Political economy of infrastructure investment: Evidence from the economic stimulus airport grants

We study impact of the political factors behind allocation of airport infrastructure grants under the American Recovery and Reconstruction Act (ARRA) of 2009. We find that - controlling for other factors - airports located in the districts with the larger Obama-McCain vote differential in November 2008 election received larger ARRA grants. At the same time, the district level election results are poor predictors of whether an airport will receive the grant. Senators' party affiliation and representatives' membership in the House Committee on Transportation and Infrastructure also appear as factors explaining allocation of the ARRA grants to the airports, especially in the State level analysis.