Finally, Nebraska: A Synthetic Control Analysis of Legislative Structure

Abstract

I estimate the impact of Nebraska’s 1937 switch from a bicameral to a unicameral legislature on state-level government expenditures. Using the synthetic control method I create a counterfactual Nebraska from a weighted average of other potential control states and compare spending in this “synthetic Nebraska” to spending in the real Nebraska. Relative to the synthetic control, Nebraska experiences a sharp decrease in expenditures per capita immediately following the switch to a unicameral legislature; however, the difference appears to diminish over time. Placebo tests show that if the change in Nebraska’s legislative structure were randomly assigned among the sample of states, and legislative structure had no real impact on spending, the likelihood of obtaining a treatment-effect estimate as large as Nebraska’s would be 0.0213. While the initial drop in expenditures per capita lends support to the theory that bicameralism, by requiring more veto players, is associated with higher levels of government spending, the fact that the difference between Nebraska and synthetic Nebraska diminishes suggests that legislators are able to circumvent this constraint.