis (2021), Chidambaram and Musumeci (2021), Medicaid and Chip Payment
Access Commission (2021), US Office of Elementary and Secondary Education (2021), and Vincent et al. (2020).
consider here, both at the federal level and at the state and local et al., 1995; Lee, 1998; Hauk and Wacziarg, 2007; Knight, 2008;
levels. The latter category includes work by Alt and Lowry Rodden, 2002). We contribute to this literature by showing that
(1994), Poterba (1994), Ansolabehere et al. (2002), Reed (2006), over-represented states were systematically advantaged across
Ferreira and Gyourko (2009), Bertocchi et al. (2020), and Dynes four high-stakes pieces of relief legislation. Prior work has focused
and Holbein (2020). on whether small states are advantaged by spending associated
At the federal level, there is prior evidence on the alignment of a with the normal course of Congressional business, in some cases
district or state’s delegation with the President (Berry et al., 2010) emphasizing broad categories of spending (Atlas et al., 1995; Lee,
and with the majority party (Albouy, 2013).3 There has also been 1998) and in other cases focusing on ‘‘earmarks” or ‘‘pork-barrel”
significant work on presidential efforts to maximize electoral votes spending (Hauk and Wacziarg, 2007; Knight, 2008).
(Wright, 1974) and on efforts to use federal spending to aid weak Furthermore, through additional pieces of analysis, we provide
incumbents (Bickers and Stein, 1996). A substantial body of addi- several novel advances to the literature on the mechanisms
tional research has analyzed the relationship between various through which shifts in political power translate into shifts in the
dimensions of political influence and the distribution of federal allocation of funds. A unique aspect of our setting is that we are
spending (Berry and Fowler, 2016; Knight, 2002), economic out- able to analyze four major pieces of legislation that serve the same
comes (Hodler and Raschky, 2014; Levitt and Poterba, 1999), and general purpose: to shore up the fiscal capacity of state and local
political or policy outcomes (Besley and Case, 2003; Levitt and governments as they responded to the COVID-19 pandemic. This
Snyder Jr, 1997). allows our analysis to focus on mechanisms other than variation
The findings from our analyses of the role of alignment with in legislative priorities, which have been found to be important
unified partisan control are consistent with these earlier analyses. elsewhere. For example, Albouy (2013) finds that Republicans have
Our focus on unified partisan control, as opposed to some of the a preference for defense and transportation contracts while Demo-
alternative power dynamics considered in prior research, is moti- crats have a preference for education dollars. Levitt and Snyder
vated by the specific change in political power that occurred dur- (1995) find large differences in fund disbursements at the end of
ing the COVID-19 pandemic. a period of Democratic control and highlight that these differences
Second, the findings from our analysis of disproportionate rep- can be driven by tweaked formulas, altered legislative priorities, or
resentation are also consistent with several prior analyses (Atlas a combination of both.
We shed additional light on the mechanisms through which
4 funds can be targeted by analyzing multiple legislative vehicles
The CARES Act contains funds allocated under the Coronavirus State and Local
Relief Fund that go to both state and local governments, funds allocated under the that target the same overall priority. We show that choice of
Elementary and Secondary Relief Fund (ESRF) that go to local governments, funds allocative formulas plays a major role. Relative to the CARES Act’s
allocated under the Governor’s Emergency Education Relief Fund (GEERF) and population-driven formula for allocating aid, for example, the
Innovation Grants that go to states, election funds allocated to states, and transit ARPA’s unemployment-driven formula shifts dollars towards
funds allocated under sections 5307 and 5311 formulas that go to localities. FFCRA
contains Medicaid matching funds that go to states. RRA contains funds allocated
states with either large pandemic-driven increases in unemploy-
under the ESRF that go to local governments, funds allocated under the GEERF that go ment or with high baseline rates of structural unemployment.
to states, transit funds allocated under sections 5307, 5310, and 5311 formulas to
localities, and section 133 formula transportation funds to states. ARPA contains
5
funds allocated under the Coronavirus State and Local Relief Fund that go to both We count independent members of congress as Democrats if they caucus with the
state and local governments, funds allocated under the ESRF that go to local Democrats. We count the Arizona Senate delegation as 50 percent Democratic in the
governments, funds allocated under the GEERF that go to states, transit funds 116th Congress (even though it was 100% Democratic and 100% Republican for a
allocated to localities using section 5307, 5310, and 5311 formulas as well as capital month or so each). We categorize Georgia’s two Senate seats as Democratic in the
investment grants, and Medicaid matching increases for uncompensated care (section 117th Congress. We classify CA-25 and NJ-2 as Republican seats in the 116th
9819) and community-based services (section 9817) that go to states. Congress.
3
Table 2
Estimates of Relationship between Total State and Local Funds per Capita and Congressional Control by COVID Bill.
CARES FFCRA RRA ARPA

