July 8, 2004
John F. Kennedy School of Government, Harvard University

The Maxwell School's Government Performance Project rated the management successes of the 50 states in several areas, such as capital management, human resources and information technology in 1998 and 2000. Variability among the states was significant. Viewing the Maxwell School data as something to be explained, being focused on political institutions, social characteristics and the economic environments in the states. We review hypotheses that predict management performance, and we test them empirically. States high in social capital, states with professional legislatures, and states with vibrant entrepreneurial economies are more likely to be better managed. A state’s tax burden and the governor’s powers seem unrelated to the Maxwell School scores. States with a high density of “good government” groups tend to be poor performers, presumably because citizens join such groups hoping to improve their unsatisfactory state governments.

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