By the people, for the people: Local government's representation of voter preferences under the Affordable Care Act

Abstract

AbstractDecentralized government is hypothesized to lead public service investments to better align with political preferences across geographical regions, yet there has been limited rigorous testing of this hypothesis. We examine how local public provision of hospital services varied according to political preferences between 2006 and 2016. We use state Medicaid expansion under the Affordable Care Act (ACA) as a source of exogenous variation. Consistent with the motivation for federalism, we find that areas less supportive of the ACA tended to convert the state expansion into lower property taxes with lower public hospital expenditures, whereas, in states that expanded Medicaid, local governments tended to increase public provision of healthcare.