(1) (2) (3) (4) (5) (6) (7) (8)
Senators and Reps per 1,000,000 370.9*** 407.3*** 51.88*** 62.05*** 7.379 25.52* 236.9*** 366.8***
(40.24) (41.36) (17.72) (22.53) (15.19) (14.77) (60.11) (50.49)
Dem Congressional Share 96.56** 93.31* 68.39* –33.03 64.66 87.10*** 393.9*** 123.7**
(44.77) (53.78) (35.98) (33.65) (38.99) (21.27) (108.8) (59.50)
Tax Shortfall per Capita 0.0227 0.142*** 0.0399 0.174
(0.108) (0.0467) (0.0279) (0.114)
Average Q4 2020 Unemployment 5,224* 15.56 2,597** 22,279***
per Capita (2,609) (1,513) (1,095) (3,020)
Change in Personal Income 1,110 1,789*** 1,566** 2,931*
Q42019 to Q42020 (1,049) (496.1) (614.5) (1,569)
Total State and Local Spending 0.0148 0.0238*** 0.0195*** 0.0503***
per Capita (0.009) (0.004) (0.004) (0.011)
Acres of Federal Lands per Capita 1.519*** 0.200 0.0201 0.374
(0.543) (0.317) (0.226) (0.620)
Log Population Density 37.47*** 14.63 15.53* 47.24**
(13.90) (12.19) (9.258) (18.90)
Observations 50 50 50 50 50 50 50 50
Note: This table uses data from the Committee for a Responsible Federal Budget (2021), US Federal Transit Administration (2021a, 2021b), Lewis (2021), Whitaker (2020a,
2020b), US Bureau of Labor Statistics (2021), US Census Bureau (2019a; 2020), US Bureau of Economic Analysis (2021), Chidambaram and Musumeci (2021), Medicaid and
Chip Payment Access Commission (2021), US Office of Elementary and Secondary Education (2021), and Vincent et al. (2020) to estimate equations of the following form for
the CARES Act, Families First Act, Recovery and Relief Act, and American Rescue Plan Act separately:
Bill Fundsi ¼ a þ cðRepresentativ es Per Million:Þi þ bðDem:Deleg:ShareÞi þ S i d þ ei
b
Where Bill Fundsi is the total funding to state and local government in state i and bill b. Representativ es Per Million:i is the total number of US representatives and US senators
b
divided by the population estimate for 2020 for state i in millions of people. Dem:Deleg:Sharei is the averaged share of state US representatives and US senators that are
members of the Democratic Party in state i. Columns 2, 4, 6, and 8 include S i , which is a vector of state-level controls. These include the predicted tax shortfall for state and
local governments divided by the state population, the average number of unemployed persons each month in the fourth quarter of 2020 per capita, the percentage change in
personal income between the fourth quarter of 2019 and the fourth quarter of 2020, the total direct expenditures from state and local governments per capita, the acres of
federal lands per capita, and the log of the population density for state i. ei is an error term. Observations are weighted by state population and standard errors are clustered
by state. Columns 1 and 2 report results for the CARES Act, Columns 3 and 4 report results for the Families First Coronavirus Response Act, Columns 5 and 6 report results for
the Recovery and Relief Act, and Columns 7 and 8 report results for the American Rescue Plan Act. Average total funds per person are $546, $257, $243, $1,499 for the CARES
Act, Families First Act, Recovery and Relief Act, and American Rescue Plan Act, respectively. *** p < 0.01, ** p < 0.05, * p < 0.1
These states lean disproportionately Democratic. In addition, while The paper proceeds as follows. Section 2 presents the data. Sec-
we find that unified Democratic control predicts a substantial shift tion 3 presents our empirical framework and analysis of small-
in transportation funds towards states with heavily Democratic state bias. Section 4 does the same for the consequences of unified
delegations, we find no such shift in education funds, where aid Democratic control after the 2020 elections. Section 5 concludes.
formulas are linked to pupil counts.
We also find the sheer magnitude of the ARPA’s fiscal assistance
package to be an important mechanism. Gauging the required size
of the ARPA’s fiscal assistance package requires drawing on analy- 2. Data
ses of the pandemic’s effects on state and local government
finances. The available analyses implied a need for an additional Our analysis is centered on four major pieces of legislation dur-
$100 to $200 billion at most (see e.g. Auerbach et al., 2020; ing the COVID-19 pandemic, each of which directed federal relief
Clemens et al. 2020; Whitaker, 2020b). Indeed, forecasts for states’ to state and local governments. These are the CARES Act, the Fam-
summer 2021 budgeting processes revealed substantial surpluses ilies First Coronavirus Response Act (FFCRA), the Response and
(Albright et al., 2021; Miller, 2021). While the ARPA’s funding for- Relief Act (RRA), and the American Rescue Plan Act (ARPA). Readers
mulas are only modestly more generous to Democratic-leaning interested in legislative histories can find a summary of key dates
states than were the formulas from the first three relief packages, in Appendix Fig. A1. For our purposes, the most crucial detail is that
the choice to allocate $500 billion rather than $100 to $200 billion the CARES Act, the FFCRA, and the RRA were passed by the 116th
accounts for much of the Democratic states’ $300 per capita advan- Congress and signed by President Trump, while the ARPA was
tage relative to Republican states. passed by the 117th Congress and signed by President Biden. Taken
Fourth, we contribute to the literature on state and local gov- together, these packages constituted a massive relief effort that
ernment budgets over the course of the pandemic. Initial papers provided as much as $6 trillion in income support to households,
in this literature sought to forecast the magnitudes of the revenue a mix of loans, grants, and tax relief to firms and non-profits, addi-
shortfalls faced by various levels of government within the United tional funding for (public) health efforts, and intragovernmental
States (Auerbach et al., 2020; Clemens and Veuger, 2020a, 2020b; grants to subnational governments. This final category includes
Chernick et al., 2020; Gordon et al., 2020; Whitaker, 2020a; 2020b). around $900 billion in funds for state, local, territorial, and tribal
Additional analyses have considered the pandemic’s implications governments, as well as the District of Columbia. We focus on
for spending needs (Gordon and Reber, 2020; Clemens et al., the first two types of subnational governments here, namely those
forthcoming). Analyses have also explored the effects of initial with full congressional representation.
state and local aid allocations on government employment
(Green and Loualiche, 2020). We offer the first detailed description 6
Might alternative weightings of Senators and Representatives yield different
of the determinants of federal allocations to state and local govern- results? We show in Appendix Table A2 that, when estimating equation (2), the t-
ments across all four major pieces of COVID-response legislation, statistics we obtain are quite similar when using variables that allow for alternative
which were of unprecedented scope. weightings. The predictive power of our measure of over-representation is not
sensitive to our choice of functional form.
4
Table 3
Panel Estimates of the Relationship between COVID Funds and Political Control by Level of Government.
Funds per Capita Proportional Share of Funds

Total State Counties and Educational Total State Counties and Educational
Municipalities Agencies Municipalities Agencies
(1) (2) (3) (4) (5) (6) (7) (8)
Unified Dem 338.2*** 189.4*** 209.4*** –23.00 0.0521 0.395*** 0.369* 0.0304**
Congressional (91.20) (45.09) (68.88) (33.26) (0.0631) (0.114) (0.198) (0.0126)
Share
Bill Fixed Effects Y Y Y Y Y Y Y Y
State Fixed Effects Y Y Y Y Y Y Y Y
Observations 200 200 150 150 200 200 150 150
Note: This table uses data from the Committee for a Responsible Federal Budget (2021), US Federal Transit Administration (2021a, 2021b), Lewis (2021), US Census Bureau
(2020), Chidambaram and Musumeci (2021), Medicaid and Chip Payment Access Commission (2021), and US Office of Elementary and Secondary Education (2021) to
estimate equations of the following form: Outcomecib ¼ a þ bðDem:Deleg:Share UnifiedÞib þ cðDem:Deleg:ShareÞib þ kb þ ki þ eib
Where Outcomecib is funding in category c in state i and bill b. Funds per capita for total funds, funds to state governments, funds to counties and municipalities, and funds to
educational agencies are the dependent variables in Columns 1 to 4, respectively. In Columns 5 to 8, Outcomecib is Proportional Share Of Billib , which is the ratio of state i’s share
of funding in category c to state i’s share of the US population in bill b. Columns 5, 6, 7, and 8 show this proportional share of funds for total funds, funds to state governments,
funds to counties and municipalities, and funds to educational agencies, respectively. Dem:Deleg:Shareib is the averaged share of state US representatives and US senators that
are members of the Democratic Party in state i when bill b was passed. Unifiedb is a dummy that takes a value of 1 when the Democratic Party assumes unified control of the
US House, Senate, and Presidency in 2021. We interact this dummy variable with Dem:Deleg:Shareib . kb and ki represent state and bill fixed effects, respectively. eib is an error
term. Observations are weighted by state population and standard errors are clustered by state. Average funds per capita across all four bills are $615, $399, $287 for total,
state, and local funds, respectively. All proportional shares average to 1. *** p < 0.01, ** p < 0.05, * p < 0.1
We use data from the Committee for a Responsible Federal capita basis and are divided into general relief funds, transporta-
Budget (2021) to summarize the funds each bill appropriated to tion funds, and education funds. Panel A provides an initial look
state and local governments. We complete these data with infor- at bias in favor of small states, which benefit from over-
mation from several sources. We obtain information on the distri- representation in the US Congress. The small-state bias emerges
bution of transit funds for the RRA and ARPA from the US Federal primarily through general relief funds, which were distributed
Transit Administration (2021a, 2021b). Data on the allocation of through formulas featuring floor functions. Panel B provides an ini-
ARPA assistance to non-public schools come from the US Office tial sense of partisan advantage. It is apparent that transportation
of Elementary and Secondary Education (2021). We obtain esti- dollars skew towards Democratic leaning states, that education
mates of ARPA section 9817 matching increases from dollars exhibit very little partisan skew, and that general relief dol-
Chidambaram and Musumeci (2021). We approximate the alloca- lars exhibited a strong partisan skew under the ARPA, but not in
tion of ARPA section 9819 federal matching funds for uncompen- the earlier pieces of legislation. The maps in Fig. A2 reinforce both
sated care using FY2021 estimates of federal disproportionate of these initial impressions.
share hospital allotments by state from the Medicaid and Chip Our analysis focuses on two types of dependent variables. The
Payment Access Commission (2021). We then present these data first type expresses each bill’s funding on a per capita basis. The
as funds directed to state governments, funds directed to state second type focuses on how each states’ share of each bill’s funding
and local educational agencies, and funds directed to other local compares with its share of the national population. We construct
governments.4 The funds can also be divided across three functional this proportional share of funds for each state in each bill as
categories, namely transportation funds, education funds, and gen- follows:
eral fiscal assistance (defined here to include all other fiscal P
Fundsib = i Fundsib
assistance). Proportional Share Of Billib ¼ P ð1Þ
Popi = i Popi
Fig. 1 provides an initial look at the distribution of funds across
the four pieces of legislation. Dollar values are expressed on a per
Table 4
Panel Estimates of the Relationship between COVID Funds and Political Control by Type of Funds.

