@techreport{NBERw11397, title = "Equilibrium Impotence: Why the
States and Not the American National Government Financed
Economic Development in the Antebellum Era", author = "John
Joseph Wallis and Barry R. Weingast", institution = "National
Bureau of Economic Research", type = "Working Paper", series =
"Working Paper Series", number = "11397", year = "2005", month =
"June", doi = {10.3386/w11397}, URL =
"http://www.nber.org/papers/w11397", abstract = {Why did states
dominate investments in economic development in early America?
Between 1787 and 1860, the national government%u2019s $54
million on promoting transportation infrastructure while the
states spent $450 million. Using models of legislative choice,
we show that Congress could not finance projects that provided
benefits to a minority of districts while spreading the taxes
over all. Although states faced the same political problems,
they used benefit taxation schemes -- for example, by assessing
property taxes on the basis of the expected increase in