Template-type: ReDIF-Paper 1.0
Author-Name: Elliott Ash
Author-Name: Massimo Morelli
Author-Name: Matia Vannoni
Title: More Laws, More Growth? Evidence from U.S. States
Abstract: This paper analyzes the conditions under which more legislation contributes to economic growth. In the context of U.S. states, we apply natural language processing tools to measure legislative flows for the years 1965-2012. We implement a novel shift-share design for text data, where the instrument for legislation is leave-one-out legal-topic flows interacted with pre-treatment legal-topic shares. We find that at the margin, higher legislative output causes more economic growth. Guided by a simple model of reform decision-making under uncertainty, we find that the effect is driven by contingent clauses, that the effect is concave in the preexisting stock of legislation, and that the effect size is increasing with economic policy uncertainty.
Classification-JEL:
Keywords: Legislative production, growth, regulatory complexity, economic uncertainty
Length: 102
Number: 22178
Creation-Date: 2022
File-URL: https://repec.unibocconi.it/baffic/baf/papers/cbafwp22178.pdf
File-Format: application/pdf
File-Size: 3026
Handle: RePEc:baf:cbafwp:cbafwp22178