Relief Transit Education Relief Transit Education
(1) (2) (3) (4) (5) (6)
Unified Dem Congressional Share 248.1*** 77.86*** –22.76 0.155** 0.750*** 0.00239
(50.55) (20.03) (32.75) (0.0767) (0.195) (0.0139)
Bill Fixed Effects Y Y Y Y Y Y
State Fixed Effects Y Y Y Y Y Y
Observations 150 150 150 150 150 150
This table uses data from the Committee for a Responsible Federal Budget (2021), US Federal Transit Administration (2021a, 2021b), Lewis (2021), US Census Bureau (2020),
Chidambaram and Musumeci (2021), Medicaid and Chip Payment Access Commission (2021), and US Office of Elementary and Secondary Education (2021) to estimate
equations of the following form: Outcomecib ¼ a þ bðDem:Deleg:Share UnifiedÞib þ cðDem:Deleg:ShareÞib þ kb þ ki þ eib
c
of funding in category c to state i’s share of the US population in bill b. Columns 4, 5, and 6 show this proportional share of funds for relief, funds to transit, and funds to
education, respectively. Dem:Deleg:Shareib is the averaged share of state US representatives and US senators that are members of the Democratic Party in state i when bill b
was passed. Unifiedb is a dummy that takes a value of 1 when the Democratic Party assumes unified control of the US House, Senate, and Presidency in 2021. We interact this
dummy variable with Dem:Deleg:Shareib . kb and ki represent state and bill fixed effects, respectively. eib is an error term. Observations are weighted by state population and
standard errors are clustered by state. Average funds per capita across all four bills are $576, $76, and $197 for relief, transit, and education funds, respectively. All
proportional shares average to 1. *** p < 0.01, ** p < 0.05, * p < 0.1
5
In Eq. (1), Fundsib is the amount of money allocated to state i in four legislative vehicles. Specifically, it presents estimates of the
bill b, and Popi is the 2020 population in state i. When following equation:
Proportional Share Of Billib is greater than 1, a state has received a
b
disproportionately large share of the funds in bill b. Bill Fundsi ¼ a þ bðDem:Deleg:ShareÞi
Our main independent variables relate to the distribution of
þ cðRepresentativ es Per MillionÞi þ S i d þ ei : ð2Þ
power at the federal level. We use data from Lewis (2021) to con-
struct the share of House and Senate seats held by each political In Eq. (2), Bill
b
Fundsi
is the total per capita funding to state and
party in the 116th Congress and the 117th Congress. We then aver- local governments in state i from bill b. Dem:Deleg:Sharei is the
age the Democratic Party’s share of House and Senate seats in each averaged share of state US representatives and US senators that
state to construct the Democrats’ congressional share.5 Values for are members of the Democratic Party in state i.
the 116th Congress map to the CARES Act, FFCRA, and RRA, and val- Representativ es Per Millioni is the total number of US representa-
ues for the 117th Congress map to ARPA. We use a second political tives and US senators divided by the population of state i.6 This
variable that interacts the Democratic party share with a dummy variable varies primarily with the US Congress’s relative over-
that takes a value of 1 in the 117th Congress, signifying the switch representation of small states, which is particularly strong in the
to unified Democratic Party control of the House, Senate, and Presi- Senate. S i is a vector of additional state-level covariates. These
dency. Our third political variable measures small-state bias using include the predicted per capita tax shortfall for state and local gov-
the total number of US Senate and House seats per 1,000,000 state ernments as estimated by Whitaker (2020a, 2020b), the average
residents. Smaller states generally have more representatives per number of unemployed persons per capita during the fourth quarter
1,000,000 people, which reflects their disproportionate representa- of 2020, the percentage change in personal income between the
tion in the Senate and, to a lesser degree, in the House. fourth quarter of 2019 and the fourth quarter of 2020, the per capita
A second set of independent variables describes the economic total direct expenditures of state and local governments, and the
shocks and fiscal projections that contributed to estimates of states’ fis- acres of federal lands per capita. ei is an error term. Standard errors
cal needs as driven by the pandemic. To proxy for state-specific rev- are robust to heteroskedasticity. For our primary estimates, observa-
enue shocks, we add Whitaker’s (2020b) estimates of the realized tions are weighted by state population. Appendix Table A4 reveals
decline in state and local government revenues in fiscal year 2020 to that we obtain similar results when we weight observations equally.
the projected revenue loss in fiscal year 2021. For the latter, we use esti- To be clear, estimates of Eq. (2) provide descriptive evidence on
mates from Whitaker’s slow recovery scenario. Note that Whitaker’s the correlates of federal funding. Interpretating c as a causal effect
combined estimate of state and local government revenue losses, span- of small states’ over-representation would require that
ning the 2020 and 2021 fiscal years, is $312 billion, which is far less Representativ es Per Millioni be exogenous and hence uncorrelated
than the $900 billion ultimately allocated by the federal government. with the error term, ei . This assumption could be violated, for exam-
To measure the unemployment shock from the pandemic, we purpose- ple, if state population is systematically correlated with relevant
fully adopt the ARPA’s formula for distributing general relief, which is a political factors or with other factors that, in the eyes of Congress,
function of the average number of unemployed persons per capita dur- merited additional federal funds. While the exogeneity assumption
ing the fourth quarter of 2020 (US Bureau of Labor Statistics, 2021). cannot be proven, what we are able to show is that the relationship
Finally, we proxy at a broad level for declines in economic activity using we observe is orthogonal to a rich set of covariates we can add to S i .
the percent change in total personal income between the fourth quar- Columns 1 and 2 of Table 2 report results for the CARES Act, Col-
ter of 2019 and the fourth quarter of 2020. umns 3 and 4 report results for the FFCRA, Columns 5 and 6 report
Our final pair of independent variables describe the outlays of results for the RRA, and Columns 7 and 8 report results for the
state and local governments. We use the 2018 Survey of State ARPA. The most striking finding in Table 2 is the evidence that
and Local Government Finances (US Census Bureau, 2019a) to over-represented states have benefited disproportionately from
sum together direct expenditures of state and local governments. federal dollars. Over-represented states have received more federal
We also use the total acres of federal land by state, as reported dollars per resident than have under-represented states in all four
in Vincent et al. (2020), to proxy for needs associated with federal of the COVID-19 fiscal relief packages, though the estimates are not
lands under direct control of the federal government. We report statistically distinguishable from zero for the RRA.
both variables on a per capita basis. How large is the small-state bias we estimate? An additional rep-
Table 1 presents summary statistics on the full set of variables resentative per million residents predicts an additional $670 to $780
that are utilized in our analysis. Note, as can be seen in Fig. 1, that per state resident across the four pieces of legislation. This is the
not all forms of relief appeared in all four pieces of legislation. Con- advantage, for example, of Montana’s roughly 1 million residents,
sequently, some of the fiscal variables we analyze are associated who enjoy representation from 2 Senators and 1 representative, rel-
with 150 observations, while others are associated with 200 obser- ative to Arkansas’s roughly 3 million residents, who enjoy only 2
vations. Additional details on the definitions of key variables can be representatives per million on account of their 2 Senators and 4 rep-
found in Appendix Table A1. resentatives. Note that $670 per capita is quite large in comparison
with related effects as estimated in the literature on distributive pol-
3. Small-state bias itics. For example, it is 12.5 times the magnitude of the annual ben-
efit of a district’s alignment with the party of the President, as
In this section we commence our empirical analysis by sepa- estimated by Berry et al. (2010).7 The estimates are suggestive that
rately analyzing each of the CARES Act, the FFCRA, the RRA, and
6
the ARPA. Table 2 presents descriptive evidence on the predictors Might alternative weightings of Senators and Representatives yield different
of the distribution of federal funds, across states, for each of these results? We show in Appendix Table A2 that, when estimating equation (2), the t-
statistics we obtain are quite similar when using variables that allow for alternative
weightings. The predictive power of our measure of over-representation is not
5
We count independent members of congress as Democrats if they caucus with the sensitive to our choice of functional form.
7
Democrats. We count the Arizona Senate delegation as 50 percent Democratic in the Berry et al. (2010) write: districts receive on average $575 million each year in
116th Congress (even though it was 100% Democratic and 100% Republican for a high-variation program spending. The estimated 4% reward for the president’s co-
month or so each). We categorize Georgia’s two Senate seats as Democratic in the partisans, therefore, amounts to about $23 million annually per district, or roughly
117th Congress. We classify CA-25 and NJ-2 as Republican seats in the 116th $40 per capita [in 2006 dollars]. Inflation adjusted, this yields an estimate of $53 per
Congress. capita, or roughly 1/12th our $670 estimate.
6
equal representation would have shifted some $30 billion away from tions beyond what one would have predicted based on the legisla-
small states across the four legislative vehicles.8 tive vehicles that were passed under divided government. Note
To what extent can we provide evidence on the potential biases that our interest is not in whether one set of allocations aligns better
discussed above? A comparison of the sparse specifications in with either objective assessments of need or subjective assessments
Table 2 with the specifications that include additional covariates of socially desirable priorities. Instead, our interest is in understand-
reveals that the correlation between over-representation and fed- ing the extent to which alignment with unified government predicts
eral dollars is orthogonal to states’ revenue shocks, economic changes in states’ allocations.
shocks, the size of their public sector, acreage of federal land, and Table 3 sorts funds according to the type of state or local govern-
population density. While we cannot fully rule such factors out, ment that received the funds. The categories of funds in Table 3 are
analyses in our appendix materials provide additional evidence the total funds for state and local governments (Columns 1 and 5),
that variations in states’ needs are not a leading factor behind state governments (Columns 2 and 6), counties and municipalities10
the small-state biases we estimate.9 (Columns 3 and 7), and educational agencies (Columns 4 and 8). The
The sparse specifications in Table 2 reveal that federal fiscal assis- dependent variables in Columns 1 through 4 are expressed in dollars
tance has tended to be positively correlated with the Democratic per state resident. The dependent variables in Columns 5 through 8 are
Party’s share of each state’s congressional delegation. Column 7 expressed as the ratio of the state’s share of funds in category c relative
shows that this correlation was particularly strong in the ARPA. This to its share of the country’s total population. Table 4 follows a similar
set of correlations, however, is sensitive to whether we include the structure, but with funds allocated according to their functional cate-
more extensive set of covariates in the regression. Among these other gories: general relief funds (Columns 1 and 4), transit funds (Columns
covariates, the strongest and most consistent correlate of federal dol- 2 and 5), and education funds (Columns 3 and 6).
lars is the unemployment variable, which has particularly strong pre- The results in Table 3 and 4 provide evidence on a nuanced set of
dictive power for dollars allocated through the ARPA. These channels through which political representation can shape the distri-
correlations are consistent with a targeting of states which had high bution of federal funds. First, the estimate in Column 1 of Table 3 indi-
unemployment rates, which may have been amplified by the newly cates that the ARPA directed more funds towards states with heavily
increased power of those states’ representatives. It is to the role of Democratic delegations compared to the CARES Act, the FFRCA, and
the shift in federal power that we turn in the following section. the RRA. Relative to states with entirely Republican delegations, res-
idents of states with entirely Democratic delegations are predicted to
receive, on average, over $300 per capita more through ARPA than we
4. Partisanship
would have predicted had control over Congress and the executive
branch not been unified in Democratic hands.11
Our analysis of the relationship between partisan political repre-
Through what mechanisms did the ARPA shape the distribution of
sentation and the distribution of fiscal assistance across states takes
federal funds relative to earlier pandemic relief legislation? The addi-
advantage of the sharp change in partisan control that occurred fol-
tional funds could be driven by the ARPA’s sheer magnitude, by the for-
lowing the November 2020 election and subsequent Senate runoff
mulas through which those funds were distributed, or by its allocation
elections. In these elections, the Democratic Party secured control
across functional categories and levels of government. We provide evi-
of the Senate and the White House, in addition to the House of Rep-
