Recent comparative, quantitative studies of state politics conclude that party competition and other political variables have little or no impact on important state policies such as per pupil expenditure, old age assistance, unemployment compensation, and aid to dependent children. These are rather unexpected and disturbing conclusions for they disconfirm relationships predicted by some of the most important theoretical formulations concerning democratic politics. Before re-examining the bases for these conclusions, a review of theory is in order.
V. O. Key, Jr., set the context for examining the effects of political variables on state policies. He stressed the importance of two-party competition, or bi-factionalism in one-party states, as a determinant of policy. Key sees the degree of party competition as crucial because it reflects the extent to which politics is organized or unorganized. Party competition by producing some semblance of an organized politics lessens the difficulty of lower status groups in sorting out political actors and issues, thereby enabling them to promote their own interests more effectively. Since state social welfare policies are undoubtedly relevant to the interests of “have-nots,” we can utilize state expenditures in this area as a measure of the success that these groups have enjoyed. Key's formulation, then, would lead to a simple two variable model:
P = e1
S = k1P + ez
Where P is inter-party competition, S is expenditure on social welfare, and e1 and ez represent error or variables left out of the system, and k1 is a constant.