Pork Barrel as a Signaling Tool: The Case of US Environmental Policy

Abstract

Are environmental policies affected by the political cycle? This paper investigates if environmental spending is used as pork barrel with signaling purposes. It develops a two-period model of electoral competition where politicians use current policies to signal their preferences to rational, forward-looking voters. There exists an equilibrium where incumbents use pork barrel spending for signaling in majoritarian systems. Results show that it is directed towards ideologically homogeneous groups, and is mitigated if the incumbent is a 'lame duck' or has a high discount rate. The predictions of the model are tested using data on US state level environmental expenditures. The empirical results show support for the signaling motive as a central mechanism in generating pork barrel towards the environment.