dence on these mechanisms through several pieces of analysis.
resentatives. This change enables us to estimate panel specifications
In Columns 2 through 4 of Table 3, we divide federal fiscal assis-
that control for all time-invariant factors that may differ across tance into funds directed to state governments, funds directed to
states. The estimates presented in Table 3 and 4 are of equations of
local governments within each state, and funds directed to educa-
the following form: tional agencies for distribution to school districts, charter schools,
and other recipients. We find that the state and non-educational
Outcomecib ¼ cðDem:Deleg:Share UnifiedÞib
local components of federal aid drive the overall ARPA advantage
þ bðDem:Deleg:ShareÞib þ kb þ ki þ eib ð3Þ for states with more heavily Democratic delegations. Funding for
educational agencies, in contrast, do not differ significantly
In Eq. (3), Outcomecib
represents fiscal outcomes in funding cat-
between states with different rates of Democratic representation.
egory c in state i and bill b. We analyze two outcomes of interest,
In Columns 5 through 8 of Table 3 we analyze the extent to
namely federal dollars per capita and the Proportional Share of Bill
which states received a disproportionate share of each bill’s fiscal
variable described by Eq. (1).
relief. That is, we estimate Eq. (3) using the dependent variable
The primary coefficient of interest in Eq. (3) is c, which describes
described by Eq. (1). This variable is increasing in the extent to
the degree to which alignment with the unified Democratic majority
which a state’s share of federal funds exceeds its share of the
predicts increases in federal funding. That is, estimates of c will
national population. Column 5 of Table 3 reveals that, on a propor-
reflect the degree to which ARPA’s funding priorities and/or funding
tional basis, the distribution of ARPA funds was only modestly
formulas allocated dollars towards states with Democratic delega-
more tilted towards states with Democratic party delegations than
were previous bills. In the aggregate, this indicates that the signif-
8
To arrive at this number, we first calculate the absolute deviation of each state’s
icant increases in relief funds associated with unified party control
averaged number of members of Congress per million residents from the weighted
mean across states. We multiply this number by the coefficient in Column 7 of
were driven primarily by the magnitude of ARPA relief relative to
Appendix Table A5 to arrive at the impact per resident per bill. We then aggregate relief in the earlier bills. Although the aggregate masks substantial
across bills and states to estimate a grand total of $29.9 billion. shifts in the distribution of funds within key functional categories,
9
Table A3 provides evidence that RepresentationPerCapi and Dem:Deleg:Share are Democratic states did not receive dramatically larger shares of
roughly independent of one another. Table A4 reveals that the small-state bias is not
ARPA funds than they received from the earlier bills.
particularly sensitive to whether we weight observations according to states’
populations. For Table A5, we stack observations for the four pieces of legislation
and demonstrate that our results are insensitive to adding each of the covariates from
our more heavily controlled specifications one at a time. Fig. A3 shows further that
10
the relationship between representation per capita and fiscal assistance per capita is This category also includes other local governments that are not recipients of
quite strongly linear (Panel A), while the relationship between population and fiscal funds from state educational agencies, such as utility districts.
11
assistance per capita is decidedly non-linear (Panel B). Tables A6 and A7 use a logged Appendix Table A8 shows that we estimate a moderately smaller differential of
representation variable to provide evidence that the estimates in Tables 2 and A5 are just under $200 when we weight observations equally rather than weighting
not driven by the representation variable’s skewness. according to state population.
7
Because Democratic states are modestly advantaged by the total- of CARES Act, RRA, and ARPA transportation dollars. This formula
ity of state and local aid, a larger bill will mean more dollars per res- is driven to a significant degree by estimates of bus mileage and
ident of Democratic states than of Republican states. Interpreting skews quite strongly towards states with Democratic party delega-
the magnitude of ARPA relief requires drawing on estimates of state tions. The lack of a partisan distribution in education dollars simi-
and local government needs. By the time the ARPA had been drafted, larly reflects the underlying allocation formulas. These formulas,
essentially all analysts had arrived at the conclusion that only mod- principally those of Title I, Part A of the Elementary and Secondary
est additional fiscal relief was needed (see e.g. Auerbach et al., 2020; Education Act, place a heavy weight on headcounts of eligible chil-
Clemens et al., 2020; Whitaker, 2020b; DeGroot et al., 2021; dren, who are typically children from low-income households.
Lincicome, 2021; Walczak, 2021). Estimates of remaining need
would have implied a relief package similar in magnitude to the
state and local relief found in the CARES, RRA, and FFCRA. The 5. Discussion
ARPA’s $500 billion in aid thus exceeded even the largest estimates
of remaining need. These analyses have been borne out by subse- An important question in both the political economy and polit-
quent forecasts for states’ budgets. The ARPA’s magnitude should, ical science literatures is how changes in the distribution of federal
in this sense, be interpreted as a political choice, and one that pre- funds are achieved. That is, what are the legislative mechanisms
vious analyses in the literature on distributive politics would have through which changes in the distribution of funds emerge? As
struggled to detect. This is because analyses in the literature do past research has pointed out, key mechanisms can include
not typically have directly applicable measures of the amount of agenda-setting power, standard legislative logrolling, and a gov-
need associated with specific legislative priorities. erning party’s ability to advance agendas with policy priorities that
Columns 6 through 8 of Table 3 reveal that the ARPA’s overall dis- target their constituents’ needs and pocketbooks. Our context is of
tribution masks substantial shifts in the distribution of funds for edu- interest in part because it provides an opportunity to assess dis-
cational agencies versus other state and local government entities. tributive politics in the context of multiple, salient pieces of legis-
The ARPA’s state government relief and, to a lesser extent, the funds lation with substantial funds dedicated to the same broad end,
distributed to counties and municipalities, shifted substantially support for state and local governments.
towards Democratic states relative to funds from the earlier bills. In Our analysis reveals an important role not just for the distribution
contrast, the ARPA’s relief for educational agencies shifted slightly of funds in specific legislative vehicles, but also for their size. That is,
towards Republican states relative to funds from earlier bills. we find that the change in federal control shifted the distribution of
Table 4 presents results in which we divide federal relief funds ARPA dollars only slightly toward states aligned with the newly uni-
according to their functional purpose rather than according to the fied federal government. The ARPA’s size relative to the 2020 pack-
government entity that received them.12 Results in Columns 1 and ages is what induced larger absolute transfers to politically aligned
4 describe the distribution of general relief funds, while Columns 2 states than did the previous packages (Tables 3 and 4). This is reminis-
and 5 describe transportation funds and Columns 3 and 6 describe cent of the mechanism through which the U.S. fiscal system can be at
education funds. Columns 1 through 3 analyze spending expressed the same time both more progressive and less redistributive than the
in dollars per state resident while Columns 4 through 6 are systems of other OECD countries: simply by being smaller (Slavov and
expressed in terms of each state’s share of funds relative to its share Viard, 2016). Analyses of how the budgetary pie is distributed will
of the country’s population. typically fail to detect this particular mechanism.
Columns 1 and 2 reveal that the shift in the distribution of dol- Our other main result is more in line with previous work in this
lars was driven primarily by general relief funds. Columns 4 and 5 area: representation, and in particular the overrepresentation of
convey, in contrast, that the proportional distribution of transit small states, matters quite meaningfully for the distribution of fed-
dollars shifted much more heavily towards Democratic states eral funds across states and localities. We find this small-state bias
under the ARPA than did general relief funds. These results are tied to be of substantial economic significance: having an additional
together by the fact that general relief funds account for a much Senator or Representative per million residents predicts an addi-
larger share of overall fiscal assistance than do transportation tional $670 dollars in aid per capita across the four relief packages
funds, as shown earlier in Fig. 1. In contrast with general relief combined. This is equivalent to 2% of U.S. income per capita (U.S.
and transportation dollars, we find no evidence of a shift in the par- Census Bureau, 2019b). Across all four bills, we estimate that the
tisan skew of education dollars. Indeed, as shown earlier in Fig. 1, small-state bias altered the allocation of around $30 billion in relief
education dollars were distributed evenly across the states in each funds, which is equivalent to the funding this same legislation allo-
of the legislative vehicles in which they appeared. cated to Pfizer, Moderna, the GAVI Vaccine Alliance, Regeron, John-
What legislative mechanisms drive these shifts in the distribu- son & Johnson, AstraZeneca, GlaxoSmithKline, Eli Lily and
tion of funds? An inspection of the legislation reveals that shifts in Company, Merck, and Novavax for the development, manufactur-
fiscal relief were largely driven by formula design. With respect to ing, and distribution of COVID-19 vaccines and therapeutics.
general relief funds, the ARPA’s unemployment-driven formula The impacts of representation on the distribution of funds can
steered dollars to states with high levels of unemployment, which be viewed as deviations from the core purpose of fiscal relief,
reflect a mix of pre-pandemic and pandemic-driven factors. Among which is to stabilize state and local budgets in the face of macroe-
the nation’s most populous states, for example, Democratic- conomic shocks. In the U.S. context, automatic stabilizers for state
leaning New York and California have had unemployment rates and local government budgets flow primarily through the Medi-
well above the national average, while Republican leaning Texas caid and Unemployment Insurance programs. Such mechanisms
has been quite close to the national average and Florida has been have the benefit of reducing the need for ad hoc, and potentially
well beneath it. The allocation of transportation funds is more politicized, policy making when negative shocks occur. At the same
complicated, as it reflects a combination of formula-driven and dis- time, the design of automatic stabilizers involves choices that are
cretionary allocations. The Section 5307 Urbanized Area Appor- less straightforward than their proponents sometimes imply, and
tionment formula, for example, was used to allocate a large share that must also be designed through the political process. Whether
automatic or ad hoc stabilizers better target the jurisdictions with
greatest needs depends on the mix of economic and political fac-
12
Appendix Table A9 shows similar results when we weight observations equally tors that shape their design, as well as the nature of the shocks
rather than weighting according to state population. face.
8
Appendix A See Tables A1-A9.
See Figs. A1-A3.
Fig. A1. Legislative Timeline for COVID Relief Bills with State and Local Government Relief Funds.
Fig. A2. Distribution of Total Funds to State and Local Governments per Capita in Quintiles by Bill. Note: This figure shows the quintiles of total state and local government
funds per capita for the 50 US states by bill. The quintiles are shown for the CARES Act, Families First Act, Recovery and Relief Act, and American Rescue Plan Act in panels A, B,
C, and D respectively. The total state and local government funds are from Committee for a Responsible Federal Budget (2021), Chidambaram and Musumeci (2021), Medicaid
and Chip Payment Access Commission (2021), US Office of Elementary and Secondary Education (2021), US Federal Transit Administration (2021a, 2021b) and population
estimates for 2020 come from US Census (2020).
9
Panel A: Federal Funding and Congressional Representation Per State Resident
Panel B: Federal Funding and State Population
Fig. A3. Relationships between Federal Funding, Congressional Representation, and Population. Panel A: Federal Funding and Congressional Representation Per State
Resident. Panel B: Federal Funding and State Population. Note: Panel A shows the relationship between representation per state resident and federal funds per state resident.
Panel B shows the relationship between state population and federal funds per state resident. Population is presented on a log scale. Federal funding is the sum of state and
local fiscal assistance across the CARES Act, Families First Act, Recovery and Relief Act, and American Rescue Plan Act. Small states are defined as in Fig. 1 of Green and
Loualiche (2020), whose focus was on the relationship between population and allocations of general fiscal assistance through the CARES Act. These small states received the
CARES Act’s minimum allocation of $1.25 billion.
10
Table A1
Variable Descriptions.
Variable Description Source

