O'Neill School of Public and Environmental Affairs
1315 E 10th St
Bloomington IN 47401
Institutional Affiliation: Indiana University
NBER Working Papers and Publications
|July 2019||Do Local Governments Represent Voter Preferences? Evidence from Hospital Financing under the Affordable Care Act|
with Justin M. Ross, Kosali I. Simon: w26094
A mainstream motivation for decentralized government is to enable public service investments to better align with political preferences that may differ by geographical region. This paper examines how political preferences determine local government provision of hospital services. We find that local governments in areas more supportive of public insurance expansion responded to such state action by increasing expenditures on hospitals, whereas those in areas that voted against such expansions used the savings to reduce property taxes. This finding suggests that local government financial responses indeed align with political preferences.