Revenue Structure, Political Parties, and Interest Group Influence on Economic Growth across U.S. States

This study investigates the impacts of revenue structure, political parties, and interest groups on state economic growth between 1991 and 2016 by conducting panel data analysis. Notable findings are identified in this study. First, both the unified Democratic and Republican government tend to reflect manufacturing interests rather than small business interests in terms of economic development policies. Second, increasing user charge reliance leads to facilitation of economic growth in terms of income. The main theoretical contribution of this study is that it integrates the variables related to state economic growth including revenue structure, political parties, and interest groups, which enhances understanding of the mechanisms that influence state economic growth. In addition, this study confirms that interest groups and political parties are the main policy actors in the U.S. related to economic growth. In a practical sense, findings from this study imply that states can utilize user charge for economic growth. State economic growth is driven by user charge reliance, and interaction between state governmental structure and interest groups. It is recommended that future research should expand the variables and theoretical perspective related to state economic growth.