Jamie Bologna Pavlik

Does it pay to be a locale of political importance? Political business cycle theory predicts that the executive has an incentive to manipulate policy to increase the chances of their party remaining in office. In particular, core counties (those that vote for the current administration) have been shown to enjoy disproportionately higher federal spending. In this paper, we explore how this funding affects the well-being of an area by estimating the effect of presidential particularism on governmental transfers and (productive) income per-capita using county-level data from 1993 to 2012. We find that transfer payments tend to be higher and income lower in counties that vote for the current administration. These findings are robust across a wide number of specifications including fixed effects, first differences, a first differenced model with county-specific time trends, and a matching analysis. Moreover, results hold when examining the subset of counties that only voted for a single party throughout the entire sample where the treatment (whether the county voted for the current administration) is largely exogenous to the county in question.

Dr. Mahathir bin Mohamad is often credited with Malaysia's dramatic economic success post‐1980. It is well known that the Mahathir regime installed centralized power in the Office of the Prime Minister (PM) and greatly extended state capacity through a far‐reaching clientelist system. Prima Facie , the Malaysian experience appears to validate power centralization and state capacity as complementary to economic development. Though these changes did make Malaysia more susceptible to corruption, dramatically exhibited in 2015 with the 1MDB 5 billion dollar scandal, it has been argued that the clientelist political structure installed in Malaysia generally manages corruption at tolerable levels in order to provide the state the capacity needed to implement controls for economic development that began in the 1980s. While Malaysia experienced impressive economic growth during the Mahathir administration, our test using the Synthetic Control Method finds that GDP per capita fell well below what would have been expected under the governing structures in place in the 1970s, before Mahathir took office—a loss of approximately $4000 per capita below its potential. This study provides evidence of powerful negative economic consequences attributable to greater power centralization and enhanced state capacity inaugurated under Mahathir.