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The Economic Impact of US Governors operating in a politically adverse environment - a Synthetic-Control Analysis

Etzelmüller, Anselm LU (2025) NEKN01 20251
Department of Economics
Abstract
This thesis examines the economic impact of US governors. It focuses specifically on crossover governors – who serve in a state politically dominated by the other major party – to analyse the impact of governors operating in politically adverse environments. Employing the synthetic-control method, it conducts counterfactual analyses of eight such governors from the 2000s and 2010s across six macroeconomic variables. The findings show that governors can exert substantial influence – of both statistical and economic significance – on their states’ economic outcomes, even when operating in politically hostile environments, characterized by opposition-controlled legislatures. Specifically, the results show that Democratic governors increase... (More)
This thesis examines the economic impact of US governors. It focuses specifically on crossover governors – who serve in a state politically dominated by the other major party – to analyse the impact of governors operating in politically adverse environments. Employing the synthetic-control method, it conducts counterfactual analyses of eight such governors from the 2000s and 2010s across six macroeconomic variables. The findings show that governors can exert substantial influence – of both statistical and economic significance – on their states’ economic outcomes, even when operating in politically hostile environments, characterized by opposition-controlled legislatures. Specifically, the results show that Democratic governors increase government spending, or at least reallocate it towards education and healthcare, compared to their Republican counterparts, while governors of neither party have a significant impact on unemployment rates. (Less)
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author
Etzelmüller, Anselm LU
supervisor
organization
course
NEKN01 20251
year
type
H1 - Master's Degree (One Year)
subject
keywords
Political Economy, Synthetic-Control Method, United States Governors, Crossover Governors, Economic Impact, Party Affiliation
language
English
id
9199662
date added to LUP
2025-09-12 09:58:58
date last changed
2025-09-12 09:58:58
@misc{9199662,
  abstract     = {{This thesis examines the economic impact of US governors. It focuses specifically on crossover governors – who serve in a state politically dominated by the other major party – to analyse the impact of governors operating in politically adverse environments. Employing the synthetic-control method, it conducts counterfactual analyses of eight such governors from the 2000s and 2010s across six macroeconomic variables. The findings show that governors can exert substantial influence – of both statistical and economic significance – on their states’ economic outcomes, even when operating in politically hostile environments, characterized by opposition-controlled legislatures. Specifically, the results show that Democratic governors increase government spending, or at least reallocate it towards education and healthcare, compared to their Republican counterparts, while governors of neither party have a significant impact on unemployment rates.}},
  author       = {{Etzelmüller, Anselm}},
  language     = {{eng}},
  note         = {{Student Paper}},
  title        = {{The Economic Impact of US Governors operating in a politically adverse environment - a Synthetic-Control Analysis}},
  year         = {{2025}},
}