Working Paper: NBER ID: w24158
Authors: Paul W. Rhode; James M. Snyder Jr.; Koleman Strumpf
Abstract: We study the geographic distribution of military supply contracts during World War II. This is a unique case, since over $3 trillion current day dollars was spent, and there were concerns that the country's future hinged on the war outcome. We find robust evidence consistent with the hypothesis that economic factors dominated the allocation of supply contracts, and that political factors---or at least winning the 1944 presidential election---were at best of secondary importance. General industrial capacity in 1939, as well as specialized industrial capacity for aircraft production, are strong predictors of contract spending across states. On the other hand, electoral college pivot probabilities are at best weak predictors of contract spending, and under the most plausible assumptions they are essentially unrelated to spending. This is true not only for total contract spending over the entire period 1940-1944, but also for shorter periods leading up to the election in November 1944, as well as for new facilities spending. That is, we find no evidence of an electoral cycle in the distribution of funds.
Keywords: World War II; Military Contracts; Political Economy; Distribution of Spending
JEL Codes: D72; H41; H56; N42
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| economic factors (P42) | allocation of military supply contracts (H56) |
| general industrial capacity in 1939 (L64) | contract spending (H57) |
| specialized industrial capacity for aircraft production (L62) | contract spending (H57) |
| electoral college pivot probabilities (D79) | contract spending (H57) |
| political targeting (D72) | allocation of military supply contracts (H56) |
| congressional representation on key military or appropriations committees (H56) | allocation of military supply contracts (H56) |