The determinants of state government debt financing

This article analyzes the determinants of state debt financing-including th e composition of government spending and the desire to make intergeneration al transfers, as well as a variety of economic, political, and institutiona l factors. The authors find that a greater proportion of younger voters is correlated with increased debt at the state level, but a greater proportion of elderly voters is correlated with decreased debt probably because of th e composition of state government spending. Moreover; the authors find that political variables are largely irrelevant to the accumulation of debt at the stare level and that some types of institutional restraints are effecti ve in limiting the size of state debt.