TY - JOUR AU - Wallis,John Joseph AU - Fishback,Price AU - Kantor,Shawn TI - Politics, Relief, and Reform: The Transformation of America's Social Welfare System during the New Deal JF - National Bureau of Economic Research Working Paper Series VL - No. 11080 PY - 2005 Y2 - January 2005 UR - http://www.nber.org/papers/w11080 L1 - http://www.nber.org/papers/w11080.pdf N1 - Author contact info: John J. Wallis Department of Economics University of Maryland College Park, MD 20742 Tel: 301/405-3552 Fax: 301/405-3542 E-Mail: wallis@econ.umd.edu Price V. Fishback Department of Economics University of Arizona Tucson, AZ 85721 Tel: 520/621-4421 Fax: 520/621-8450 E-Mail: pfishback@eller.arizona.edu Shawn E. Kantor School of Social Sciences, Humanities and Arts University of California, Merced 5200 N. Lake Road Merced, CA 95343 Tel: 209-228-2956 Fax: 209-228-4007 E-Mail: skantor@ucmerced.edu AB - The American social welfare system was transformed during the 1930s. Prior to the New Deal public relief was administered almost exclusively by local governments. The administration of local public relief was widely thought to be corrupt. Beginning in 1933, federal, state, and local governments cooperatively built a larger social welfare system. While the majority of the funds for relief spending came from the federal government, the majority of administrative decisions were made at state and local levels. While New Dealers were often accused of playing politics with relief, social welfare system created by the New Deal (still largely in place today) is more often maligned for being bureaucratic than for being corrupt. We do not believe that New Dealers were motivated by altruistic motives when they shaped New Deal relief policies. Evidence suggests that politics was always the key issue. But we show how the interaction of political interests at the federal, state, and local levels of government created political incentives for the national relief administration to curb corruption by actors at the state and local level. This led to different patterns of relief spending when programs were controlled by national, rather than state and local officials. In the permanent social welfare system created by the Social Security Act, the national government pressed for the substitution of rules rather than discretion in the administration of relief. This, ultimately, significantly reduced the level of corruption in the administration of welfare programs. ER -