THE POLITICAL-ECONOMY OF BUSINESS FAILURES ACROSS THE AMERICAN STATES, 1970-1985 - THE IMPACT OF REAGAN NEW FEDERALISM

Since the early 1970s, government responsibility for creating hospitab le ''business climates'' has gradually shifted from the national level to the state level under the New Federalism. Ironically, it was preci sely when the New Federalism was culminated during the Reagan Administ ration that many states experienced record rates of business failure. I extend Gordon, Edwards, and Reich's (1982) historical model of socia l structures of accumulation to analyze state differences in business failure rates between 1970 and 1985. I hypothesize that the threats to business survival posed by working-class power and welfare provisions were neutralized under the New Federalism, bur that, nonetheless, cor porate survival became more precarious because the New Federalism crea ted local fiscal crises and promoted ineffective state economic develo pment policies. Results from a pooled, time series analysis basically corroborate these hypotheses.