State Budgetary Outcomes: Do CEO Governors Make a Difference?

Drawing on upper echelons theory, imprinting theory, and scholarship on managerial decision-making and the transferability of private-sector management approaches to the public sector, this study examines the relationship between U.S. governors’ top business experience and state budgetary outcomes. Using a panel dataset of 48 states from 1960 to 2010 and a regression discontinuity design, the analysis finds that electing governors with high-level business experience improves budgetary equilibrium during their terms. The findings suggest that governors with business backgrounds may be better able to align revenues with expenditures and reduce deviations from balanced budgeting. This study offers important theoretical and practical insights into political leadership, executive experience, and fiscal governance.