State Government and Economic Performance (Revised)

Despite abundant conjecture in the scholarly community, and heated rhetoric in state capitols throughout the land, there is remarkably little evidence that state governments can have any effect at all on the economic performance of their states. Working from a broadened historical perspective, and employing political and economic analysis, Paul Brace places the states and their economies in a more understandable light in State Government and Economic Performance. Over time the states have manifested differing degrees of economic activism with notable success. For much of the twentieth century, the dominance of the federal government and the extensive reach of the national economy overwhelmed state-level economic efforts. By the end of the 1970s, however, states began to show greater diversity in their economic performance. Beginning in the Reagan administration, shifting federal priorities and declining resources from Washington forced states to be increasingly self-reliant. In this new, more challenging environment, state-level activism reemerges as an important influence on income growth. The book concerns the economic fortunes of all states, but turns to four case studies to describe in depth how states have responded to economic and political challenges since the 1960s. For example, Arizona and Texas enjoyed booms, but this prosperity was due to forces outside their boundaries. Their traditions of weak government and minimal intervention served them well when the national economy was expanding, yet they were unprepared to stimulate their own economic development in the more challenging environment of the 1980s. Michigan and New York, which initially experienced slow growth, managedto stimulate economic performance because of strong government apparatus and interest - although they too were seriously challenged as the national economy slowed in the early 1990s. These contrasting experiences allow Brace to propose a model for evaluating the economic impact o