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The Political Economy of the New Deal
The Locke Institute Series
The Political Economy of the New Deal explores the political and economic forces that shaped the highly uneven distribution of federal emergency relief spending during the Great Depression. It presents new empirical evidence on the Roosevelt administration's response to the Great Depression, and shows how this was influenced more by presidential politics than by the plight of the unemployed millions. The authors apply public choice theory to data produced by the Roosevelt administration to produce an empirical model of New Deal spending decisions. It reassesses the role played by politics in shaping the policies adopted by the New Dealers through a detailed analysis of the distribution of federal emergency relief funds. The authors present new econometric evidence supporting the idea that President Roosevelt used the New Deal to buy electoral votes. They suggest that states with healthier economies attracted disproportionately larger shares of the federal government's relief funds simply because they could afford the programs' costs; and that states whose citizens were in greatest economic need were required to bear more of the cost of financing projects.
The results from this analysis suggest that while economic need was certainly not ignored, political considerations dominated the distribution of New Deal dollars. This book examines the origins of the modern American welfare state from a public choice perspective and will be of great interest to economists and political scientists, as well as those interested in the economic history of the United States.
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What Reviewers Are Saying
'All in all, The Political Economy of the New Deal is a well-written book that makes us think further about the motives of the New Dealers and politicians in general. It is essential reading for anyone interested in the New Deal and the politics of the 1930s.' -- Gene Smiley, The Independent Review 'This book effectively debunks the popular mythology about the New Deal, and represents a watershed in the application of public choice analysis to an important episode in recent economic history.' -- Gary M. Anderson, Public Choice '... engaging and provocative ... Couch and Shughart's book provides a useful outline of some of the arguments that a public choice based view of the New Deal must attempt to make. They present an interesting overview of several agencies and programs, accompanied by quotes and examples that often succeed in giving the reader a feeling of being in the midst of the action.' -- Barbara J. Alexander, Journal of Economic History 'Well written, this volume is a useful blend of public choice theory and economic history.' -- H.H. Ulbrich, Choice