The Review of Economics and Statistics Vol. 39 No. 4 1957
Distribution of Federal Expenditures Among the States
Abstract
T HERE are many dangers in viewing federal expenditure distribution among the states as more than a by-product of the pursuit of national objectives and in establishing at this stage of research a benchmark for testing the actual distribution against some goal. First, there is no correct way of distributing or allocating total federal expenditures among the states. While federal tax allocations derive from an extensive body of economic theory, no comparable theoretical framework supports expenditure allocations. The field of state distributions of federal expenditures has not been as well ploughed by others as has that of state distributions of federal tax levies. The statistical processes are more complex on the expenditure side than on the tax side. Expenditures are more varied in type, and individual classes of expenditures are more numerous. Moreover, the statistical information needed for allocation is much less adequate for expenditure items than for tax types. The illustrative estimates presented here are patently based on sets of assumptions. Other assumptions could be applied and recomputations made accordingly. With the work carried to the present point of analysis some changes in framework and procedures appear desirable for purposes of greater clarity and wider usefulness, if federal expenditures are allocated for a year more recent than I952. Far more important than the statistical inadequacies are the limitations implicit in a detailing of federal expenditures directed to the achievement of national purposes and program objectives as a series of state-by-state figures. Ease of movement across state lines, the dependence of industries in one state on raw materials, machinery, and semifinished goods in others, the frequency of absentee ownership of property in the state -all contribute to an emphasis on national objectives and purposes. In historical perspective, sectional interests have influenced national policies on tariffs, railroad rate regulations, resources development, minimum wages, and many other national programs. While discussions of legislative proposals often stress the divergent economic interests of the different sections of the nation, special sectional as well as national interests are essentially parts of an over-all common concern with national prosperity and economic growth. The long-run economic interests of various sections of the nation patently coincide.
- DOI
- 10.2307/1927014
- Volume
- 39
- Issue
- 4
- Pages
- 435
- Sources
- openalex crossref