Public Choice Paper posits ideology’s effect on US state government size intensifies with state income. Ideology-income interaction drives government size; left-leaning ideologies expand government as income increases. Income elasticities vary by state and time, supporting the theory.
Review of Economics and Statistics A simple extension of the Meltzer-Richard model implies that redistribution an public spending depends on income, the identity of the median voter, and their interaction. Using manifesto data, we show the interaction of ideology and mean income has a major role in explaining the increase and divergence in government size observed across OECD countries.