Political Competition, Policy and Growth: Theory and Evidence from the United States

This paper develops a simple model to analyze how a lack of politi-cal competition may lead to policies that hinder economic growth. Wetest the predictions of the model on panel data for the US states. Inthese data, we …nd robust evidence that lack of political competitionin a state is associated with anti-growth policies: higher taxes, lowercapital spending and a reduced likelihood of using right-to-work laws.We also document a strong link between low political competition andlow income growth.[...]