Bill Funds per Capita Funds appropriated to each state by Congress in COVID-19 relief bills Committee for a Responsible Federal Budget (2021); US Federal
divided by the 2020 state population. Transit Administration (2021a, 2021b); US Census Bureau (2020);
Chidambaram and Musumeci (2021); Medicaid and Chip Payment
Access Commission (2021); US Office of Elementary and
Secondary Education (2021)
Proportional Share The share of funds allocated in each bill for each state divided by the state’s Committee for a Responsible Federal Budget (2021); US Federal
of Bill Funds share of the national population. Transit Administration (2021a, 2021b); US Census Bureau (2020);
Chidambaram and Musumeci (2021); Medicaid and Chip Payment
Access Commission (2021); US Office of Elementary and
Secondary Education (2021)
Dem Congressional The average of the share of House seats for Democrats and the share of Lewis (2021)
Share Senate seats for Democrats in each state.
Senators and Reps Number of House plus the number of Senate seats per 1,000,000 people in US Census Bureau (2020), Lewis (2021)
per 1,000,000 each state.
Unified A dummy that takes a value of 1 when the Democrats gained unified Lewis (2021)
control of the government in the 117th Congress.
Tax Shortfall per Estimated tax shortfall for state and local governments divided by the Whitaker (2020a, 2020b)
Capita population in each state.
Average Q4 2020 Average number of unemployed persons in each state between November US Bureau of Labor Statistics (2021); US Census Bureau (2020)
Unemployment 2020 and December 2020 divided by the population.
per Capita
Change in Personal The percent change in real personal income between Q4 2019 and Q4 2020 US Bureau of Economic Analysis (2021)
Income Q42019 in each state. Personal income is deflated by the personal consumption
to Q42020 expenditures chained price index (PECEPI).
Total State and Local The total direct expenditures of state and local governments in each state US Census Bureau (2019a, 2019b)
Spending per divided by the population in that state.
Capita
Acres of Federal The total acreage of federal lands in each state divided by the population of Vincent et al. (2020)
Lands per Capita that state.
Population Density The total state population divided by total state area in acres. Vincent et al. (2020); US Census Bureau (2020)
Table A2
Estimates of the Relationship Between Total State and Local Funds per Capita and Congressional Control with Alternate Weights Placed on State Congressional Representation
Across COVID Bills.
Total Funds per Capita

