Governors and the economy

One debate that pops up pretty often is how much credit/blame do governors deserve for the economy in their state. Edward Glaeser, a professor of economics at Harvard University, attempts to address the question in an article (“Is the ‘governor effect’ real?“). Glaeser tries to sort out the impact that a particular governor has on their economy.

In some ways the answer is obvious. Governors have less impact on the economy than people often imagine. After all, a state’s economy is shaped by short-term forces like the national and global economy as well as long-term factors that drive changes in economic sectors. Texas’ oil and gas is a great example. The price of oil can be driven up by changes in global demand or wars, instability, or other situations that impact supply. More Texans work when the price of oil goes up. When the price goes down…

Americans’ insistence on judging governors and presidents by the state of the economy may look irrational. After all, there is little that any single elected official can (or should be able to) do about the economy. That is the nature of federalism, separation of powers, and checks and balances. However, someone is going to get the blame when the economy goes south and there may be some wisdom in giving our chief executives as much incentive as possible to keep us prosperous.

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