South By North Strategies, Ltd.

Over at the blog of The Atlantic Monthly, Richard Florida looks at some new research about the relationship between state fiscal policies and economic growth.

There are two major take-aways. First, a “state’s fiscal policies have a measurable relationship with per capita income growth, although not always in the expected direction.” Tax impacts, they report, are “quite variable”; “expenditure impacts are more consistent.”
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Second, they find “moderately strong evidence” that a “state’s political orientation, as indicated by whether the governor is Republican or Democrat, whether the state has enacted tax and expenditure limitation legislation, and whether the state frequently elects a governor of the same party as the incumbent, have consistent, measurable, and significant effects on economic growth.”  And then they drop their bombshell: “Having a Republican governor,” they conclude, “is associated with lower rates of growth.” They qualify their conclusions slightly–but only slightly–noting that past measurement errors may have introduced some distortions into the record.