(1) (2) (3) (4) (5) (6)
Adjusted Senators and Reps per 1,000,000 165.0*** 56.16*** 24.04*** 12.93*** 8.840*** 6.218***
(5.780) (5.453) (5.293) (5.231) (5.208) (5.193)
Dem Congressional Share 155.7*** 165.9*** 168.8*** 169.8*** 170.1*** 170.4***
(3.102) (3.326) (3.395) (3.419) (3.428) (3.434)
Observations 200 200 200 200 200 200
Ratio of Senators to Representatives 1:1 3:1 7:1 13:1 19:1 27:1
estimate equations of the following form: Bill Fundsib ¼ a þ cðAdjusted Representativ es Per MillionÞi þ bðDem:Deleg:ShareÞib þ kb þ eib
Where Bill Fundsib is the total funding to state and local government in state i and bill b per capita. Adjusted Representativ es Per Millioni is the total number of US represen-
tatives and US senators divided by the population estimate for 2020 for state i in millions of people in Column 1. In Columns 2 through 6, the weight placed on US senators is
increased, with Column 6 weighting the number of US senators 27 times more than the number of US representatives. Dem:Deleg:Sharei is the averaged share of state US
representatives and US senators that are members of the Democratic Party in state i. kb represents bill fixed effects and ei is an error term. The ratio of senators to
representatives used in each column is displayed as a ratio in the bottom row. Observations are weighted by state population and standard errors are clustered by state. T-
statistics are presented in parentheses. *** p < 0.01, ** p < 0.05, * p < 0.1
Table A3
Alternate Estimates of the Relationship Between Total State and Local Funds per Capita and Congressional Control Across COVID Bills With and Without Weights.
Total Funds per Capita

