DOES THE MEDIAN VOTER MODEL EXPLAIN THE SIZE OF GOVERNMENT - EVIDENCEFROM THE STATES

Despite an attempt by its own authors, it is difficult to argue that t he influential model of the size of government developed by Meltzer an d Richard (1981) has had convincing empirical backing. In this paper, we adapt that model to a model of state government size. The main test able hypothesis is that as income inequality grows, government size (a s measured by the percentage of income devoted to government redistrib ution) grows. We test the model using panel data from the US states fr om 1979-1991. In contrast to the results found by Meltzer and Richard (1983), we find little evidence to support the model. The results are robust to several model specifications and estimation techniques.