2025 Theses Doctoral

Essays on Public Goods Provision and Federalism

Futter, Lauren

The United States’ federal system contributes to variation in access to public goods and services. What explains the extent to which this variation exists and how politicians have managed government programs in light of it? This dissertation explores public goods provision in a federal society and the circumstances under which federal and state governments can successfully provide public goods and services.

Chapter 1 considers the conditions under which the federal government delegates authority over welfare programs to the states and states delegate authority to local government. Diverse societies are often associated with smaller welfare systems. Scholars argue that federalism can exacerbate the effect of diversity on these systems and inequality within a society by allowing state and local officials to more easily restrict access to welfare programs. In this chapter, I examine the role federalism plays in the design and implementation of redistributive programs through a model of flexible delegation in which localities receive some control over welfare programs. A legislative body and executive bargain over levels of taxation and whether to allow this flexible delegation in the form of waivers– exemptions from federal welfare requirements. When localities have access to flexible delegation, taxation weakly increases. Inequality, relative to a world without it, can decrease in expectation. I test the model’s implications using data from the passage of the Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA) and find partial support for the results of the model.

Chapter 2 presents a model of legislative saving. When do legislatures save for disasters and economic downturns? How do electoral uncertainty and majority party agenda control influence these decisions? I develop a two-stage bargaining model of rainy day fund (RDF) investment. In the first stage, a legislator from the majority party proposes an allocation of the budget between an RDF, particularistic goods, and public good. Before the second stage, there is an election and an economic crisis may occur. If a crisis occurs, the legislature can access an existing RDF to fund relief. The model predicts that a majority party is more likely to save when it is likely to remain in the majority, though saving remains below socially optimal levels. Supermajority and other requirements for larger voting coalitions incentivize RDF investment.

Chapter 3 develops a screening model of welfare program design. Public assistance providers often rely on private actors to implement welfare programs. However, these private actors often view eligibility for welfare programs as a negative indicator i.e. landlords do not want to rent to voucher recipients because they believe receipt of a voucher is an indication of unreliability. How might an agency optimally design welfare benefits to avoid this behavior? This paper develops a formal model of housing in which both "safe" and "risky" renters attempt to rent housing.

The housing authority chooses what portion of risky and safe renters will receive vouchers, which lower the risk associated with renting to a riskier renter. The landlord chooses whether to rent in a district controlled by the housing authority or remain in a district without vouchers before designing housing contracts geared toward risky or safe renters. Although the housing authority may be inclined to provide vouchers to riskier renters, doing so may inadvertently signal to landlords that applicants belong to that group and increase the likelihood that they receive lower-quality housing or that the landlord refuses to rent to them. For this reason, a housing authority may provide fewer vouchers to renters. Still, vouchers’ ability to lower rental-related risk may increase the quality of housing offered to riskier renters relative to a world in which vouchers do not exist.