(1) (2) (3) (4) (5) (6)
Senators and Reps per 1,000,000 160.6*** 165.0*** 236.1*** 238.1***
(30.20) (28.55) (16.80) (17.66)
Dem Congressional Share 148.9*** 155.7*** 64.18 91.75**
(48.61) (50.19) (103.1) (39.63)
Observations 200 200 200 200 200 200
Population Weights Y Y Y
estimate equations of the following form: Bill Fundsib ¼ a þ cðRepresentativ es Per MillionÞi þ bðDem:Deleg:ShareÞib þ kb þ eib
Where Bill Fundsib is the total funding to state and local government in state i and bill b per capita. Representativ es Per Millioni is the total number of US representatives and US
senators divided by the population estimate for 2020 for state i in millions. Dem:Deleg:Sharei is the averaged share of state US representatives and US senators that are
members of the Democratic Party in state i. kb represents bill fixed effects and ei is an error term. Observations are weighted by state population in Columns 1, 2, and 3 and
Columns 4, 5, and 6 are unweighted. Standard errors are clustered by state. *** p < 0.01, ** p < 0.05, * p < 0
11
Table A4
Estimates of Relationship between Total State and Local Funds per Capita and Congressional Control by COVID Bill, Unweighted.

(1) (2) (3) (4) (5) (6) (7) (8)
Senators and Reps per 1,000,000 492.2*** 477.7*** 67.51*** 57.21*** 31.53*** 22.18 362.8*** 387.5***
(22.55) (38.09) (19.00) (19.05) (10.95) (13.32) (38.18) (53.49)
Dem Congressional Share 28.54 –32.66 73.30** 52.92 10.07 58.03** 254.3*** 106.3
(51.08) (56.98) (36.38) (44.22) (24.89) (22.65) (82.42) (77.10)
Tax Shortfall per Capita 0.0645 0.0901* 0.0327 0.0791
(0.0739) (0.0458) (0.0222) (0.0906)
Average Q4 2020 Unemployment 2,556 3,307 2,254* 19,847***
per Capita (3,121) (2,227) (1,135) (4,588)
Change in Personal Income 3,203* 1,979** 467.6 624.8
Q42019 to Q42020 (1,658) (799.9) (613.2) (2,095)
Total State and Local Spending 0.0189 0.0102 0.0169*** 0.0515***
per Capita (0.0117) (0.00756) (0.00603) (0.0148)
Acres of Federal Lands per Capita 0.763 0.726** 0.0925 1.150*
(0.477) (0.339) (0.234) (0.582)
Log Population Density 22.21 22.72** 7.045 20.78
(22.05) (9.511) (8.307) (25.59)
Observations 50 50 50 50 50 50 50 50
Bill Fundsi ¼ a þ cðRepresentativ es Per MillionÞi þ bðDem:Deleg:ShareÞi þ S i d þ ei
b
b
divided by the population estimate for 2020 for state I in millions of people. Dem:Deleg:Sharei is the averaged share of state US representatives and US senators that are
members of the Democratic Party in state i. S i is a vector of state-level controls. These include the predicted tax shortfall for state and local governments from Whitaker
(2020b) divided by the state population, the average number of unemployed persons each month in the fourth quarter of 2020 per capita, the percentage change in personal
income between the fourth quarter of 2019 and the fourth quarter of 2020, the total direct expenditures from state and local governments per capita, the acres of federal lands
per capita, and the log of population density for state i. ei is an error term. Standard errors are clustered by state. Columns 1 and 2 report results for the CARES Act, Columns 3
and 4 report results for the Families First Coronavirus Response Act, Columns 5 and 6 report results for the Recovery and Relief Act, and Columns 7 and 8 report results for the
American Rescue Plan Act. *** p < 0.01, ** p < 0.05, * p < 0.1
Table A5
Estimates of the Relationship between Total State and Local Funds per Capita and Congressional Control across COVID Bills.
(1) (2) (3) (4) (5) (6) (7) (8)

Senators and Reps per 1,000,000 165.0*** 140.1*** 216.8*** 152.1*** 151.4*** 148.0*** 196.4*** 217.9***
(28.55) (31.67) (24.39) (25.92) (22.71) (28.29) (32.14) (23.79)
Dem Congressional Share 155.7*** 62.63 21.65 138.5*** 15.22 158.7*** 120.2** 98.38***
(50.19) (40.69) (30.06) (39.30) (41.98) (49.89) (45.06) (24.75)
Tax Shortfall per Capita 0.231** 0.0820
(0.0954) (0.0587)
Average Q4 2020 Unemployment 10,894*** 7,763***
per Capita (2,106) (1,157)
Change in Personal Income 3,635** 1,246*
Q42019 to Q42020 (1,715) (681.9)
Total State and Local Spending 0.0308*** 0.0280***
per Capita (0.00610) (0.00556)
Acres of Federal Lands per Capita 1.324*** 0.278
(0.291) (0.315)
Log Population Density 33.92** 29.66***
(15.89) (8.268)
Observations 200 200 200 200 200 200 200 200
Chip Payment Access Commission (2021), US Office of Elementary and Secondary Education (2021), and Vincent et al. (2020) to estimate equations of the following form:
Bill Fundsi ¼ a þ cðRepresentativ es Per Million:Þi þ bðDem:Deleg:ShareÞi þ S i d þ kb þ ei
b
Where Bill Fundsi is the total funding to state and local government in state i and bill b per capita. Representativ es Per Million:i is the total number of US representatives and US
b
senators divided by the population estimate for 2020 for state i in millions of people. Dem:Deleg:Sharei is the averaged share of state US representatives and US senators that
are members of the Democratic Party in state i. S i is a vector of state-level controls, which includes the predicted tax shortfall for state and local governments divided by the
state population, the average number of unemployed persons each month in the fourth quarter of 2020 per capita, the percentage change in personal income between the
fourth quarter of 2019 and the fourth quarter of 2020, the total direct expenditures from state and local governments per capita, the acres of federal lands per capita, and the
log of population density for state i. kb represents bill fixed effects and ei is an error term. Observations are weighted by state population and standard errors are clustered by
state. *** p < 0.01, ** p < 0.05, * p < 0.1
12
Table A6
Alternative Estimates of Relationship between Total State and Local Funds per Capita and Congressional Control by COVID Bill.

