Panel Paper: What Determines Where Public Goods Funding Goes? Regional Governance and The Role of Institutional Rules and Power

Saturday, November 4, 2017
San Francisco (Hyatt Regency Chicago)

*Names in bold indicate Presenter

Brian Yeokwang An, University of Southern California and Raphael Bostic, Federal Reserve Bank of Atlanta

We study regional planning organizations that allocate federal, state, and local funds to transportation projects in municipalities across a metropolitan area in the United States. We examine the extent to which the allocation of voting power in governing policy boards across cities influence the spatial allocation of transportation investments and whether concentrations of power, if they exist, results in resource diversion towards those jurisdictions holding the power concentrations. Our results show that the power structure of the governing policy board consistently explains the distribution of public resources for transportation more than other external factors, including demographics, the employment environment, and traffic and road pavement conditions. The results are far stronger than what was predicted by the policymakers and practitioners we interviewed, suggesting that institutional governance rules may be more powerful than previously recognized.