Is Stimulus Funding Political?

Has the distribution of simulus funds been influenced by political factors?  A study by Veronique de Rugy suggested a partisan tilt in the disbursement of stimulus funds; she found a strong correlation, but no definitive evidence of causation.  This prompted a response from Nate Silver at FiveThirtyEight.  de Rugy replied here, prompting a surreply from Silver. And here’s a comment from Nick Gillespie.

Here is de Rugy’s bottom line:

my take on the data has always been the following: The regression analysis shows that district’s party representation matters. However, I cannot say how much it matters compared to other factors (such as the formula used by different agencies). I said it loud and clear each time I presented my findings. . .

If it is not possible to nail down the precise amount that party affiliation matters, does anyone truly want to argue that there are no political factors influencing this stimulus or stimuli in the past (whether put into place by Republicans or Democrats)? There is a lot of literature in economic-history journals on similar patterns in New Deal spending, and it consistently shows that New Deal spending correlated rather strongly and negatively with the margin of votes in the previous election. Areas where Roosevelt won by a little got more New Deal bucks than ones where he won by a lot. (I was directed to one article in particular by a reader this morning, and it is worth looking into: Price V. Fishback, Shawn Kantor, and John Joseph Wallis’s “Can the New Deal’s Three Rs Be Rehabilitated?: A program-by-program, county-by-county analysis.” Explorations in Economic History 40 (2003), pp. 278-307.)

I am confident that a similar pattern can be found with President Bush’s stimuli, which, by the way, I was publicly and consistently against. . . .

my predisposition toward limited government and sound fiscal policy hardly means that I rig my data or designs. Rather, it simply means that I am particularly skeptical when anyone claims that politicians (of all parties) do not programmatically seek to advantage their allies while punishing their adversaries. That was a useful guiding assumption under George W. Bush and, under the current administration, no less so.

And Silver, who is skeptical, summarizes his view:

For me, personally, the notion that the allocation of stimulus funds could have reflected a broad-based and widespread effort to benefit districts represented by Democrats seems implausible — something which is well worth examining but something which should have received especially rigorous scrutiny. This is particularly so given that many of the funds were intermediated by state governments, not all of which are controlled by Democrats, as well as federal agencies that were constrained by formula rules.

There are two other variations that I find less impluasible:

I find it less impausible that the funds could have been directed toward those sorts of districts which tend to vote Democratic (e.g. as measured by PVI or by Obama vote share) — even after controlling for other demographic variabes — a possibility that de Rugy raises in her response but which was not the focus of her hypothesis. The difference is that that this could have resulted from a sort of unconscious bias in the design of the stimulus rather than a deliberate conspiracy.

I also find it less implausible that some *particular* projects could have been directed toward those districts that had a Democratic representative who was either especially influential or who a key swing vote in the House. (This is what we call pork.) However, de Rugy ran various tests on the types of Democratic districts that benefited from the stimulus and did not find any relationships with the characteristics of the Democratic members of Congress that tended to represent them.

One point on which they both agree is that the quality and comprehensiveness of the data on Recovery.gov is quite poor — we’re not getting our $18 million worth here.  As Silver notes:

I share de Rugy’s disappointment with the quality of the data available at recovery.gov. Frankly, I am not sure that testing her hypothesis to a peer-reviewable level of robustness is possible given the middling quality of data and the inherent ambiguity with how particular projects must be assigned to particular congressional districts.