(1) (2) (3) (4) (5) (6) (7) (8)
Log Senators and Reps per 1,000,000 708.9*** 790.0*** 103.3** 134.2** 3.615 57.72* 431.3*** 757.2***
(123.6) (130.8) (41.33) (50.62) (34.45) (33.41) (153.8) (115.3)
Dem Congressional Share 89.92* 112.9 67.49* 39.30 64.46 90.29*** 389.4*** 142.8**
(52.32) (67.84) (36.08) (33.39) (39.02) (21.39) (110.3) (67.16)
Tax Shortfall per Capita 0.0521 0.141*** 0.0400 0.163
(0.154) (0.0494) (0.0284) (0.146)
Average Q4 2020 Unemployment 5,390* 240.2 2,726** 23,027***
per Capita (3,129) (1,590) (1,122) (3,300)
Change in Personal Income 1,233 1,730*** 1,535** 2,701*
Q42019 to Q42020 (1,278) (499.9) (610.4) (1,577)
Total State and Local Spending 0.0152 0.0241*** 0.0196*** 0.0507***
(0.0120) (0.00440) (0.00436) (0.0123)
Acres of Federal Lands per Capita 2.305*** 0.297 0.0154 0.302
(0.705) (0.323) (0.230) (0.706)
Log Population Density 36.41* 15.52 16.10* 49.39**
(18.83) (12.74) (9.500) (19.58)
Observations 50 50 50 50 50 50 50 50
Bill Fundsi ¼ a þ c lnðRepresentativ es Per Million:Þi þ bðDem:Deleg:ShareÞi þ S i d þ kb þ ei
b
b
divided by the population estimate for 2020 for state i in millions of people. Dem:Deleg:Sharei is the averaged share of state US representatives and US senators that are
members of the Democratic Party in state i. S i is a vector of state-level controls. These include the predicted tax shortfall for state and local governments from Whitaker
(2020b) divided by the state population, the average number of unemployed persons each month in the fourth quarter of 2020 per capita, the percentage change in personal
income between the fourth quarter of 2019 and the fourth quarter of 2020, the total direct expenditures from state and local governments per capita, the acres of federal lands
per capita, and the log of population density for state i. kb represents bill fixed effects and ei is an error term.Observations are weighted by state population and standard
errors are clustered by state. Columns 1 and 2 report results for the CARES Act, Columns 3 and 4 report results for the Families First Act, Columns 5 and 6 report results for the
Recovery and Relief Act, and Columns 7 and 8 report results for the American Rescue Plan Act. *** p < 0.01, ** p < 0.05, * p < 0.1
Table A7
Alternative Estimates of the Relationship between Total State and Local Funds per Capita and Congressional Control across COVID Bills.
(1) (2) (3) (4) (5) (6) (7) (8)

Log Senators and Reps per 1,000,000 307.3*** 259.8*** 443.6*** 277.7*** 291.1*** 264.7*** 368.0*** 442.4***
(76.44) (79.86) (67.93) (68.98) (66.62) (73.54) (88.51) (59.29)
Dem Congressional Share 152.7*** 52.19 11.80 135.3*** 25.30 157.2*** 121.9*** 112.0***
(51.46) (42.83) (35.30) (41.34) (43.27) (50.68) (45.24) (29.58)
Tax Shortfall per Capita 0.251*** 0.0718
(0.0917) (0.0779)
Average Q4 2020 Unemployment 11,407*** 8,127***
per Capita (2,405) (1,337)
Change in Personal Income 3,715** 1,125
Q42019 to Q42020 (1,717) (721.5)
Total State and Local Spending 0.0321*** 0.0283***
per Capita (0.00565) (0.00633)
Acres of Federal Lands per Capita 1.769*** 0.673*
(0.287) (0.375)
Log Population Density 29.04* 30.54***
(17.21) (9.343)
Observations 200 200 200 200 200 200 200 200
Chip Payment Access Commission (2021), US Office of Elementary and Secondary Education (2021), and Vincent et al. (2020) to estimate equations of the following form:
Bill Fundsi ¼ a þ c lnðRepresentativ es Per Million:Þi þ bðDem:Deleg:ShareÞi þ S i d þ kb þ ei
b
Where Bill Fundsi is the total funding to state and local government in state i and bill b per capita. Representativ es Per Million:i is the total number of US representatives and US
b
senators divided by the population estimate for 2020 for state i in millions of people. Dem:Deleg:Sharei is the averaged share of state US representatives and US senators that
are members of the Democratic Party in state i. S i is a vector of state-level controls, which includes the predicted tax shortfall for state and local governments divided by the
state population, the average number of unemployed persons each month in the fourth quarter of 2020 per capita, the percentage change in personal income between the
fourth quarter of 2019 and the fourth quarter of 2020, the total direct expenditures from state and local governments per capita, the acres of federal lands per capita, and the
log of population density for state i. kb represents bill fixed effects and ei is an error term. Observations are weighted by state population and standard errors are clustered by
state. *** p < 0.01, ** p < 0.05, * p < 0.1
13
Table A8
Panel Estimates of the Relationship between COVID Funds and Political Control by Level of Government, Unweighted.

Total State Counties and Educational Total State Counties and Educational
Municipalities Agencies Municipalities Agencies
(1) (2) (3) (4) (5) (6) (7) (8)
Unified Dem 193.1* 128.4 134.6*** 40.14 0.0590 0.413** 0.243 0.0158
Congressional (112.9) (82.28) (44.68) (29.49) (0.118) (0.168) (0.182) (0.0102)
Share
State Fixed Effects Y Y Y Y Y Y Y Y
Observations 200 200 150 150 200 200 150 150
estimate equations of the following form: Outcomecib ¼ a þ bðDem:Deleg:Share UnifiedÞib þ cðDem:Deleg:ShareÞib þ kb þ ki þ eib .
of funding in category c to state i’s share of the US population in bill b. Columns 5, 6, 7, and 8 show this proportional share of funds for total funds, funds to state governments,
funds to counties and municipalities, and funds to educational agencies, respectively. Dem:Deleg:Shareib is the averaged share of state US representatives and US senators that
are members of the Democratic Party in state i when bill b was passed. Unifiedb is a dummy that takes a value of 1 when the Democratic Party assumes unified control of the
US House, Senate, and Presidency in 2021. We interact this dummy variable with Dem:Deleg:Shareib . kb and ki represent state and bill fixed effects, respectively. eib is an error
term. Standard errors are clustered by state. *** p < 0.01, ** p < 0.05, * p < 0.1.
Table A9
Panel Estimates of the Relationship between COVID Funds and Political Control by Type of Funds, Unweighted.

Relief Transit Education Relief Transit Education
(1) (2) (3) (4) (5) (6)
Unified Dem Congressional Share 248.1*** 77.86*** –22.76 0.155** 0.750*** 0.00239
(50.55) (20.03) (32.75) (0.0767) (0.195) (0.0139)
State Fixed Effects Y Y Y Y Y Y
Observations 150 150 150 150 150 150
estimate equations of the following form: Outcomecib ¼ a þ bðDem:Deleg:Share UnifiedÞib þ cðDem:Deleg:ShareÞib þ kb þ ki þ eib
c
of funding in category c to state i’s share of the US population in bill b. Columns 4, 5, and 6 show this proportional share of funds for relief, funds to transit, and funds to
education, respectively. Dem:Deleg:Shareib is the averaged share of state US representatives and US senators that are members of the Democratic Party in state i when bill b
was passed. Unifiedb is a dummy that takes a value of 1 when the Democratic Party assumes unified control of the US House, Senate, and Presidency in 2021. We interact this
dummy variable with Dem:Deleg:Shareib . kb and ki represent state and bill fixed effects, respectively. eib is an error term. Standard errors are clustered by state. *** p < 0.01, **
p < 0.05, * p < 0.1
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Journal of Public Economics 204 (2021) 104554

Contents lists available at ScienceDirect

Journal of Public Economics

Politics and the distribution of federal funds: Evidence from federal

N l r Min Max Total (Billions)

CARES FFCRA RRA ARPA

Funds per Capita Proportional Share of Funds

Funds per Capita Proportional Share of Funds

Appendix A See Tables A1-A9.

See Figs. A1-A3.

Panel A: Federal Funding and Congressional Representation Per State Resident

Panel B: Federal Funding and State Population

Variable Description Source

Total Funds per Capita

Total Funds per Capita

CARES FFCRA RRA ARPA

(1) (2) (3) (4) (5) (6) (7) (8)

CARES FFCRA RRA ARPA

(1) (2) (3) (4) (5) (6) (7) (8)

Funds per Capita Proportional Share of Funds

Funds per Capita Proportional Share of Funds

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