Health politics? Determinants of US states' reactions to COVID-19. (1st April 2022)

• Record Type: Journal Article
• Authors: Farvaque, Etienne; Iqbal, Hira; Ooghe, Nicolas
• Is Part Of: Journal of public finance and public choice. Volume 37:Number 1(2022)
• Page Start: 55
• Page End: 94
• Publication Date: 2022-04-01
• Subjects: social distancing -- balanced-budget rules -- budget stabilisation funds -- COVID-19 -- E60 -- E65 -- H12 -- H70 -- I18; Economics -- Periodicals; Finance, Public -- Periodicals; 336.005
• DOI: 10.1332/251569120X16040852770342
• Languages: English
• ISSNs: 2515-6918

Abstract

Abstract : Were policy responses of the US states to the pandemic driven by partisan politics or by budgetary reasons? We show that balanced-budget rules also had an impact, mediated by the possibility of benefiting from the funds previously stored in budget stabilisation funds. State policymakers tried to square the circle by simultaneously respecting budget rules, limiting the economic impact of the social distancing measures, combating the pandemic and pandering to their political bases. Some fiscal rules have induced a trade-off between health and public finance, which may reignite the debate on the pro-cyclicality of fiscal rules.